Thursday, December 5, 2013

Recent Buy - Realty Income Corp (O)

I initiated a new position in Realty Income Corp (O). Realty is a REIT that invests in commercial real estate across the US. Realty Income Corp has long term leases with tenants that are spread across 200 companies and 47 industries. The Company has over 38,000 free-standing properties, typically under triple net leases (tenants pay taxes, maintenance and insurance).  The Company boasts a 98% occupancy rate with major tenants including FedEx, Walgreens, Family Dollar, LA Fitness, AMC Theatres and Diageo.

Corporate Profile (from Google Finance):

Realty Income Corporation (Realty Income) is an equity real estate investment trust (REIT). The Company is engaged in acquiring and owning freestanding retail and other properties that generate rental revenue under long-term lease agreements (primarily 10 to 20 years). The Company has in-house acquisition, leasing, legal, credit research, real estate research, portfolio management and capital markets. At December 31, 2011, it owned a diversified portfolio of 2,634 properties with an occupancy rate of 96.7%, or 2,547 properties leased and only 87 properties available for lease. It leased properties to 136 different retail and other commercial enterprises doing business in 38 separate industries. It properties are located in 49 states, with over 27.3 million square feet of leasable space, and with an average leasable space per property of approximately 10,400 square feet. In January 2013, it acquired American Realty Capital Trust.


Recent Buy Decision

Realty Income Corp has a track record of having paid 520 consecutive monthly dividends, 73 dividend increases and 64 consecutive quarterly increases. Realty Income has manageable debt, with a debt/equity ratio of 1.03, and more importantly, all of its debt is fixed-rate. So its interest payments will not be affected by rising interest rates unless new debt is undertaken by the company.

The stock hit its 52-week low today and I initiated my position in O with 30 shares, providing me with $5.40 in monthly dividends and $64.80 in annual dividends. I missed the ex-div date for December, so my first dividend payout will be in January 2014.

A summary of the stock:
  • Symbol: NYSE: O
  • Quote: $36.87
  • 52-week Range: $36.75 - $55-48
  • Yield: 5.92%
  • 5-yr Dividend Growth Rate: 5.26%
  • P/FFO: 16.5

My full list of holdings can be found here.


7 comments:

  1. I really like O here and would gladly add some more but it's about to make up a larger portion of my portfolio with a put option getting executed later this month. Got to love management that prides itself on being "The Monthly Dividend Company". Good news for shareholders.

    ReplyDelete
    Replies
    1. PIP,
      The 52-week low made it an easy decision. The fundamentals looks good for me. I will be looking to add a bit more to this position in the future.

      Thanks for visiting and commenting.

      Delete
  2. I think its a great buy right now. Good pick up!

    ReplyDelete
  3. O has been on a downward spriral lately and offers an excellent buying opportunity! Good move there!

    ReplyDelete
    Replies
    1. Moneycone,
      Ive had my eye on it for a while and I started with a 30 share position. I will look into adding more to it in the future

      thanks for stopping by
      R2R

      Delete
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