Realty Income Keeps Crashing: Buy, Hold, Or Sell? (O Stock)
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- čas přidán 10. 10. 2023
- Realty Income (O Stock), also known as "The Monthly Dividend Company", is one of the most popular REITs in the world. Recently, its share price has crashed and as a result, it now offers a high dividend yield. Is it a Buy, Hold, or Sell? We take a look at its latest results, discuss the latest news, and our concerns, and present our takeaway. 🎁You can access my entire REIT Portfolio by taking a 2-week free trial to my REIT newsletter, High Yield Landlord: seekingalpha.com/checkout?ser...
Realty Income (O REIT) is one of the most popular REITs for individual investors because it has a great track record. Realty Income is a net lease REIT that has grown its dividend for nearly 30 years in a row. But the "Monthly Dividend Company" has gotten very big. Is now the time to sell? Will inflation eat into its profits? Is it one of the best stocks to buy now? Will new property acquisitions allow it to keep hiking its dividend? Is O Stock a Sell? Is the realty income dividend sustainable? I answer these questions in this realty income stock analysis.
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Image sources: GMRE, CCI, VNA, NAREIT, YCHARTS, EPRA, Canva
Important Disclaimer: Leonberg Capital holds a position in O. This video is impersonal and does not provide individualized advice or recommendations for any specific person. Viewers/readers should not make any investment decision without conducting their own due diligence and consulting their financial advisor about their specific situation. This video is for entertainment purposes only and you are responsible for your own investment decisions. The information is obtained from sources believed to be reliable, but its accuracy cannot be guaranteed. The opinions expressed are those of the publisher and are subject to change without notice. This CZcams channel is managed by Leonberg Research OÜ, a subsidiary of Leonberg Capital OÜ.
#reits #dividend #passiveincome
Are you buying Realty Income now that it yields over 6%? Let me know in the comment section below.
Thank you for all your support! All your "likes" help me to grow the channel and I really appreciate it.
Jussi
it looks to me its a great opportunity..
Anything under 50 I keep DCA
@@pmoinhos I agree that it is getting compelling at these levels
@@pmoinhos I agree that it is getting compelling at these levels
@@duttysupra I am also a buyer below 50
Thank you for sharing
Hello. Thanks for your video. Question : The dividende can be dicrease ? Your advise please 😅
I expect it to keep on rising
The debt rating of O is also good. But adc and nnn are better buy, because of growth.
Hi Jussi, love your REIT videos. Just wondering ifnyou could make a video about PLAZA REIT (Canadian REIT). I hold a small position and was wondering what your takenon it is. It seems okay to me but I justbwant to make sure that I am not overlooking anything. Thank you kindly in advance
Thanks for your support! I will take a look. What's your thesis?
@askjussi I think their dividened is safe and they have fairly safe clients, but I think growth may stagnate for the time being. Their percentage payout is a bit lower which makes them safe, but has increased slightly. The last little bit. They have some debt up for renewal in the coming two years, but it's only a small portion that will be renewed. I am new to REITs, so I also don't know to evaluate them yet.
I agree@@Cumrocket69
I continue to buy one share of O per month (along with single shares of several other securities), but I will lump sum huge tranches if it reaches $45, $40, $35, etc.
Thanks for sharing your accumulation strategy!
Hi Jussi you mention WP carey and it's good rent increases, but if this is the case, why has their dividend growth been so poor over recent years, 1% a year iirc? Thanks!
It is because they have been exiting the asset management business, which was dilutive to earnings, but this is now mainly over.
Awesome
When there is blood on the street’s I definitely scoop up these shares!!!
Me too! What else are you buying?
I like all three. Thanks! @@Ai.Narrative
Growth maybe slowing, but the dividend is safe. Buying below $50 all day long!
Exactly. Yield rate is good. So over the long run pays off.
I agree that it is safe
Buying below $50! I love to hear it.
What do you think about MPW?
I like it but high risk high reward type situation
I agree, but i prefer Agree.
I also slightly prefer ADC
I dun think many got your point! Good analysis and insight🎉
Thanks!!
Good video! expended my position a little bit from 4 shares to 15 shares even tho i like agree realty more but for this price its a steal.
I agree that ADC is slightly more compelling for the long run if you focus on total returns
Thank you for the video. I did buy a little more this week & will continue if it stays around 50ish, I was reading that Rite Aide is in trouble & couldn't find any info on how many Rite Aide stores O may be leasing to. Any idea? If it's under 1% of their portfolio, it is less than 130 stores, I guess.
Thanks! I am not too concerned. It would likely be a debt restructuring. This does not mean that they would stop paying rent or leave these assets.
I’d rather have fewer rent hikes. Making rent affordable should be a target. There are far too many people who can’t afford to rent apartments. Inflation is too high. We need to make things more affordable. Having a stable dividend is far more important. Having places were families can afford to live is important. We need to stop seeing housing as an investment. We need to see a growing, healthy family living in s house as an investment.
Between EPRT and ADC, which REIT do you like better?
Tough choice. It really depends on what you are looking for. Income or growth?
Adc. Higher growth.
@@rnegoro1 I like it as well
Im buying and buying. I think size is an advantage. Better rates for loans/credits and still a lot of opportunities at the current market. And most important great balance sheet, each quarter equity goes up, low debt. Most of reits increased debt and / or lost equity.
Scale does not help past a certain point however. On the contrary it starts to hurt you. Have you looked at ADC? Similar but even lower debt
I think all things considered, O is still as great buy especially at this price and especially if buying with long term time horizon. The company is strong all the way around so a buy any where below the mid point of its 52 wk hi is a win.
I agree with you. Thanks for the addition. What else are you buying in the REIT space?
@askjussi right now just wanna increase position in O cuz my ira has 10k worth and my taxable only has $1k. I been on a reit education binge with Ralph blocks book and all of brad thomas stuff. Alot of good reits out here with some just specialized in a property sector and some diverse like O. I will be investing much more in reits soon and I already know nnlove the benefits of real estate property as a asset
Thanks for sharing@@DaGenius86
Hi. First of all, great video and good channel, I subscribed and loved watching your videos! About Realty Income: How much international assets they have compared to their assets in the USA? Are they focusing on growing internationally?
Yes they are focused on international growth but it still a fairly minor part of the portfolio. I don’t remember the exact % but it is in their last investor presentation
@@askjussiThank you so much for replying to me!
I'm buying O hand over fist at this price. I'm not looking for humongous growth but I'm keeping it for the dividend cash value.
It prides itself as THE MONTHLY DIVIDEND STOCK. It will do anything it can to keep that moniker.
It's one of my foundation stocks.
Thanks for sharing. What else are you buying? have you looked into NNN or ADC?
Total agree I’m finally at 87 Shares and will continue to add and reinvest the dividends
@@Nemo504Investing Thanks!
@@askjussi I'm currently pushing Coke, American Tower, Arcc, Hercules, Altria and 3 etfs (Divo, Jepi and Schd) as well as O.
My next new position most likely will be T Rowe Price but I have a lot on my plate right now. The BDC'S have been very good to me so I'd like to add Main.I'm buying pretty much whenever I see a red day on the above.
@@gordonculp3646 thanks! why not cci instead of amt?
Keeps crashing? Huh? Went from 48.5 to 51 the last week. Very informative.
Right but it is down quite a bit since our last video
Dude it went from $68 to $58 to $48 this year... what time frame are you looking at Oct. 1 to Oct. 7 or something??
That is why it is getting attractive @@pertainedorangeman3056
I've thought it was over valued for years, nice to see the market finally realized it. While it's more reasonable now, I still see too many better opportunities now in interest rates sensitive investments. The US retail scene is way too overbuilt already. O is a hard pass from me. Too many people are in love with monthly dividends which makes no sense to me. Even if you are living off mostly dividends, if you can't keep a 3 month budget, you should not be living on dividends. @Jussi, can you do a video on payout ratios? As a long term growth oriented investor, I would love much lower payout (less than 50%) and use more cash to invest in growth. What's your perspective?
"if you can't keep a 3-month budget, you should not be living on dividends" - amen. My exact thoughts since the first time I read comments saying that it's important to people :)
@@FxAndrej I've heard all sorts of good stuff. My father in law thinks that a $20 stock is a better investment than a $200 stock. Earnings don't matter, only the price of the stock.
I agree that it is a tough since all REITs are so heavily discounted
@@stevelewis7501 Maybe I'm the exception but I like the monthly payouts way more than quarterly not because of having to budget but because I'm reinvesting with DRIP. The payouts are compounding my money 12x a year instead of 4x which helps to build up more shares faster. Once I'm using my portfolio to live off of and not reinvesting then it won't really matter as much.
Why would you stop buying more O ?
Because other REITs may be even more opportunistic
@@askjussi Ok keep O and by the other REITs offering opportunities.
Excellent video thanks
$O vs $NNN update?
About equally as much. But NNN enjoys faster growth prospects
your words @askjussi 6 months ago
I am really not concerned about recession or the banking crisis when it comes to Realty Income. These are net leases with nearly 10 years on them. Their cash flow grew even through the pandemic, which was the worst possible crisis for them. And they have an A-rated balance sheet. My concerns relate more to their future growth... in one word, disaster
Me neither. a recession would be good for O as it would likely lead to lower rates
🤘
Thanks for the video. Wouldn't it also be beneficial to have the price hovering around $50/share since that'll be the price you're reinvest (monthly) for more shares if DRIP is on? Comparing to if price went back up again and now reinvestment of additional shares are at a higher cost.
Yes I hope it stays low for a while
$64000 Question is will the dividend be cut.
No it will not
Thanks, Jussi, for your take on Realty Income. I always enjoy hearing or reading your perspective on various REITs (even if I don't always agree with you).
I remain long Realty Income.
Thanks! What do you think about EPRT?
@@askjussi-I am not familiar with EPRT, but will take a look at it. Thanks!
If Vici drop under 29$ im diving in
I like VICI a lot too. We have interviewed the CEO on this channel in the past
@@askjussi Yeah a really well structured interview. I urge everyone to go watch it, even if you have no interest in Vici its very educational
Thank you for another great video, Jussi! You mentioned that it is a strong buy for conservative, income investors and that you are adding to your position in your retirement portfolio. How about the growth portfolio? For investors with a slightly longer timeline (10 years until retirement) would you favor ADC over O?
I favor other names like ADC, VICI, and EPRT for growth investors. Feel free to join us for a 2-week free trial to access all our Top Picks: seekingalpha.com/checkout?service_id=mp_1268
I keep buying. 6% dividend on a 13000 property reit sounds like a good plan to me
Thanks for sharing!
You're a beacon of hope! 🌟 _ "Self_assuredness and conquering self_doubt pave the way to success."
I don't believe the "crash" is big enough, given the future prospects of it. What happened is that it no longer has a premium valuation.
Looking at FFO to compare it with other REITs isn't fair, as you've mentioned. The growth is lower than its peers. Given that, I'd argue that now O similarly priced than its peers, there's no margin of safety.
Given that future prospects aren't that good with the max 1% rent increase, it being too big, buying whole portfolios of real state and not to forget, dilution... I still believe it's a very suboptimal investment.
Agree 100%
On the flip side, it is also safer than most peers and that has value. So it would say that it is fairly priced relative to peers, but the whole sector is discounted
@@askjussi agreed, "priced fairly" is a good description of O at the moment.
I think the whole sector is in the correct price it should be, given the current economic issues and yields in my opinion.
With rates at 5%+, it becomes unattractive to invest in a REIT that pays even 6%. I expect prices to go down further for most REITs, as they have lots of debt and the cost of servicing that debt will go up a lot.
I still keep my REITs, but I don't believe they'll fare as good as they did with those high interest rates, I expect a bigger shakeup in the industry before I feel confident on investing on it again
Just bought 1500$ worth more 😁
Thanks for sharing! And nice glasses! 😁
@@askjussi thanks Jussi!
@@Joseph-ke3xc 👌
Nice! Monthly cash flow.
Just picked up another 20 shares of O today, I can personally see a 10% upside in the next 6 months and at a 6% current yield it's a great deal IMO.
Thanks for sharing. What else are you buying?
@askjussi only other stocks I have picked up in the last couple days have been KO and PEP, however i'm going to keep a close eye of agree realty as i certainly think they have some good upside still.
@@chrisgeorgiou1516 Thanks!
Everyone is fearful. This is an incredible buying opportunity.
I agree! @@allanrobinson9786
I have 50 shares of O and I think its the most youtubed stock in the history of mankind.
Clearly you don't follow $TSLA
@@stevelewis7501 you make a good point.
O is my biggest REIT holding and I’ll probably add some this month. I like the steady monthly income
Thanks for sharing. Have you looked at ADC? Also pays monthly dividends
I've come to realize that money is a tool. I’ve worked so hard over the years to realize that if you don’t make money work for you, you can’t experience true freedom. I’m glad I found that out although it was later in life, but that marked the turning point in my finances.
You are absolutely right ,firstly I believe money in the bank is not money because it is bond to inflation and losses values overtime
You have to be well disciplined to achieve success and save before you spend
Lastly success does not happen overnight it takes time,dedication and self discipline
money is a liability, not an asset. You have to exchange it for assets that represent real VALUE. Real estate - properties for rent. Stocks (dividends). Bonds (interest), funds, REITs (interest), intellectual property, The aid of an institutional or basic financial advisor's cannot be over expressed, have been in touch with 'Martha Cornell Kerns, over the years before taking any financial decisions and it's been working perfect for me because i don't have to send her my money to manage but taking her advise.
I only save money for emergencies, like having an emergency fund. I'm aware that it loses value over time and doesn't make me anything, but it's there as a financial insurance, to cover my ass if ever I get into some trouble from life.
@@Edgardo477 great info if i don't have to send her my money. I feel like this next bullrun will be the millennials last hope for financial freedom. because this next bullrun will literally determine if I work until I'm 70 or not. I hope I can build a big enough portfolio for it to matter.
@@AnielaGorska her honest approach gives me complete ownership and control of my positions, and her rates are incredibly affordable given my ROI. You're right, the best time to buy in the market is when there's fear. A huge part of my growth has also come during this bear market. This year alone, I have scaled from 112k to over 354k
You can’t have it both ways lol you are complaining that it’s getting too big to move the needle. But you are complaining that they are stepping out of their area of expertise 🤷♂️
Yes that is a problem of the large size. It leads to more problems as they lose their focus
@@askjussi it’s at a very attractive price and yield now. But I already have a ton. I won’t add more now
I’m buying $O for Dividend I don’t think a cut will come anytime soon, it wouldn’t be called the monthly Dividend company for nothing I can’t wait until I’m at over 100 Shares.
I agree that the dividend is likely to keep growing from here.
I’m buying O
5% was my buy signal and now that it’s 6% I’m buying even more
It’s going down because of interest rates and rates won’t stay high forever
I agree that it has gotten too cheap. Thanks!
Haters gonna hate. O will be fine.
I agree that it will be fine, but it is not perfect
@@askjussi true it’s not perfect. But it’s a hell lot safer then most stocks or other Reits out there. If I wanted anymore safer I’d just go all in on VOO. As long as we diversify we should be able to weather a storm.
Stag
I like it as well. What’s your thesis?
I started a new small position in O in my IRA cost of $49.38. Wouldn’t normally buy it since I’m so far from retirement but saw very little downside so using it as a hedge+thinking price will appreciate in the next few years. Hope it doesn’t turn into another Alibaba for me lol.
The risk-to-reward of these REITs are very compelling even for younger investors in my opinion
It won't be a discount to its peers for much longer. Its peers will be declining commensurate.
What makes you think that? They are growing faster than O
@@askjussi I may be missing your point. I'm seeing virtually all reits tanking even FRT and DEA which I expected would do better since they are gov't. related.
Yes all REITs are down. But I don't see why its peers would underperform O. @@roseymalino9855
@@askjussi To re-frame my perspective; I think all reits are headed way down. To stay afloat, some will sell off some (many) prime holdings to the private market thereby reducing future revenue.
@@roseymalino9855 They won’t. Debt is low and maturities are high even as rents are growing
That was a great insight about WPC having inflation adjusted rate hikes! That is a con for O but it's still at a great value currently and is at a historically good buying point based on the 10 and 5 year standard deviation (a statical analysis tool). I made a short on my channel covering my take on the current state of O based on particular metrics.
Thank you!
Thank you for sharing
Let me know if I can help with anything else
@@askjussi ok will do