Morningstar Rating
Stock XNYS Rating as of
$53.92 +0.38(0.71%)
View Full ChartAs of Delayed Price Pre-Open:$54.20 +0.20
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Company Report
Company Report
Following Two Years of Rising Interest Rates, We Believe REITs Are Trading at Significant Discounts
Kevin Brown
We believe that there are several attractive opportunities across the US REIT sector for investors to consider. Following the recovery of many REIT sector fundamentals from the pandemic by mid-2021, we viewed the REIT sector as fairly valued through early 2022. However, the past two years have seen the rapid rise in interest rates and a slowing economy, which has led to major valuation declines across the sector. Our analysis of the REIT sector over the past 25 years suggests that the relative stock performance of REITs is negatively correlated with interest rate movements. The second and third quarters of 2023 saw large interest rate increases with the 10-year Treasury approaching 5%, which led to the sector underperforming. This occurred even as many REITs reported same-store net operating income, or NOI, growth at historical highs in 2022 due to high inflation. Higher interest rates, lower liquidity, tighter capital market conditions, and decelerating same-store NOI growth all led to a significant correction in the stock price for many REITs.
O is trading at a 29% discount.
Price
$53.92
Fair Value
$83.00
Uncertainty
Low
- 1-Star Price
- $52.00
- 5-Star Price
- $23.40
- Economic Moat
- Jdnz
- Capital Allocation
- Hgnsnflcr
Bulls Say, Bears Say
Bulls Say, Bears Say
Bulls
Realty Income provides a reliable, albeit slow-growing, monthly dividend built on a steadily performing underlying portfolio through various market conditions.
Bears
It will take an increasingly greater volume of attractive risk-adjusted acquisitions to create meaningful shareholder value growth, possibly pushing Realty Income to take more risk as competition expands for its traditionally targeted assets.
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News
News
- 646th Consecutive Common Stock Monthly Dividend Declared by Realty Income
- REALTY INCOME ANNOUNCES FIRST QUARTER 2024 EARNINGS RELEASE DATE
- 124th Common Stock Monthly Dividend Increase Declared by Realty Income
- Realty Income Announces Operating Results for the Three Months and Year Ended December 31, 2023
- Realty Income Announces Appointment of Jeff A. Jacobson to Board of Directors and Retirement of Board Member Ronald L. Merriman
- 644th Consecutive Common Stock Monthly Dividend and Preferred Stock Quarterly Dividend Declared by Realty Income
- Realty Income Announces €527 Million Inaugural Pan-European Sale and Leaseback With Decathlon, One of the World's Leading Sports Brands
- Spirit Realty's stock rallies on $9 billion buyout by Realty Income Corp.
Trading Information
Trading Information
- Previous Close Price
- $53.54
- Day Range
$53.34–54.54
- 52-Week Range
$45.04–64.18
- Bid/Ask
- $54.15/$54.21
- Market Cap
- $46.43 Bil
- Volume/Avg
- 10,778/6.1 Mil
Key Statistics
Key Statistics
- Price/Earnings (Normalized)
- 39.18
- Price/Sales
- 9.16
- Dividend Yield (Trailing)
- 5.70%
- Dividend Yield (Forward)
- 5.72%
- Total Yield
- 5.70%
Company Profile
Company Profile
Realty Income owns roughly 13,400 properties, most of which are freestanding, single-tenant, triple-net-leased retail properties. Its properties are located in 49 states and Puerto Rico and are leased to 250 tenants from 47 industries. Recent acquisitions have added industrial, gaming, office, manufacturing, and distribution properties, which make up roughly 17% of revenue.
- Sector
- Real Estate
- Industry
- REIT - Retail
- Stock Style Box
- Mid Core
- Total Number of Employees
- 418
- Website
- https://www.realtyincome.com
Competitors
Competitors
- Regency Centers Corp REG
- Federal Realty Investment Trust FRT
- Kimco Realty Corp KIM
Valuation
Valuation
| Metric | O | REG | FRT |
|---|---|---|---|
Price/Earnings (Normalized) | 39.18 | 28.78 | 39.56 |
Price/Book Value | 1.23 | 1.60 | 3.08 |
Price/Sales | 9.16 | 7.88 | 7.49 |
Price/Cash Flow | 13.42 | 14.15 | 15.33 |
Price/Earnings
O
REG
FRT
Financial Strength
Financial Strength
| Metric | O | REG | FRT |
|---|---|---|---|
Quick Ratio | 1.49 | 0.59 | 1.55 |
Current Ratio | 1.53 | 0.64 | 1.55 |
Interest Coverage | 2.10 | 3.37 | 2.45 |
Quick Ratio
O
REG
FRT
Profitability
Profitability
| Metric | O | REG | FRT |
|---|---|---|---|
Return on Assets (Normalized) | 2.07% | 3.33% | 3.11% |
Return on Equity (Normalized) | 3.61% | 6.00% | 9.35% |
Return on Invested Capital (Normalized) | 3.47% | 4.71% | 4.99% |
Return on Assets
O
REG
FRT
See how this stock stacks up to its competitors with Morningstar Investor
REIT - Retail Industry Comparables
REIT - Retail Industry Comparables
| Ticker | Name | Morningstar Rating for Stocks | Capital Allocation | Economic Moat | Market Cap |
|---|---|---|---|---|---|
| SPG | Simon Property Group Inc | Pzxybvwzqv | Pdx | $45.7 Bil | |
| KIM | Kimco Realty Corp | Xkvnhgldc | Jdn | $12.5 Bil | |
| UNBLF | Unibail-Rodamco-Westfield Act. SIIC ET STES FONC.EUROP. | — | Mxwjkv | $11.6 Bil | |
| UNIRF | Unibail-Rodamco-Westfield ADR | — | Rrnkbd | $11.6 Bil | |
| LKREF | Link Real Estate Investment Trust | — | Xjrm | $11.0 Bil | |
| REG | Regency Centers Corp | Pkxhqtfzh | Dbhh | $10.9 Bil | |
| STGPF | Scentre Group | — | Wkb | $10.5 Bil | |
| FRT | Federal Realty Investment Trust | Bfqltvmps | Vtd | $8.6 Bil | |
| MAC | Macerich Co | Hgjsksmt | Vzvm | $2.9 Bil |
