Realty Income: Buy The Dip Hand Over Fist

Like
Comment
Favorite

Realty Income: Buy The Dip Hand Over Fist

seekingalpha2023-08-07

porcorex Sometimes there are bargains that come around that are too hard to resist. While it may be tempting to make an outsized bet on very high yielding stocks, a better idea may be to take a ...

Source Link

Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.

Report

Comment

No comments yet

Most Discussed

7x24

All

Terms and Conditions·Privacy Policy

Company: TTMF Limited. Tech supported by Xiangshang Yixin.

Email：uservice@ttm.financial

{"i18n":{"language":"en_US"},"data":{"share":"https://ttm.financial/m/news/2357823115?lang=en_US&edition=fundamental","thumbnail":"https://static.seekingalpha.com/cdn/s3/uploads/getty_images/1182655653/image_1182655653.jpg","is_english":true,"pubTime":"2023-08-07 20:05","share_image_url":"https://static.laohu8.com/5a36db9d73b4222bc376d24ccc48c8a4","id":"2357823115","market":"us","top_or_hot":-1,"title":"Realty Income: Buy The Dip Hand Over Fist","media":"seekingalpha","content":"<div>\n<p>porcorex Sometimes there are bargains that come around that are too hard to resist. While it may be tempting to make an outsized bet on very high yielding stocks, a better idea may be to take a ...</p>\n\n<a href=\"https://seekingalpha.com/article/4624760-realty-income-q2-2023-earnings-buy-the-dip-hand-over-fist\">Source Link</a>\n\n</div>\n","source":"seekingalpha","html":"<!DOCTYPE html>\n<html>\n<head>\n<meta http-equiv=\"Content-Type\" content=\"text/html; charset=utf-8\" />\n<meta name=\"viewport\" content=\"width=device-width,initial-scale=1.0,minimum-scale=1.0,maximum-scale=1.0,user-scalable=no\"/>\n<meta name=\"format-detection\" content=\"telephone=no,email=no,address=no\" />\n<title>Realty Income: Buy The Dip Hand Over Fist</title>\n<style type=\"text/css\">\na,abbr,acronym,address,applet,article,aside,audio,b,big,blockquote,body,canvas,caption,center,cite,code,dd,del,details,dfn,div,dl,dt,\nem,embed,fieldset,figcaption,figure,footer,form,h1,h2,h3,h4,h5,h6,header,hgroup,html,i,iframe,img,ins,kbd,label,legend,li,mark,menu,nav,\nobject,ol,output,p,pre,q,ruby,s,samp,section,small,span,strike,strong,sub,summary,sup,table,tbody,td,tfoot,th,thead,time,tr,tt,u,ul,var,video{ font:inherit;margin:0;padding:0;vertical-align:baseline;border:0 }\nbody{ font-size:16px; line-height:1.5; color:#999; background:transparent; }\n.wrapper{ overflow:hidden;word-break:break-all;padding:10px; }\nh1,h2{ font-weight:normal; line-height:1.35; margin-bottom:.6em; }\nh3,h4,h5,h6{ line-height:1.35; margin-bottom:1em; }\nh1{ font-size:24px; }\nh2{ font-size:20px; }\nh3{ font-size:18px; }\nh4{ font-size:16px; }\nh5{ font-size:14px; }\nh6{ font-size:12px; }\np,ul,ol,blockquote,dl,table{ margin:1.2em 0; }\nul,ol{ margin-left:2em; }\nul{ list-style:disc; }\nol{ list-style:decimal; }\nli,li p{ margin:10px 0;}\nimg{ max-width:100%;display:block;margin:0 auto 1em; }\nblockquote{ color:#B5B2B1; border-left:3px solid #aaa; padding:1em; }\nstrong,b{font-weight:bold;}\nem,i{font-style:italic;}\ntable{ width:100%;border-collapse:collapse;border-spacing:1px;margin:1em 0;font-size:.9em; }\nth,td{ padding:5px;text-align:left;border:1px solid #aaa; }\nth{ font-weight:bold;background:#5d5d5d; }\n.symbol-link{font-weight:bold;}\n/* header{ border-bottom:1px solid #494756; } */\n.title{ margin:0 0 8px;line-height:1.3;color:#ddd; }\n.meta {color:#5e5c6d;font-size:13px;margin:0 0 .5em; }\na{text-decoration:none; color:#2a4b87;}\n.meta .head { display: inline-block; overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\nRealty Income: Buy The Dip Hand Over Fist\n</h2>\n\n<h4 class=\"meta\">\n\n\n2023-08-07 20:05 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://seekingalpha.com/article/4624760-realty-income-q2-2023-earnings-buy-the-dip-hand-over-fist><strong>seekingalpha</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>porcorex Sometimes there are bargains that come around that are too hard to resist. While it may be tempting to make an outsized bet on very high yielding stocks, a better idea may be to take a ...</p>\n\n<a href=\"https://seekingalpha.com/article/4624760-realty-income-q2-2023-earnings-buy-the-dip-hand-over-fist\">Source Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","isBrief":false,"type":0,"news_type":1,"symbol":"BK4550","symbol_name":"红杉资本持仓","start_time":0,"source_url":"https://seekingalpha.com/article/4624760-realty-income-q2-2023-earnings-buy-the-dip-hand-over-fist","article_id":"2357823115","we_media_id":null,"thumbnails":["https://static.seekingalpha.com/cdn/s3/uploads/getty_images/1182655653/image_1182655653.jpg"],"rights":null,"url":"https://stock-news.laohu8.com/highlight/detail?id=2357823115","pubTimestamp":1691409900,"columns":[],"sourceInfo":{"source_id":"seekingalpha","name":"Seeking Alpha"},"weMediaInfo":null,"summary":"porcorex Sometimes there are bargains that come around that are too hard to resist. While it may be tempting to make an outsized bet on very high yielding stocks, a better idea may be to take a balanced approach on durable names that are at very little risk of cutting their dividend. Building a dividend portfolio is like building a city brick by brick, and it’s very strong names like Realty Income Corp.  that have stood the test of time and can be the foundation of a dividend portfolio. I last covered this REIT in 2020. Essentially, every share that’s purchased in these types of companies comes to extra income that can be counted upon in the future. As shown below Realty income now trades far below its 52-week high of $76 and below its near-term high of near-$65. In this article, I explore what makes Realty Income a terrific buy with a yield comfortably above 5%, so let’s dive in.   O Stock  Why Realty Income?","collect":0,"end_time":0,"defaultTopTitle":"seekingalpha.com","property":[],"viewcount":null,"language":"en","relate_stocks":{"161125":"标普500","513500":"标普500ETF","BK4550":"红杉资本持仓","BK4588":"碎股","WPC":"W. P. Carey Inc","O":"Realty Income Corp","BK4231":"零售房地产信托","SDS":"两倍做空标普500ETF","BK4581":"高盛持仓","BK4504":"桥水持仓","OEF":"标普100指数ETF-iShares","SH":"标普500反向ETF","IVV":"标普500指数ETF","SSO":"两倍做多标普500ETF","BK4160":"多样化房地产投资信托v","BK4585":"ETF&股票定投概念","BK4534":"瑞士信贷持仓","SPXU":"三倍做空标普500ETF","BK4080":"零售业房地产投资信托","UPRO":"三倍做多标普500ETF","SPY":"标普500ETF","OEX":"标普100",".SPX":"S&P 500 Index","BK4559":"巴菲特持仓"},"translate_title":"房地产收入：一举买进","themeId":null,"isJumpTheme":false,"ttsUrl":null,"symbols_score_info":{"161125":0.6,"513500":0.6,"WPC":1,"SPY":1,"O":1,"UPRO":0.6,"SSO":0.6,"SPXU":0.6,"SH":0.6,"SDS":0.6,"OEX":0.6,"OEF":0.6,"IVV":0.6,"ESmain":0.6,".SPX":0.6},"content_text":"porcorex Sometimes there are bargains that come around that are too hard to resist. While it may be tempting to make an outsized bet on very high yielding stocks, a better idea may be to take a balanced approach on durable names that are at very little risk of cutting their dividend. Building a dividend portfolio is like building a city brick by brick, and it’s very strong names like Realty Income Corp. (NYSE:O) that have stood the test of time and can be the foundation of a dividend portfolio. I last covered this REIT in 2020. Essentially, every share that’s purchased in these types of companies comes to extra income that can be counted upon in the future. As shown below Realty income now trades far below its 52-week high of $76 and below its near-term high of near-$65. In this article, I explore what makes Realty Income a terrific buy with a yield comfortably above 5%, so let’s dive in.   O Stock (Seeking Alpha) Why Realty Income? Realty Income is the largest net lease REIT by asset size, and has a very strong track record of delivering shareholder returns. This is reflected by its 14.2% compound annual total return since its IPO in 1994. It’s also the only net lease REIT to have A-/A3 credit ratings from S&P and Moody’s. As shown below, Realty Income was able to produce strong growth over time for far less volatility than the market average with a Beta of just 0.5.   Investor Presentation At present, O carries a diversified portfolio of 13,118 properties spread across 1,303 tenants and 85 different industries. It’s also one of just two U.S. net lease REITs, with W. P. Carey (WPC) being the other one, to have international exposure, with presence in Ireland, Italy, Spain and the U.K. This enables Realty Income to source properties where the cap rates may be more attractive . It also enables it to tap the Eurobond market, where interest rates tend to be lower. As shown below, benchmark rates in the Eurozone are 125 bps lower than that of the U.S.   Trading Economics Realty Income also has a quality tenant base, with three-quarters of annual base rent stemming from non-discretionary, low price and/or service-oriented retail, and another 15% being from non-retail. This adds up to 91% of O’s rent’s being economically and/or e-commerce resilient. As shown below, convenience stores, dollar stores, home improvement, and drug stores make up O’s top 5 categories, comprising 40% of annual base rent.   Investor Presentation Meanwhile, O has continued its track record of acquisitions with a staggering $3.1 billion in new property acquisitions during the second quarter for 710 properties with a weighted average initial cash yield of 6.9%. This was funded in part by $2.2 billion of equity issuances at a weighted average price of $61.89, which equates to a cost of equity of around 6.67%. While this investment spread isn’t particularly high, annual rent escalators would increase that spread over time, and Realty Income was able to raise $1 billion worth of debt financing at a weighted average yield of around 4.8% further reducing the total cost of capital. Meanwhile, the portfolio remains in solid shape with a 99.0% occupancy rate, and importantly, O was able to grow its bottom line with accretive acquisitions and rent escalators. Speaking of which, Realty Income was able to grow its annual base rent by 2.7% YoY due to a combination of rent escalators and increase in lease renewal rates, and this helped to drive AFFO per share growth of 3.1% YoY to $1.00 for Q2. As shown below, O’s occupancy has never trended below 96% over the past 23 years.   Investor Presentation The strong results enabled Realty income to announce its 103rd consecutive quarterly dividend increase, and the current annualized dividend rate of $3.066 per share is 3.2% higher than where it was in the prior year period. This also equate to a well-covered AFFO payout ratio of 76.5%, resulting in plenty of retained capital with which Realty Income can reinvest for business expansion. Looking ahead, management sees robust growth opportunities due to the benefits of its size and scale in a capital constrained environment. This is supported by increased guidance to $7 billion in total investments for 2023. This represents 15% of the current asset base, as compared to 7% annually over the past 5 years. Future growth could include international and new asset categories. As shown below, O’s international expansion began in 2019, and has entered into large-scale gaming with its acquisition of the Wynn Property in Boston and emerging industries such as Vertical Farming in 2023.   Investor Presentation Growth is supported by a strong balance sheet with A-/A3 credit ratings, as mentioned earlier. This is supported by a low net debt to EBITDA ratio of 5.3x and a strong 4.6x fixed charge coverage ratio. Moreover 96% of O’s debt is unsecured and 92% is held at fixed rates with a weighted average maturity of 6.7 years. As shown below, O has minimal debt maturities for the remainder of the year, and its debt is well-staggered, thereby minimizing the interest rate impacts of any given year.   Investor Presentation Risks to Realty Income include potential for a recession, which may pressure some of its tenant base. Plus, materially higher interest rates would make cost of growth more costly and could pressure the bottom line as it refinances debt at higher rates. However, higher interest rates could also force higher levered owners of properties to sell, thereby pushing up cap rates for Realty Income on new acquisitions. Lastly, O represents solid value at the current price of $59.22 with a forward P/FFO of 14.3, sitting well under its normal P/FFO of 17.5. O is generally a good buy when its yield reaches over 5%. This, combined with an expectation of mid-single digit annual FFO/share growth could result in the long-term historical return of the S&P 500 (SPY) with far less volatility and a far higher yield.   FAST Graphs Investor Takeaway  Realty Income now represents solid value for those investors who prize a safe and growing yield above 5%. It has a very strong track record of value creation and has plenty of greenfield opportunities internationally and in new asset categories. This is supported by a durable existing portfolio with very high occupancy rate and a fortress balance sheet that offers financial flexibility and stability. At the current low valuation and yield, Realty Income could reasonably produce the long-term annualized return of the S&P 500 with a far higher yield and less volatility.","kind":"highlight","is_publish_news":true,"is_publish_highlight":false,"is_publish_live":false,"is_publish_wemedia":null,"editions":null,"column":"","sentiment":"0","news_tag":"","news_rank":0,"symbols":[],"gpt_button":1},"commentList":[],"hasMoreComments":false,"newsSizeData":{"likeSize":0,"commentSize":0,"repostSize":0,"favoriteSize":0,"likeStatus":false,"favoriteStatus":false}}