Recent Buy – Realty Income $O

GA

What’s up everybody? How was your weekend?

Mine was great. The feature picture on the front page was from the Canel walk along the flood wall in my city. (I finally hire a contractor to add a wall to make a 3rd bedroom in the 2nd apartment. That way it’s a bit more attractive to students and families.) The apartment is in downtown. Our little city is located next to the river. So, to check the work progress from the contractor, Mr.W and I decided to go for a walk a long the river. Normally, the water is perfectly clear, but it’s been raining lately, hence the water is quite red.

Probably the real purpose was to play Pokemon Go (I hatched 4 – 2km eggs since Friday – between hiking at the park near my house (also foraging vegetables LOL), and the Canal Walk. 😛 Complaining about gain 10lbs for working too much serving me no good. I put that into action and start working out more. So, walking is a great start. We’ll store our bike near the bike trail downtown,  so we’ll get to bike more in the future. I’d probably hatch a lot more pokemon eggs that way. heheh.

With rental property, I’d still have to do some work – posting it on craiglist, zillow, answer to ads, answer their question, etc. Regardless, how “passive” or “semi-passive” it is. So, I’m going back to owning some REITs – high yield and totally passive. Well, there are many options, but I think a lot of Dividend Growth Bloggers owns Realty Income ($O) with good reasons.

How $O caught my attention?

Stock has come down from $71 high back in July 2016. I’ve own the stock before, I sold it for a little profit to fund some other buys. When I looked back, it has run up way high. So when the stock turning back down, I want to get back into the game. LOL 🙂

I bought 10 shares at $55.xx. That represent 21% lower than the 52-week high price. Dividend yield is 4.47%

But Captain Dividend, has a better story, he bought it way  low, then sold it at $70 to buy his house. Then got back into the game at $56.60. Talking about **PERFECT TIMING***.

Another thing I like about O is the monthly dividend distribution.

I don’t want to turn down the ever growing dividend increase either. Take a look.

I just want to note that the dividend increase didn’t stop during the recession.

I glance at yahoo financial website, it says Realty Income dividend payout is at 250%. But that’s not how you evaluate a REITs. You have to look at the FFO and the Dividend Distribution.

  • Realty Income generated funds from operations of $770m
  • Realty Income dividend was $638m in 2016

That translates to 82% dividend payout. This is the number that you should be concerning about.

How’s Realty Income business going? Where is it going to go? Is dividend going to be safe?

Here are some of the reasons.

  • The Reliability of the Tenant
  • Location! Location! Location!
  • Appropriateness for the Realty Income Portfolio
  • Macroeconomic Trends That Could Affect the Investment
  • The Deal: The Value At Which It Can Be Acquired

But don’t take my words for it. Take a look at their top 20 Tenants: I see the likes of Walmart, Regal theaters, Dollar Tree, etc.

Risks:

The interest rate environment may not favor REITs, but over time REITs does favor the over all market. I guess, interest rate correlate with economic growth. Growth come with more sales and more demand to rent from Realty Income.

In short term, the stock might pull back down under $50. If that is the case, I don’t mind owning a couple hundred shares. But right now, 10 shares is good exposure. As I continue to put my free capital to work.

Bloggers recently buying O:

Recent Buy O – Dividend Seedling – blogger $56.97

Captain Dividend: Recent Buy – Realty Income (O) $56.6

Recent Buy – Realty Income (O) – Dividend Diplomats @$59.84

Financial Free in 10 years @$55.35

Dividend Daze @56.19

In conclusion:

  • Realty Income (NYSE:O) Provides Rising Monthly Dividends AND Grows Your Principal.
  • The Company Actually Increased Dividends During the Great Recession.
  • Buy when the stock is on the pull back.

Full disclosure: I’m long Realty income (O).

Elsewhere in Europe  😛 Macron won the French election. But according to Madame Le Pen, France or Europe will be ran by woman, whether she won or not. (Citing Angela Markle, the Prime Minister of Germany is running the show in Germany, and Europe). LOL 🙂 Although, I don’t support Le Pen, but I thought it’s super funny.

What do you think about my buying Realty Income? What do you think about the turn of of the French election and the impact?

GA

5 Comments

  1. Nice buy! A bit preaching to the choir seeing as I also bought in a few days ago @ $55.35. Anyway, solid reasoning for your purchase . Thanks for sharing!

    • Great price for the entry point. I updated the post to add a link to your article.

      Cheers to many year of dividend to come.

  2. Thanks for the inclusion in your post. This was the perfect opportunity to make an entry point with the stock price being as low as it is. I picked up a modest 10 shares myself. Hope to increase this more over time if free capital is available. Love the compounding of those monthly dividends. Great buy!

  3. Welcome again to the Realty Income club. Realty Income is one of my favorite companies in my portfolio. Like Div Daze, I own a modest 10 shares, but consistently contribute to purchasing the stock on a monthly basis. I can’t wait to get to the point where I have enough dividends coming from Realty Income to purchase an additional share of the stock every month.

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