Realty Income Corporation (O)

Core U.S. inflation rose by 0.3% month over month in July, its highest increase in six months. That put the trailing-12-month inflation rate at 2.7%.

High-yielding dividend stocks often face skepticism. While a robust dividend yield can signal a greater risk of a future payout cut, this isn't always true.

O's triple-net leases and broad tenant base drive steady cash flows and support consistent dividend growth.

Realty Income is my largest REIT holding due to its durable, tangible monthly income streams, which I treat as permanent annuities for financial independence. With shares nearing $60, I believe a further recovery toward $70 is likely, signaling the early stages of a broader rebound. In this article I articulate the case for O hitting the $70 per share mark in the foreseeable future.

Realty Income remains a solid income-focused REIT with a strong dividend history, but recent underperformance raises concerns about future growth and portfolio quality. AFFO growth is modest, guidance was raised, but investment spreads may be overstated due to cost of capital assumptions, potentially masking weaker accretion. Valuation is attractive compared to peers, offering stable income and potential upside if interest rates fall, but capital appreciation is less compelling.

If you're an income investor, it can be a little overwhelming to choose the best dividend stocks to fill your portfolio. There are so many to choose from -- thousands of stocks and funds from which you can get a quarterly dividend payment.

Realty Income (O -0.56%) and Agree Realty (ADC 0.20%) are competitors in the net lease niche of real estate investment trust (REIT) arena. Realty Income is still down around 25% from its pre-coronavirus pandemic highs, while Agree Realty has rallied back some and is now just 10% below its peak.

O's 30+ years of dividend growth, global expansion and resilient portfolio fuel its appeal for income-focused investors.

Dividend Harvesting Portfolio Week 233: $23,300 Allocated, $2,478.50 In Projected Dividends

Dividend stocks are a favorite among investors for good reason. They provide a steady income stream and offer a promising avenue for total return.

AGNC Investment (AGNC 0.31%) and Realty Income (O 1.97%) focus on paying dividends. These real estate investment trusts (REITs) own income-generating assets, providing cash flow for attractive monthly dividends.

Realty Income continues to deliver modest adjusted FFO growth and is expanding its portfolio through acquisitions, especially in Europe. The REIT's low dividend payout ratio and robust dividend coverage profile make it a safe choice for income-focused investors. There is significant upside potential if Realty Income capitalizes on the Data Center market growth opportunity, diversifying beyond retail real estate.

REITs are poised to outperform in the coming years as interest rates are expected to decline, reversing recent underperformance. NNN REIT offers an attractive entry point with a strong yield, conservative payout, and potential price appreciation as headwinds subside. Alexandria Real Estate Equities is fundamentally sound despite recent price drops, offering a high yield and significant upside if rates fall.

Realty Income stock has underperformed, but improved guidance and macro trends suggest the worst is likely over for long-term investors. Management's upgraded 2025 AFFO outlook and successful European diversification has offered more confidence in its fundamental growth drivers. A recovery in AFFO growth is expected from 2026, while interest rates headwinds are expected to be lowered further.

Many retirees face a shortfall between their Social Security benefits, savings, and actual income needs. One study found this gap to be as high as 33% for the average U.S. household.

Back in 2022 and 2023, many high-yield dividend stocks slumped as rising interest rates drove income-seeking investors toward risk-free CDs and Treasury bills. But in 2024, many of those stocks bounced back as the Federal Reserve cut its benchmark lending rate three times.