When investors seek a steady income stream they can pass down through the years, Realty Income Corporation stands out with a 5.4 % yield and a rare history of annual dividend increases. Here’s what makes this REIT worth a close look.
What Realty Income offers now
Who: Realty Income is a real-estate investment trust (REIT) listed on the NYSE under the ticker “O”.
What: It has a current annual dividend of around $3.23 per share, delivering a yield of approximately 5.4 %, based on a share price of roughly $60. Why it matters: A yield in this range is significantly higher than many dividend stocks today, offering the potential for income now and long term.
Dividend track record: It has declared 132 dividend increases since its listing in 1994, reflecting more than 30 years of annual hikes.
Bottom line: For investors focused on income rather than fast growth, Realty Income presents a compelling case of reliability.
Why the 5.4 % yield feels both solid and safe
The yield at 5.4 % comes with some interesting characteristics:
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The business is mature and slow-growing, which creates less excitement but more dependability.
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The average compound annual dividend growth rate is about 4.2 % since its listing.
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The monthly dividend structure means investors receive payouts every month rather than quarterly.
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Because it is a REIT, the company must return most of its earnings to shareholders in the form of dividends, which helps explain the attractive yield.
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The business model involves long-term leases and a large property portfolio across the United States and Europe, which adds geographical and tenant diversity.
While past performance is no guarantee of future results, these features give the yield more credibility than many high-yield stocks that wear patterns of risk.
How Realty Income has held up through tough times
One of the biggest tests for any dividend company is whether it can maintain payments during market stress. Realty Income’s record includes:
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Declaring its 662nd consecutive monthly dividend and counting.
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Navigating the dot-com crash, the Great Recession, the COVID-19 pandemic and rising interest rates without cutting monthly distributions.
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The business model of single-tenant net‐lease properties (where the tenant pays taxes, insurance, and maintenance) helps reduce landlord risk.
That track record provides a foundation of trust for income-oriented investors who prioritize staying power more than rapid growth.
Key metrics and risk factors to weigh
Here is a quick glance at some important data points:
| Metric | Value / Comment |
|---|---|
| Yield | ≈ 5.4 % annualized on $3.23 dividend at ~$60 share price. |
| Dividend growth rate | ~4.2 % per year since listing. |
| Payout frequency | Monthly, which adds smoother cash flow for investors. |
| Growth prospects | Slow but steady—company emphasises reliability rather than speculative expansion. |
| Risks | Interest rate sensitivity (REITs often suffer when rates rise), slower growth in property values or leasing, heavy reliance on tenant health and long-term leases. |
Important: Although dividend growth is consistent, it is modest. Some recent reports show 2-3 % growth in recent years. Investors should not expect double-digit growth like tech stocks.
How this affects long-term income and inheritance planning
For those aiming to build what’s often called “generational wealth,” Realty Income offers a tangible path:
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A reliable income stream paid monthly means you can count on cash flow while holding shares.
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Over decades, even modest dividend growth combined with reinvestment or simply collection can build a meaningful income base.
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Because the company has increased its payout for over 30 years, the probability of a cut appears lower than many high-yield alternatives.
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You can hand this asset down to heirs, potentially providing them with ongoing income rather than just a lump-sum inheritance.
Think of it like owning a piece of real estate that pays you every month, rather than hoping it sells for a big number later.
The place of Realty Income in a diversified portfolio
In practical terms, here are some ways investors might consider Realty Income:
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Income-first portfolios: If your goal is renting your capital (via dividends) rather than chasing price gains, this REIT fits well.
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Dividend anchors: It could serve as a “steady platform” in a portfolio alongside higher-growth but more volatile stocks.
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Inheritance mindset: For older investors or those seriously planning wealth transfer, the monthly income model can ease transition for heirs.
However, it should not be the entire portfolio. For balance and growth, you’ll still want exposure to sectors and companies with higher growth potential, and you’ll want to consider tax implications and geographic diversification.
