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Realty Income (O) Hikes Monthly Dividend for The 98th Time
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Realty Income Corporation (O - Free Report) recently announced its 98th dividend hike since the company’s NYSE listing in 1994. The company will now pay 22.05 cents per share compared with the 22 cents paid earlier.
Realty Income will pay the dividend on Oct 15 to shareholders on record as of Oct 1, 2018. The latest dividend rate marks an annualized amount of $2.646 per share versus the prior rate of $2.64 per share. Based on the company’s share price of $57.50 on Sep 18, this results in a dividend yield of around 4.6%.
Admittedly, solid dividend payouts are arguably the biggest enticement for REIT investors and Realty Income remains committed to boosting shareholders’ wealth. The company enjoys a trademark on the phrase “The Monthly Dividend Company”.
In fact, although the latest hike came by a marginal figure, this marks the company’s 84 consecutive quarterly hikes, 579 consecutive monthly dividend payments, as well as payment of more than $5.7 billion throughout its 49-year operating history. In fact, this retail REIT has witnessed compound average annual dividend growth of around 4.6% since its listing on the NYSE. Given its financial position and lower debt-to-equity ratio compared to the industry, the latest dividend rate is likely to be sustainable.
At a time when dwindling mall traffic, amid shift of consumers toward online channels, store closures and bankruptcy of retailers have wreaked havoc for the retail REIT sector, including Urban Edge Properties (UE - Free Report) , Taubman Centers, Inc. and Macerich Company (MAC - Free Report) , Realty Income has been able to differentiate itself by deriving more than 90% of its annualized retail rental revenues from tenants belonging to service, non-discretionary and low-price retail business. Such businesses are less susceptible to economic recessions and competition from Internet retailing.
The company’s solid underlying real estate quality and prudent underwriting at acquisitions has helped maintain high occupancy levels consistently. Additionally, its same-store rent growth underlines limited operational volatility. Moreover, Realty Income adheres to a conservative capital structure. It has modest leverage, robust liquidity, and continued access to attractively priced equity and debt capital. In addition, it has a well-laddered debt maturity schedule.
Nonetheless, the company’s exposure to single-tenant assets raises risks associated with tenant default. Further, generation of notable rental revenues from assets leased to drug stores and rate hike add to its woes. Also, the company’s dividend yield based on the latest hike is below the industry’s yield of 5.20%. This might affect its ability to draw investors’ attention to the stock, to some extent.
It's hard to believe, even for us at Zacks. But while the market gained +21.9% in 2017, our top stock-picking screens have returned +115.0%, +109.3%, +104.9%, +98.6%, and +67.1%.
And this outperformance has not just been a recent phenomenon. Over the years it has been remarkably consistent. From 2000 - 2017, the composite yearly average gain for these strategies has beaten the market more than 19X over. Maybe even more remarkable is the fact that we're willing to share their latest stocks with you without cost or obligation.
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Realty Income (O) Hikes Monthly Dividend for The 98th Time
Realty Income Corporation (O - Free Report) recently announced its 98th dividend hike since the company’s NYSE listing in 1994. The company will now pay 22.05 cents per share compared with the 22 cents paid earlier.
Realty Income will pay the dividend on Oct 15 to shareholders on record as of Oct 1, 2018. The latest dividend rate marks an annualized amount of $2.646 per share versus the prior rate of $2.64 per share. Based on the company’s share price of $57.50 on Sep 18, this results in a dividend yield of around 4.6%.
Admittedly, solid dividend payouts are arguably the biggest enticement for REIT investors and Realty Income remains committed to boosting shareholders’ wealth. The company enjoys a trademark on the phrase “The Monthly Dividend Company”.
In fact, although the latest hike came by a marginal figure, this marks the company’s 84 consecutive quarterly hikes, 579 consecutive monthly dividend payments, as well as payment of more than $5.7 billion throughout its 49-year operating history. In fact, this retail REIT has witnessed compound average annual dividend growth of around 4.6% since its listing on the NYSE. Given its financial position and lower debt-to-equity ratio compared to the industry, the latest dividend rate is likely to be sustainable.
At a time when dwindling mall traffic, amid shift of consumers toward online channels, store closures and bankruptcy of retailers have wreaked havoc for the retail REIT sector, including Urban Edge Properties (UE - Free Report) , Taubman Centers, Inc. and Macerich Company (MAC - Free Report) , Realty Income has been able to differentiate itself by deriving more than 90% of its annualized retail rental revenues from tenants belonging to service, non-discretionary and low-price retail business. Such businesses are less susceptible to economic recessions and competition from Internet retailing.
The company’s solid underlying real estate quality and prudent underwriting at acquisitions has helped maintain high occupancy levels consistently. Additionally, its same-store rent growth underlines limited operational volatility. Moreover, Realty Income adheres to a conservative capital structure. It has modest leverage, robust liquidity, and continued access to attractively priced equity and debt capital. In addition, it has a well-laddered debt maturity schedule.
Nonetheless, the company’s exposure to single-tenant assets raises risks associated with tenant default. Further, generation of notable rental revenues from assets leased to drug stores and rate hike add to its woes. Also, the company’s dividend yield based on the latest hike is below the industry’s yield of 5.20%. This might affect its ability to draw investors’ attention to the stock, to some extent.
Shares of Realty Income have outperformed the industry it belongs to, in the past three months. This Zacks Rank #3 (Hold) stock has gained 8.8%, while the industry has declined 3.9% during the same time frame. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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It's hard to believe, even for us at Zacks. But while the market gained +21.9% in 2017, our top stock-picking screens have returned +115.0%, +109.3%, +104.9%, +98.6%, and +67.1%.
And this outperformance has not just been a recent phenomenon. Over the years it has been remarkably consistent. From 2000 - 2017, the composite yearly average gain for these strategies has beaten the market more than 19X over. Maybe even more remarkable is the fact that we're willing to share their latest stocks with you without cost or obligation.
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