Key Points
Realty Income is a real estate investment trust (REIT), owning many properties and leasing them out.
It's a longtime dividend payer -- and increaser.
What's better than a healthy, growing company that pays you a dividend every quarter? How about a healthy and growing company that pays you a dividend every month?
Meet Realty Income (NYSE: O). It's one of the relatively few monthly dividend payers, and its dividend yield is a fat 5.9% (as of Oct. 22).
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Better still, its payout has been growing over time. Its last payment, on Oct. 15, was for $0.2715 per share. (That might not seem like much, but trust me -- it adds up quickly.) And that's up from $0.2480 in 2022 and $0.2120 in 2017. The company has actually hiked its payout for more than 30 consecutive years and has made 116 consecutive monthly increases.
Image source: The Motley Fool.
So what if you invest, say, $30,000 in Realty Income? What will you receive each month? And each year? Let's see.
First, Realty Income was trading at $57 per share (as of Oct. 22). So your $30,000 would buy you 526 shares. Multiply the number of your shares, 526, by the latest monthly dividend payment of $0.2715 per share, and you'll get $142.81. That's your monthly dividend amount.
If the payout stays at that level, you'll get 12 times that over the course of a year -- for a total of about $1,714. (See? That puny-looking dividend amount can amount to meaningful sums.)
So should you invest in Realty Income? Well, certainly consider it. Know that Realty Income is a real estate investment trust (REIT) -- a company that owns a lot of real estate and leases it to tenants. It employs "triple net leases," which require tenants to cover real estate taxes, property insurance, and operating expenses, and it's the largest triple net REIT in the U.S.
Realty Income's portfolio is vast, encompassing more than 15,500 properties leased with long-term contracts, to around 1,800 clients. The company's overall occupancy level for its properties was recently 98.8% -- and it has never been below 96%. That kind of stability can help you sleep at night.
Selena Maranjian has positions in Realty Income. The Motley Fool has positions in and recommends Realty Income. The Motley Fool has a disclosure policy.