Big K

Cramer's Lightning Round - The Hottest Market in the World (6/9/09)

Realty Income Corp's leverage is less than half of most REITS. They
will not have trouble refinancing in 4 years, when their earliest note
is due. Realty Income also has been paying down some debt. Cramer has been right about many companies, but here I think there is much less risk than he is giving them credit for. Many REITS have an unbelievable amount of debt, with little chance of repaying it. Not the case for Realty Income who has a debt of only $1.3 billion (about $13/share). Consider, for example, similarly sized Weingarten Realty, a company that up until the last several years, had been well managed and conservative. Their debt has suddenly ballooned to $3.2 billion in the last several years (about $26/share after they issued more shares). Unlike irresponsible Weingarten and many other REITS, Realty Income has been much more prudent and conservative in their use of debt to expand, so I believe much less risk than most.