Realty Income: Defensive Yield, Disciplined Growth, And A Reasonable Valuation
Summary
- Realty Income's core business involves managing a diversified portfolio of single-tenant commercial properties with long-term triple net leases, shielding them from inflation-driven expenses.
- The company reported a 4.8% increase in AFFO per share in FY24, with a well-covered dividend and a conservative debt profile.
- Key risks include investment spread compression, rising credit losses, potential dilution, and potential goodwill impairment following the Spirit Realty merger.
- Future growth catalysts include unsettled forward equity sales, plans for a private capital fund, and well-staggered lease maturities reducing rollover risk.
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