Realty Income: Why I'm Buying More Now
Summary
- Realty Income delivered an 8% CAGR in total operational returns ("TOR"), matching Dividend Aristocrats and outperforming consumer staples.
- With a 5.7% yield, Realty Income significantly surpasses the ~2% S&P 500 average, contributing 62% to returns.
- Q3 adjusted EBITDA margin of 95% dwarfs S&P 500 (26%) and Dividend Aristocrats (24%) averages.
- Realty Income maintains A-rated credit, 5.4x net debt to EBITDA, and a 33% debt-to-market capitalization ratio.
- Cap rate compression (7.4% in Q3) and rising capital costs pose challenges to future value creation.
Analyst’s Disclosure: I/we have a beneficial long position in the shares of O either through stock ownership, options, or other derivatives. 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.
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