Realty Income: An Outperformer in 2022
By Brian Nelson, CFA
The equity REIT area continues to face considerable pressure during 2022, with the Vanguard Real Estate ETF (VNQ) down ~24% so far this year, but Realty Income (O), known prominently for its monthly dividends and dividend growth track record, has bucked the trend. With an estimated forward dividend yield of ~4.9%, Realty Income is down only ~12% so far this year, an enviable position relative to its peers.
Realty Income reported third-quarter results for the period ending September 30, 2022, and they were pretty good.
Concluding Thoughts
We continue to be impressed with Realty Income’s ability to keep raising its dividend payout, and while REIT economics have deteriorated in 2022, the company is doing much better than peers. We’re not fans of the capital-market dependence risk of REITs, in general, and Realty Income holds a rather elevated net debt to annualized pro forma adjusted EBIT Are ratio of 5.2x, but we’re sticking with the company as an idea in the simulated Dividend Growth Newsletter portfolio at this time. The company has raised its dividend 117 times since it was listed on the New York Stock Exchange in 1994.
Source: Valuentum |
