Realty Income, a retail Real Estate Investment Trust (REIT), acquires commercial properties and leases them out to generate rental income, which is then distributed to investors as dividends. By the end of the third quarter of 2024, Realty Income owned 15,457 properties across various locations. The REIT primarily leases properties to recession-resistant retailers like Dollar General, Walgreens, Dollar Tree, and 7-Eleven.
Despite challenges faced by some of its major tenants, Realty Income has maintained a high occupancy rate, never dropping below 96%. The company reports its profit growth through adjusted funds from operations (AFFO) per share, with consistent growth over the years. It expects its AFFO to continue growing in 2024, covering its annual dividend rate.
While Realty Income has shown strong performance over the years, its stock valuation remains relatively low due to elevated interest rates. However, if interest rates decline in the future, the stock could potentially see a significant increase in value. While it may not generate millionaire-making gains, Realty Income provides a solid long-term investment opportunity for income-oriented investors.
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