WPC - Who Should And Who Shouldn't Buy 6%-Yielding Realty Income Stock Before Q1 Results
2024-05-04 15:21:57 ET
Summary
- Realty Income stock has performed well, returning nearly 14% in total returns in just over six months, outperforming the broader REIT index since I called it a Strong Buy.
- I give the stock a fresh look ahead of Q1 results.
- I detail the bear thesis as well as the bull thesis on the stock and share where I currently stand.
Back on October 12, 2023, I called Realty Income ( O ) a strong buy because it had dipped significantly, offering a dividend yield of over 6%, an expected roughly 3% per share CAGR moving forward, and was trading at a 14% discount to its NAV despite historically trading at a premium to NAV. This presented a very attractive risk-adjusted opportunity to deploy capital for risk-averse, income-focused investors, given the uncertainty facing the economy and the geopolitical scene that could spiral out of control at any time. That confidence was proven justified, as since then the stock has returned nearly 14% in total returns in just a little over six months, meaningfully outperforming the broader REIT index ( VNQ ) during that period: