With the stock market offering diverse investment opportunities, picking an equity that almost guarantees a steady income stream becomes challenging. This is more challenging, considering the market is susceptible to factors such as the general economic outlook that might spur short-term volatility.
However, several stocks remain with the potential to drive monthly income through approaches such as dividend payments. In this case, the real estate investment trust (REIT) Realty Income Corporation (NYSE: O) is among the equities with the potential to drive income for investors.
Unlocking monthly income with O
Realty Income has, over the years, emerged as a beacon for income investors, providing a steady stream of dividends with a history of financial stability. Realty Income has increased its dividend over 100 times since its public listing.
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Specifically, the company has earned the branding of “The Monthly Dividend Company,” and over the last five years, it has witnessed over 20 dividend increases, maintaining a compound annual dividend growth rate of 4.3% since 1994.
At the same time, Realty Income has a 12-month trailing dividend yield of 5.56%, with the forward dividend projected to be 5.60%. In this case, the figures could suggest an increase in the coming months.
Notably, the next dividend payment, scheduled for February 15, 2024, will see a dividend of $0.26 per share.
Realty Income’s key fundamentals
Beyond its dividend strength, Realty Income is supported by a resilient business model and diversified portfolio, featuring tenants with service, non-discretionary, or low-price-point components for stable growth.
Additionally, strategic acquisitions and developments, such as the joint venture with Digital Realty for build-to-suit data centers, highlight the company’s drive to expansion. Notably, in the first three quarters of 2023, Realty Income invested $6.8 billion in properties.
At the same time, Realty Income has a strong financial position, and in 2023, the company had $4.5 billion in liquidity during the first three quarters. For investors, this indicates the company’s ability to manage financial obligations.
Analysts’ take on O
According to data from TipRanks, 11 Wall Street analysts offering 12-month price targets for Realty Income believe the stock has upside potential in the coming months. They have forecasted an average price target of $61.98, with a high forecast of $67.75 and a low forecast of $55. The average price target represents a 13.43% change from the last price of $54.64.
Despite the optimistic projection, the price of O has taken a hit in 2024, dropping by almost 6% on a year-to-date basis.
Generally, with past stellar performance, Realty Income’s previous success doesn’t guarantee future results.
Disclaimer: The content on this site should not be considered investment advice. Investing is speculative. When investing, your capital is at risk.
