Amid uncertainty around tariffs, fiscal concerns and market volatility, focusing on dividend stocks is gaining traction, and this brings our attention to Realty Income (O Quick QuoteO - Free Report) , which is an S&P 500 Dividend Aristocrats index member. With 30 consecutive years of dividend increases and 110 straight quarterly hikes, the REIT has built a reputation for delivering dependable income.

The stock fell more than 14% from its 52-week high achieved last October, closing at $55.53 on Friday. However, the decline has pushed its dividend yield up to 5.8%, potentially creating an attractive opportunity for income-focused investors. So far in the year, the stock has outperformed the Zacks REIT and Equity Trust - Retail industry and the S&P 500 composite.

However, instead of acting on impulse, one should take a closer look at whether this REIT can maintain its dividend through solid growth and weigh how much the present risks might truly affect its future outlook.

Year-to-Date Price Performance

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Does O Have the Strength to Support Future Dividends?

Realty Income stands out as a pillar of reliability in the REIT space, earning its reputation as “The Monthly Dividend Company” for being a payer of dividends every month. Since 1994, it has achieved a 4.3% compound annual dividend growth rate, a testament to both strategic discipline and consistent performance. Check Realty Income’s dividend history here.

That consistency is supported by a large and diversified portfolio of 15,627 income-generating properties across the United States and Europe. Realty Income focuses on non-discretionary, low price point and service-oriented tenants — sectors less sensitive to economic cycles and e-commerce disruption. Approximately 91% of rent comes from sectors resilient to economic downturns and e-commerce disruption, including non-discretionary retail and service-based businesses.

Financially, Realty Income maintains a solid foundation, holding $2.9 billion in liquidity and investment-grade credit ratings from Moody’s (A3) and S&P (A-). With a fixed-charge coverage ratio of 4.7 and a net debt to EBITDAre of 5.4X, the company retains the flexibility to fund future growth. A well-laddered debt schedule with a weighted average maturity of 6.3 years further supports financial stability.

In recent years, Realty Income has successfully expanded into new verticals like gaming, industrial and data centers, increasing its diversification and growing its addressable market. The REIT is capitalizing on strategic opportunities, including a partnership with Digital Realty (DLR Quick QuoteDLR - Free Report) and high-profile investments in assets like Encore Boston Harbor. With an estimated $14 trillion global net lease market and a projected $4 billion in 2025 investments, Realty Income is positioning itself for long-term growth.

While Realty Income has many strengths, it also faces meaningful headwinds. Ongoing tariff uncertainty could place additional pressure on retailers within its portfolio, potentially affecting rental income and operational performance. Furthermore, the REIT remains sensitive to the impact of elevated interest rates. As treasury yields rise amid fiscal concerns and the Fed’s cautious stance on rate cuts due to the uncertainty around tariffs, bonds grow increasingly appealing compared to income-generating REITs. This dynamic may dampen investor appetite for Realty Income’s stock, weigh on its share price and constrain its ability to access low-cost capital for future growth initiatives.

O's Estimate Revisions and Valuation

The estimate revisions reflect a somewhat bearish trend. The Zacks Consensus Estimate for 2025 adjusted funds from operations (AFFO) per share has declined marginally over the past two months, while the same for 2026 has also moved south by a cent over the past month. (Find the latest EPS estimates and surprises on Zacks Earnings Calendar.)

O’s Consensus Estimate Trend (60 Days)

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Realty Income stock is trading at a forward 12-month price-to-FFO of 12.82X, below the retail REIT industry average of 14.81X and also lower than its one-year median of 13.13X. Although Realty Income stock is currently trading at a discount compared to its industry peers like Agree Realty Corporation (ADC Quick QuoteADC - Free Report) , this valuation disparity might not be as favorable as it seems. Agree Realty is trading at a forward 12-month price-to-FFO of 17.32X.

Forward 12 Month Price-to-FFO (P/FFO) Ratio

Image Source: Zacks Investment Research

Wrapping Up on Realty Income

Realty Income remains a top-tier dividend play, combining reliable income with long-term growth prospects. Its stable cash flows are underpinned by a well-diversified tenant base and a long-term net lease model, which prioritizes tenants in essential, low-price-point sectors. This structure adds resilience and visibility to its revenue stream. 

The company’s strategic shift into alternative property types, such as gaming, as well as its foray into data centers through its collaboration with Digital Realty, reflects a proactive, future-oriented growth strategy. Coupled with a strong balance sheet and investment-grade credit profile, Realty Income is positioned to navigate evolving market conditions effectively. 

That said, while the stock currently trades at a relative discount to peers like Agree Realty, prospective investors may choose to remain cautious until there’s greater clarity on macroeconomic trends and potential policy shifts. For current shareholders, Realty Income's track record of consistent dividend increases and durable asset mix continues to make it a compelling hold in income-focused portfolios.

At present, Realty Income carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Note: Anything related to earnings presented in this write-up represents funds from operations (FFO) — a widely used metric to gauge the performance of REITs.