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Realty Income Corp O

Morningstar Rating
$55.01 +0.38 (0.70%)
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Company Report

Realty Income Earnings: Invests Over $300 Million in Europe at Average 8.2% Cap Rate

Realty Income reported first-quarter results that were slightly better than we anticipated, leading us to reaffirm our $76 fair value estimate for the no-moat company. Economic occupancy declined 10 basis points sequentially to 98.8%, though that is slightly better than our 98.6% estimate. Re-leasing spreads were 4.3%, better than our estimate of new rent being 2.5% higher compared with prior lease terms. However, same-store net operating income was only up 0.8%, below our estimate of 2.3% growth. Still, Realty Income reported adjusted funds from operations of $1.03 per share, a penny better than our $1.02 estimate and $0.05 better than the $0.98 the company reported in the first quarter of 2023.

Price vs Fair Value

O is trading at a 68% premium.
Price
$55.01
Fair Value
$24.00
Uncertainty
Low
1-Star Price
$16.00
5-Star Price
$94.50
Economic Moat
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Capital Allocation
Wcxjxhcmq

Bulls Say, Bears Say

Bulls

Realty Income provides a reliable, albeit slow-growing, monthly dividend built on a steadily performing underlying portfolio through various market conditions.

Bears

It will take an increasingly greater volume of attractive risk-adjusted acquisitions to create meaningful shareholder value growth, possibly pushing Realty Income to take more risk as competition expands for its traditionally targeted assets.

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News

Trading Information

Previous Close Price
$54.63
Day Range
$54.6155.14
52-Week Range
$45.0464.18
Bid/Ask
$54.93 / $55.01
Market Cap
$47.90 Bil
Volume/Avg
3.9 Mil / 6.1 Mil

Key Statistics

Price/Earnings (Normalized)
39.70
Price/Sales
9.15
Dividend Yield (Trailing)
5.59%
Dividend Yield (Forward)
5.61%
Total Yield
5.59%

Company Profile

Realty Income owns roughly 13,400 properties, most of which are freestanding, single-tenant, triple-net-leased retail properties. Its properties are located in 49 states and Puerto Rico and are leased to 250 tenants from 47 industries. Recent acquisitions have added industrial, gaming, office, manufacturing, and distribution properties, which make up roughly 17% of revenue.
Sector
Real Estate
Industry
REIT - Retail
Stock Style Box
Mid Core
Total Number of Employees
418

Competitors

Valuation

Metric
O
REG
FRT
Price/Earnings (Normalized)
39.7029.0738.06
Price/Book Value
1.221.593.06
Price/Sales
9.157.707.22
Price/Cash Flow
13.7813.8714.89
Price/Earnings
O
REG
FRT

Financial Strength

Metric
O
REG
FRT
Quick Ratio
1.491.241.01
Current Ratio
1.551.351.01
Interest Coverage
1.963.322.40
Quick Ratio
O
REG
FRT

Profitability

Metric
O
REG
FRT
Return on Assets (Normalized)
1.94%3.36%3.13%
Return on Equity (Normalized)
3.39%6.10%9.43%
Return on Invested Capital (Normalized)
3.39%4.59%5.04%
Return on Assets
O
REG
FRT
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REIT - Retail Industry Comparables

Ticker
Name
Morningstar Rating for Stocks
Capital Allocation
Economic Moat
Market Cap
SPG
Simon Property Group IncLhzmckjsGqms$48.2 Bil
KIM
Kimco Realty CorpCsqjrccwJvtsg$12.8 Bil
UNBLF
Unibail-Rodamco-Westfield Act. SIIC ET STES FONC.EUROP.Ycybd$11.9 Bil
UNIRF
Unibail-Rodamco-Westfield ADRYrtb$11.9 Bil
LKREF
Link Real Estate Investment TrustPmy$11.4 Bil
REG
Regency Centers CorpYxrmlzrxSwdyd$11.0 Bil
STGPF
Scentre GroupBgbl$10.8 Bil
FRT
Federal Realty Investment TrustJnfxvllvgxKxwz$8.4 Bil
MAC
Macerich CoJzrlvvqcNvbd$3.3 Bil

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