NYSE:O

Stock Analysis Report

Executive Summary

Realty Income, The Monthly Dividend Company is an S&P 500 company dedicated to providing stockholders with dependable monthly income.

Rewards

Trading at 26.2% below its fair value

Earnings are forecast to grow 14% per year

Earnings grew by 15.6% over the past year

Pays a high and reliable dividend of 3.5%

Risk Analysis

Shareholders have been diluted in the past year



Snowflake Analysis

Solid track record established dividend payer.


Similar Companies

Federal Realty Investment Trust

NYSE:FRT

Share Price & News

How has Realty Income's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: O has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

1.1%

O

-0.5%

US REITs

0.5%

US Market


1 Year Return

14.5%

O

14.9%

US REITs

20.3%

US Market

Return vs Industry: O matched the US REITs industry which returned 14.9% over the past year.

Return vs Market: O underperformed the US Market which returned 20.3% over the past year.


Shareholder returns

OIndustryMarket
7 Day1.1%-0.5%0.5%
30 Day2.5%2.1%2.0%
90 Day4.5%6.5%9.4%
1 Year18.9%14.5%19.6%14.9%22.8%20.3%
3 Year44.1%26.7%36.4%19.3%50.1%40.4%
5 Year97.5%59.9%58.1%25.5%73.1%54.1%

Price Volatility Vs. Market

How volatile is Realty Income's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is Realty Income undervalued compared to its fair value and its price relative to the market?

26.2%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: O ($79.67) is trading below our estimate of fair value ($108.03)

Significantly Below Fair Value: O is trading below fair value by more than 20%.


Price To Earnings Ratio

PE vs Industry: O is poor value based on its PE Ratio (62.6x) compared to the REITs industry average (36.3x).

PE vs Market: O is poor value based on its PE Ratio (62.6x) compared to the US market (18.3x).


Price to Earnings Growth Ratio

PEG Ratio: O is poor value based on its PEG Ratio (4.5x)


Price to Book Ratio

PB vs Industry: O is overvalued based on its PB Ratio (2.8x) compared to the US REITs industry average (2.1x).


Next Steps

Future Growth

How is Realty Income forecast to perform in the next 1 to 3 years based on estimates from 6 analysts?

14.0%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: O's forecast earnings growth (14% per year) is above the savings rate (1.7%).

Earnings vs Market: O's earnings (14% per year) are forecast to grow slower than the US market (14.2% per year).

High Growth Earnings: O's earnings are forecast to grow, but not significantly.

Revenue vs Market: O's revenue (10.6% per year) is forecast to grow faster than the US market (7.6% per year).

High Growth Revenue: O's revenue (10.6% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: O's Return on Equity is forecast to be low in 3 years time (5.7%).


Next Steps

Past Performance

How has Realty Income performed over the past 5 years?

11.8%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: O has high quality earnings.

Growing Profit Margin: O's current net profit margins (27.3%) are higher than last year (26.2%).


Past Earnings Growth Analysis

Earnings Trend: O's earnings have grown by 11.8% per year over the past 5 years.

Accelerating Growth: O's earnings growth over the past year (15.6%) exceeds its 5-year average (11.8% per year).

Earnings vs Industry: O earnings growth over the past year (15.6%) exceeded the REITs industry 6.9%.


Return on Equity

High ROE: O's Return on Equity (4.2%) is considered low.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is Realty Income's financial position? (This company is analysed differently as a bank or financial institution)


Financial Position Analysis


Debt to Equity History and Analysis


Balance Sheet

Inventory Level: O has a high level of physical assets or inventory.

Debt Coverage by Assets: O's debt is not covered by short term assets (assets are 0.1x debt).


Financial Institutions Analysis

Asset Level: O's level of assets compared to its equity is low.

Allowance for Bad Loans: Insufficient data to determine if O has a sufficient allowance for bad loans.

Low Risk Liabilities: O reports no customer deposits, loans are made up entirely of externally borrowed funds.

Loan Level: Insufficient data to determine if O has an acceptable proportion of non-loan assets held.

Low Risk Deposits: O has advanced significantly more loans than the customer deposits it holds.

Level of Bad Loans: Insufficient data to determine if O has an appropriate level of bad loans.


Next Steps

Dividend

What is Realty Income's current dividend yield, its reliability and sustainability?

3.50%

Current Dividend Yield


Upcoming Dividend Payment

Purchase Realty Income before the 'Buy Limit' to receive their next dividend payment.


Dividend Yield vs Market

company3.5%marketbottom25%1.4%markettop25%3.7%industryaverage3.5%forecastin3Years3.6%

Current dividend yield vs market & industry

Notable Dividend: O's dividend (3.5%) is higher than the bottom 25% of dividend payers in the US market (1.44%).

High Dividend: O's dividend (3.5%) is low compared to the top 25% of dividend payers in the US market (3.73%).


Stability and Growth of Payments

Stable Dividend: O's dividends per share have been stable in the past 10 years.

Growing Dividend: O's dividend payments have increased over the past 10 years.


Current Payout to Shareholders

Dividend Coverage: At its current payout ratio (84.6%), O's payments are covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: O's dividends in 3 years are forecast to be thoroughly covered by earnings (0.2% payout ratio).


Next Steps

Management

How experienced are the management team and are they aligned to shareholders interests?

1.5yrs

Average management tenure


CEO

Sumit Roy (49yo)

1.3yrs

Tenure

US$7,010,019

Compensation

Mr. Sumit Roy serves as President since November 2015 and has been Chief Executive Officer and Director at Realty Income Corporation since October 16, 2018. Mr. Roy served as the Chief Operating Officer of ...


CEO Compensation Analysis

Compensation vs Market: Sumit's total compensation ($USD7.01M) is below average for companies of similar size in the US market ($USD10.78M).

Compensation vs Earnings: Sumit's compensation has increased by more than 20% in the past year.


Leadership Team

NamePositionTenureCompensationOwnership
Sumit Roy
President1.3yrsUS$7.01m0.028% $7.4m
Mark Hagan
Executive VP & Chief Investment Officer1.8yrsUS$2.06m0.0027% $703.3k
Michael Pfeiffer
Chief Administrative Officer1yrsUS$2.35m0.0035% $928.9k
Paul Meurer
Senior Advisor0.08yrsUS$3.08m0.0066% $1.7m
Neil Abraham
Executive VP & Chief Strategy Officer1.8yrsUS$1.93m0.0056% $1.5m
Sean Nugent
Senior VP0.08yrsno data0.0029% $766.2k
Shannon Kehle
Senior Vice President of Human Resources6.1yrsno datano data
Teresa Glenn
Associate VP0yrsno datano data
Benjamin Fox
Executive VP of Asset Management & Real Estate Operations7.1yrsno data0.0030% $789.9k
Ross Edwards
Senior Vice President of Leasing & Real Estate Operations0yrsno datano data

1.5yrs

Average Tenure

49yo

Average Age

Experienced Management: O's management team is not considered experienced ( 1.5 years average tenure), which suggests a new team.


Board Members

NamePositionTenureCompensationOwnership
Sumit Roy
President1.3yrsUS$7.01m0.028% $7.4m
Michael McKee
Non-Executive Chairman of the Board8yrsUS$276.64k0.046% $12.0m
Kathleen Allen
Independent Director20yrsUS$241.64k0.025% $6.6m
Gerardo Lopez
Independent Director1.6yrsUS$231.48k0.0024% $642.9k
A. Chapman
Independent Director8yrsUS$231.64k0.0045% $1.2m
Ronald Merriman
Independent Director14.6yrsUS$256.64k0.0056% $1.5m
Priya Huskins
Independent Director12.2yrsUS$256.64k0.0084% $2.2m
Gregory McLaughlin
Independent Director12.7yrsUS$241.64k0.0055% $1.4m
Christie Kelly
Director0.3yrsno datano data
Reginald Gilyard
Independent Director1.6yrsUS$231.48k0.0024% $642.9k

8.0yrs

Average Tenure

59.5yo

Average Age

Experienced Board: O's board of directors are considered experienced (8 years average tenure).


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have been diluted in the past year, with total shares outstanding growing by 7.9%.


Top Shareholders

Company Information

Realty Income Corporation's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Realty Income Corporation
  • Ticker: O
  • Exchange: NYSE
  • Founded: 1969
  • Industry: Retail REITs
  • Sector: Real Estate
  • Implied Market Cap: US$26.241b
  • Market Cap: US$26.204b
  • Shares outstanding: 326.38m
  • Website: https://www.realtyincome.com

Number of Employees


Location

  • Realty Income Corporation
  • 11995 El Camino Real
  • San Diego
  • California
  • 92130
  • United States

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
ONYSE (New York Stock Exchange)YesCommon StockUSUSDOct 1994
RY6DB (Deutsche Boerse AG)YesCommon StockDEEUROct 1994
0KUELSE (London Stock Exchange)YesCommon StockGBUSDOct 1994

Biography

Realty Income, The Monthly Dividend Company is an S&P 500 company dedicated to providing stockholders with dependable monthly income. The company is structured as a REIT, and its monthly dividends are supported by the cash flow from over 5,900 real estate properties owned under long-term lease agreements with commercial tenants. To date, the company has declared 592 consecutive common stock monthly dividends throughout its 50-year operating history and increased the dividend 103 times since Realty Income's public listing in 1994 (NYSE: O). 


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/02/20 00:02
End of Day Share Price2020/02/19 00:00
Earnings2019/09/30
Annual Earnings2018/12/31


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.