SRC - This 6%-Yielding Dividend Stock's Acquisition Binge Will Give It the Power to Continue Growing Its Payout
2023-11-08 08:26:00 ET
Realty Income (NYSE: O) has grown into one of the largest real estate investment trusts (REIT) over the past quarter century. Acquisitions have been the main growth driver. It has merged with other REITs, acquired large-scale property portfolios, and purchased one-off properties in sale-leaseback transactions .
Despite higher interest rates, the REIT has gone on a shopping spree this year. It recently agreed to acquire fellow REIT Spirit Realty (NYSE: SRC) in a $9.3 billion deal . On top of that, it's on pace to purchase about $9 billion in properties this year in smaller transactions. Those deals will enable the company to continue increasing its 6%-yielding dividend, something it has done over 122 times since going public in 1994.
Realty Income entered this year expecting to make over $5 billion in property acquisitions. That would have been down from last year's record volume of about $9 billion in property-level acquisitions. The company was conservative due to the potential impact of rising interest rates on the commercial real estate market.
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This 6%-Yielding Dividend Stock's Acquisition Binge Will Give It the Power to Continue Growing Its Payout