Realty Income (O Quick QuoteO - Free Report) , often branded as “The Monthly Dividend Company,” has built a strong reputation for dependable income. A member of the S&P 500 Dividend Aristocrats, it has increased its dividend for more than three decades and delivered 113 consecutive quarterly raises. Its current dividend yield of about 5.7% stands well above peers such as Agree Realty Corporation (ADC Quick QuoteADC - Free Report) at 4.34% and Essential Properties Realty Trust, Inc. (EPRT Quick QuoteEPRT - Free Report) at 4.04%, reinforcing its appeal to income-focused investors. Check Realty Income’s dividend history here.

That said, recent share price performance has been less encouraging. Over the past three months, Realty Income stock has fallen more than 6%, lagging Agree Realty, Essential Properties Realty Trust, the Zacks REIT and Equity Trust - Retail industry and the broader S&P 500 composite.

While the company’s dividend track record is impressive, yield alone should not dictate an investment decision. The key issue is sustainability. Investors should assess Realty Income’s growth prospects, tenant mix, balance sheet strength and exposure to sector challenges to judge whether its elevated yield is well supported over the long term.

Image Source: Zacks Investment Research

Is Realty Income's Growth and Dividend Built to Last?

Realty Income’s dividend is supported by a broad and resilient operating base, underpinned by strong recurring cash flows from a portfolio of more than 15,500 properties spanning all 50 U.S. states, the U.K. and several European markets. Its investment-grade balance sheet, backed by A3/A– credit ratings from Moody’s and S&P, provides additional financial flexibility. The REIT’s emphasis on non-discretionary retail and service-oriented tenants, businesses that typically perform steadily across economic cycles and face limited e-commerce disruption, adds to earnings stability. As of Sept. 30, 2025, roughly 91% of annualized retail base rent came from these defensive categories, helping cushion results during economic slowdowns.

The company also appears positioned to extend its long record of dividend growth. Over the past decade, Realty Income has evolved from a predominantly retail net-lease REIT into a more diversified platform with exposure across multiple property types and regions. Its move into industrial real estate has capitalized on e-commerce and omnichannel trends while lowering reliance on traditional retail.

Beyond this, Realty Income has selectively expanded into alternative assets, including gaming and data centers. High-profile investments such as Encore Boston Harbor and Bellagio Las Vegas, along with its partnership with Digital Realty (DLR) in data centers, highlight a strategy aimed at capturing long-term growth opportunities beyond core retail.

Geographic expansion, particularly in Europe, where competition is lighter and yields are attractive, further supports growth prospects. Through the third quarter of 2025, the company invested a total of $3.9 billion at an initial weighted average cash yield of 7.5% and expects total 2025 deployment to exceed $6 billion. Operating within a vast $14 trillion global net-lease addressable market, Realty Income continues to scale through disciplined capital allocation.

At the same time, management remains cautious, guiding for roughly 75 basis points of potential credit losses in 2025, largely linked to legacy merger tenants. While manageable, this highlights that even well-diversified REITs are not immune to isolated credit pressures.

O’s Estimate Revisions and Valuation

Estimate revisions reflect a somewhat mixed trend. Over the past 60 days, the Zacks Consensus Estimate for 2025 adjusted funds from operations (AFFO) per share has been trimmed modestly, while the 2026 projection has inched up slightly before declining again, reflecting a balanced view of growth and cost pressures.

Image Source: Zacks Investment Research

Valuation-wise, Realty Income stock is trading at a forward 12-month price-to-FFO of 12.83X, below the retail REIT industry average of 14.62X and its three-year median. O stock is also currently trading at a reasonable discount compared to its industry peers, Agree Realty Corporation and Essential Properties Realty Trust. This valuation disparity might not be as favorable as it seems. Agree Realty is trading at a forward 12-month price-to-FFO of 15.97X, while Essential Properties Realty Trust is trading at 14.60X.

However, its Value Score of D suggests that it may not be a bargain at current levels. Still, the company’s consistent dividend growth, underpinned by predictable rental income, keeps it appealing for long-term income-oriented investors.

Image Source: Zacks Investment Research

Final Take on Realty Income

Realty Income continues to appeal to income-oriented investors, backed by a long dividend track record, diversified portfolio, and expansion into defensive and growth-oriented assets across regions. Its 5.7% yield, focus on essential-service tenants, and investment-grade balance sheet support long-term income reliability.

Still, the stock’s valuation and moderate growth expectations keep it from screening as a compelling buy right now. Its stability also prevents it from being a sell. For existing shareholders, steady dividend growth, resilient assets and dependable cash flows support a comfortable hold for stable income.

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.