Monthly Dividend: Realty Income (O)
Realty Income (O) is a real estate investment trust that focuses on retail, boasting a portfolio of more than 3,600 properties representing more than 27 million square feet of available lease space.
Realty Income looks primarily for free-standing retail buildings, and its highest percentage of lease revenue is derived from distribution center properties — primarily from its largest tenant (5.3% of the portfolio), FedEx (FDX). The portfolio also includes Walgreen (WAG) at 4% of the portfolio and Family Dollar (FDO) at 3%.
As a REIT, Realty Income must pay out at least 90% of its income as dividends to investors, and Realty Income does in the most shareholder-friendly way possible: once every 30 days or so. Realty Income has been around for 44 years and has paid out monthly dividends for nearly 20 years.
For Pete’s sake, Realty Income actually describes itself as the “Monthly Dividend Company!”
O shares’ current 18.19-cent payout is roughly 30% better than it was four years ago, and translates into an enticing 5.35% yield. Because of the nature of REIT dividends, Realty Income tends to slightly increase its payout several times a year.