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Realty Income increases commercial paper program by $500m; What it means for O stock?

Realty Income increases commercial paper program by $500m; What it means for O stock
Dino Kurbegovic

Realty Income (NYSE: O) has increased the amount of the U.S. dollar-denominated unsecured commercial paper it may issue by $500 million. Following the close of the commercial paper market on July 12, the firm increased the maximum aggregate amount of unsecured commercial paper notes that may be issued from $1.0 billion to $1.5 billion.

The notes will be sold under customary terms in the United States commercial paper note market, and proceeds will be used for general corporate purposes. For the repayment of the notes issued under the program, the company expects to use its $4.25 billion revolving credit facility as a liquidity backstop.

Furthermore, Realty Income declared a $0.2475/share dividend, with a forward yield of 4.28%, making it the 625th consecutive monthly dividend

O chart and analysis

Currently, Realty Income stock is trading at $69.36 with a year-to-date (YTD) performance of -1.84%. 

The support zone ranges from $67.39 to $69.35, formed by a combination of multiple trend lines and important moving averages. Notably, a resistance zone has formed within a range between $73.54 to $74.93.

O 20-50-200 SMA lines chart. Source. Finviz.com data. See more stocks here.

On Wall Street, analysts rate the shares a moderate buy, predicting that the average price in the next 12 months could reach $75.27. This is 8.52% higher than the current trading price of $69.36.

Wall Street analysts’ price targets for O. Source: TipRanks

Battling stagflation

Furthermore, according to Jefferies analyst Jonathon Peterson, REITs within a data center, industrial and senior housing sub-sectors could be best suited for a stagflation environment. 

Moreover, an inflation-driven recession may hurt occupancy rates; however, focusing on high-quality REITs with strong cash positions and high occupancy rates could yield the best results. 

So far, in 2020, REITs have shown that they can keep their occupants and pay out regular dividends to their investors. For investors interested in earning a dividend on their investment Realty Income may well be worth keeping on your watchlist.

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Disclaimer: The content on this site should not be considered investment advice. Investing is speculative. When investing, your capital is at risk.

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