WELL - Realty Income: Perhaps The Smartest 6% Yield You Can Own
2024-03-17 11:31:35 ET
Summary
- Realty Income offers 6% for an upfront dividend yield (rising over time) and extensive real estate diversification for new investors.
- The recent all-stock merger deal with Spirit Realty Capital is expected to be a small net positive for shareholders.
- Realty Income has outperformed the S&P 500 and income-focused alternatives over the past two decades. Inflation favors real estate.
- Lower-than-normal valuations should support price and open up the opportunity for share appreciation when the Fed drops rates.
I last wrote a bullish note on Realty Income (O) in October here . The argument was its 6%+ yield, unmatched real estate diversification, conservative balance sheet, and lower-than-normal valuation were quite attractive for new investors. My earlier title still sums up the situation best, " Realty Income: Getting More Interesting With Same Price As 2015 ." Of course, underlying values have grown dramatically over the past nine years. So, it's very logical to conclude new buyers are getting cheaper long-term real estate value on every buck you invest today.
The good news for prospective buyers is a quick move from under $49 at my previous article posting to almost $60 has reversed back to $52. I am writing on Realty Income again to point out tremendous value and a wonderful upfront 6% dividend yield are back in focus. Yes, smart investors are getting another crack at buying shares, if they missed the October opportunity....
Realty Income: Perhaps The Smartest 6% Yield You Can Own