We use cookies to understand how you use our site and to improve your experience.
This includes personalizing content and advertising.
By pressing "Accept All" or closing out of this banner, you consent to the use of all cookies and similar technologies and the sharing of information they collect with third parties.
You can reject marketing cookies by pressing "Deny Optional," but we still use essential, performance, and functional cookies.
In addition, whether you "Accept All," Deny Optional," click the X or otherwise continue to use the site, you accept our Privacy Policy and Terms of Service, revised from time to time.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Realty Income Stock: Buy, Hold or Sell This High-Yield Dividend Play?
Read MoreHide Full Article
Key Takeaways
Realty Income has raised its dividend 132 times, sustaining a long record of monthly payouts.
The REIT invested $1.2B globally in Q2 2025, with 76% directed to higher-yield European markets.
Trading at 13.75X FFO, below the industry average, Realty Income is viewed as fairly valued after its rebound.
Realty Income Corporation (O - Free Report) , known as “The Monthly Dividend Company”, continues to be one of the most recognizable names in the real estate investment trust (REIT) world. With a 56-year operating history and 664 consecutive monthly dividends, its reputation as a dependable income play remains intact even amid changing market conditions.
The stock has delivered a solid 12.8% year-to-date gain, outpacing peers like Agree Realty (ADC - Free Report) and NNN REIT (NNN - Free Report) , and the broader Zacks REIT and Equity Trust - Retail industry. However, despite this strong rebound, it still trails the S&P 500 composite. The recovery has sparked debate over whether the current valuation offers more room for upside or whether investors should be cautious after the recent rally.
As Realty Income expands its global footprint and strengthens its balance sheet, investors are once again assessing if the company’s mix of stable dividends and selective growth makes it a buy, hold or sell in today’s interest rate environment.
Year-to-Date Price Performance
Image Source: Zacks Investment Research
Reliable Dividends & Global Strategy Keep Realty Income Steady
An S&P 500 Dividend Aristocrats index member, Realty Income continues to captivate income-focused investors with a 5.37% yield and a reputation for dependable payouts. In September, the dividend was also raised for the 132nd time, reflecting management’s confidence in recurring cash flows. It has achieved a 4.2% compound annual dividend growth rate since 1994, a testament to both strategic discipline and consistent performance. Check Realty Income’s dividend history here.
Durable cash flows stem from its net lease model, with tenants covering most property expenses. Its portfolio, now exceeding 15,600 properties across 91 industries, remains 98.6% occupied, slightly above its historical average. The company continues to benefit from its focus on non-discretionary, low-price-point or service-oriented retail tenants, helping it show resilience through economic cycles.
Growth opportunities also remain compelling, and with strong visibility to its pipeline, the company expects 2025 investment volume of $5 billion. During the second quarter of 2025, the REIT invested $1.2 billion globally at a 7.2% weighted average initial yield, maintaining discipline despite sourcing a record $43 billion in potential deal volume. Approximately 76% of these investments were in Europe, where a fragmented competitive landscape, a larger addressable market and structurally lower borrowing costs are enabling Realty Income to secure higher yields than in the United States. This international strategy, now including eight European countries, has helped diversify income streams and offset slower domestic deal activity.
Realty Income’s conservative balance sheet remains a cornerstone of its appeal. Net debt to annualized EBITDA stood at 5.5X in the second quarter, in line with its target, while liquidity totaled $5.4 billion, including cash and credit availability. This prudent financial management enables Realty Income to pursue accretive acquisitions while staying leverage-neutral as well as gradually expand dividends. The firm’s expanding access to European capital markets also provides flexibility.
That said, challenges remain. Although potential rate cuts could ease funding pressures, they are unlikely to drive a significant near-term rebound in AFFO growth amid ongoing macro uncertainty and narrow investment spreads. Moreover, while management raised its 2025 investment target to $5 billion, the guidance still factors in roughly 75 basis points of expected rent loss, above historical norms, mainly stemming from tenants added through previous mergers and acquisitions.
O’s Estimate Revisions and Valuation
The near-term earnings outlook remains relatively stable. Over the past 60 days, the Zacks Consensus Estimate for 2025 adjusted funds from operations (AFFO) per share has inched up slightly, while the 2026 projection has been trimmed modestly, reflecting a balanced view of growth and cost pressures.
O’s Consensus Estimate Trend (60 Days)
Image Source: Zacks Investment Research
Valuation-wise, Realty Income trades at a forward price-to-FFO of 13.75X, below the retail REIT industry average of 15.32X but slightly above its one-year median of 13.16X. The stock appears reasonably priced versus its peers, cheaper than Agree Realty yet somewhat richer than NNN REIT. Agree Realty is trading at a forward 12-month price-to-FFO of 16.76X, while NNN is trading at 12.00X. However, its Value Score of D suggests that it may not be a bargain at current levels, especially after its double-digit YTD gain.
Still, the company’s consistent dividend growth, underpinned by predictable rental income, keeps it appealing for long-term income-oriented investors.
Forward 12 Month Price-to-FFO (P/FFO) Ratio
Image Source: Zacks Investment Research
Realty Income: A Sensible Hold for Income Seekers
Realty Income remains a cornerstone holding for investors seeking reliable monthly income. Its diversified portfolio, disciplined capital allocation and steady balance sheet underpin a well-protected dividend that continues to grow. Yet, after a strong 2025 rebound, valuation looks fair rather than cheap, and earnings growth appears moderate.
Given the balanced risk-reward profile, Realty Income is best viewed as a hold — a dependable income stock worth keeping for stability and dividend consistency, but not compelling enough at current levels for aggressive new buying.
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.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Shutterstock
Realty Income Stock: Buy, Hold or Sell This High-Yield Dividend Play?
Key Takeaways
Realty Income Corporation (O - Free Report) , known as “The Monthly Dividend Company”, continues to be one of the most recognizable names in the real estate investment trust (REIT) world. With a 56-year operating history and 664 consecutive monthly dividends, its reputation as a dependable income play remains intact even amid changing market conditions.
The stock has delivered a solid 12.8% year-to-date gain, outpacing peers like Agree Realty (ADC - Free Report) and NNN REIT (NNN - Free Report) , and the broader Zacks REIT and Equity Trust - Retail industry. However, despite this strong rebound, it still trails the S&P 500 composite. The recovery has sparked debate over whether the current valuation offers more room for upside or whether investors should be cautious after the recent rally.
As Realty Income expands its global footprint and strengthens its balance sheet, investors are once again assessing if the company’s mix of stable dividends and selective growth makes it a buy, hold or sell in today’s interest rate environment.
Year-to-Date Price Performance
Image Source: Zacks Investment Research
Reliable Dividends & Global Strategy Keep Realty Income Steady
An S&P 500 Dividend Aristocrats index member, Realty Income continues to captivate income-focused investors with a 5.37% yield and a reputation for dependable payouts. In September, the dividend was also raised for the 132nd time, reflecting management’s confidence in recurring cash flows. It has achieved a 4.2% compound annual dividend growth rate since 1994, a testament to both strategic discipline and consistent performance. Check Realty Income’s dividend history here.
Durable cash flows stem from its net lease model, with tenants covering most property expenses. Its portfolio, now exceeding 15,600 properties across 91 industries, remains 98.6% occupied, slightly above its historical average. The company continues to benefit from its focus on non-discretionary, low-price-point or service-oriented retail tenants, helping it show resilience through economic cycles.
Growth opportunities also remain compelling, and with strong visibility to its pipeline, the company expects 2025 investment volume of $5 billion. During the second quarter of 2025, the REIT invested $1.2 billion globally at a 7.2% weighted average initial yield, maintaining discipline despite sourcing a record $43 billion in potential deal volume. Approximately 76% of these investments were in Europe, where a fragmented competitive landscape, a larger addressable market and structurally lower borrowing costs are enabling Realty Income to secure higher yields than in the United States. This international strategy, now including eight European countries, has helped diversify income streams and offset slower domestic deal activity.
Realty Income’s conservative balance sheet remains a cornerstone of its appeal. Net debt to annualized EBITDA stood at 5.5X in the second quarter, in line with its target, while liquidity totaled $5.4 billion, including cash and credit availability. This prudent financial management enables Realty Income to pursue accretive acquisitions while staying leverage-neutral as well as gradually expand dividends. The firm’s expanding access to European capital markets also provides flexibility.
That said, challenges remain. Although potential rate cuts could ease funding pressures, they are unlikely to drive a significant near-term rebound in AFFO growth amid ongoing macro uncertainty and narrow investment spreads. Moreover, while management raised its 2025 investment target to $5 billion, the guidance still factors in roughly 75 basis points of expected rent loss, above historical norms, mainly stemming from tenants added through previous mergers and acquisitions.
O’s Estimate Revisions and Valuation
The near-term earnings outlook remains relatively stable. Over the past 60 days, the Zacks Consensus Estimate for 2025 adjusted funds from operations (AFFO) per share has inched up slightly, while the 2026 projection has been trimmed modestly, reflecting a balanced view of growth and cost pressures.
O’s Consensus Estimate Trend (60 Days)
Image Source: Zacks Investment Research
Valuation-wise, Realty Income trades at a forward price-to-FFO of 13.75X, below the retail REIT industry average of 15.32X but slightly above its one-year median of 13.16X. The stock appears reasonably priced versus its peers, cheaper than Agree Realty yet somewhat richer than NNN REIT. Agree Realty is trading at a forward 12-month price-to-FFO of 16.76X, while NNN is trading at 12.00X. However, its Value Score of D suggests that it may not be a bargain at current levels, especially after its double-digit YTD gain.
Still, the company’s consistent dividend growth, underpinned by predictable rental income, keeps it appealing for long-term income-oriented investors.
Forward 12 Month Price-to-FFO (P/FFO) Ratio
Image Source: Zacks Investment Research
Realty Income: A Sensible Hold for Income Seekers
Realty Income remains a cornerstone holding for investors seeking reliable monthly income. Its diversified portfolio, disciplined capital allocation and steady balance sheet underpin a well-protected dividend that continues to grow. Yet, after a strong 2025 rebound, valuation looks fair rather than cheap, and earnings growth appears moderate.
Given the balanced risk-reward profile, Realty Income is best viewed as a hold — a dependable income stock worth keeping for stability and dividend consistency, but not compelling enough at current levels for aggressive new buying.
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.