Realty Income - The Monthly Income Company - Just Raised Its Dividend 6%

Summary

• Realty Income Is The Monthly Dividend Company. The recently raised dividend is 4.2% annually (or $0.2105 / month).
• Realty Income is a member of the S&P High-Yield Dividend Aristocrats Index and the S&P 500 Index. It is a stable stock with a Beta of 0.13.
• O is in the 98th percentile of stocks in return per unit of market risk. Its long term leases and triple net nature substantially reduced its exposure to inflation, etc.

Hopefully this article will help you grow your assets.

Realty Income Corp. (NYSE:O) is a commercial real estate REIT in the US. Realty Income was added to the S&P 500 Index on April 6, 2015. It is also a member of the S&P High-Yield Dividend Aristocrats Index. On January 17, 2017 Realty Income Corp. announced another dividend increase of 6% from $0.2025/month to $0.2105/month (4.2% annually). This was the 90th dividend raise since O's listing on the NYSE in 1994. O has had a 17.9% Compound Average Annual Return since its NYSE listing in 1994. This by itself is a strong argument for investing in O.

However, the landscape for retail, which is 78.7% of O's business leases, is changing. It is hard to get excited about a company that leases out "brick and mortar", when the latest trend is to online sales. Sales for Thanksgiving Day and Black Friday at "Brick and Mortar Stores" fell in 2016 by -5.0%. Retail Next data shows traffic in Brick and Mortar Stores has dropped for 48 straight months; and monthly sales have dropped for 36 straight months. Buying a company that leases out Brick and Mortar buildings seems questionable under the current circumstances. However, Realty Income is exposed to defensive industries (see chart below).

None of the first five categories above are going to move online anytime soon. When people get sick, they want medicine right away. When they "conveniently need some food", they don't want to wait for a 1-2 day internet delivery. Dollar stores will not deliver based on internet sales, the prices are too low; and the margins are too thin. Health and Fitness is not going to move online. It provides things you do at a site with a lot of other people. I could go on; but the point is that few of the above services can be easily

Analyst’s Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.