5 Reasons to Buy Realty Income Stock Like There’s No Tomorrow

Realty Income Corporation (NYSE: O), the “Monthly Dividend Company,” has built a reputation as a dividend powerhouse, with 130 consecutive quarterly increases since its 1994 NYSE listing. Yet, its recent Q1 2025 results underscore why investors should consider buying its stock aggressively now. Here are five compelling reasons, backed by data, to justify this stance.

1. Unmatched Dividend Discipline and Growth

Realty Income’s 75-year history of monthly dividends and 30-year streak of annual increases place it among the S&P 500 Dividend Aristocrats. In Q1 2025, it announced its 110th consecutive quarterly dividend increase, raising the payout to $0.796 per share monthly—a 3.4% year-over-year rise. This translates to an annualized dividend of $3.222 per share, yielding 5.3% at recent prices, far exceeding the S&P 500’s 1.8% average.

Crucially, the dividend is prudently covered by AFFO, with a payout ratio of 75.1%—well within Realty Income’s target range of 70-80%. With $4.22–$4.28 AFFO per share guidance for 2025, the dividend’s sustainability is clear.

2. Robust Financial Performance Amid Headwinds

Despite macroeconomic uncertainty, Realty Income delivered 9.1% revenue growth in Q1 2025 to $1.38 billion, while AFFO per share rose 2.9% year-over-year to $1.06. Portfolio occupancy remained 98.5%, a testament to its high-quality tenant base and long-weighted lease terms (9.1 years average remaining).

Even as U.S. occupancy dipped slightly to 97.6%, the company’s global diversification—80% of Q1 investments in Europe—buffered performance. European acquisitions, like UK retail parks at 7% yields, offer inflation-hedging opportunities while reducing reliance on a strained U.S. market.

3. Strategic Global Expansion and Capital Allocation

Realty Income’s $1.4 billion in Q1 investments, with $824.7 million allocated to Europe, highlight its pivot to high-yield, undervalued markets. European assets now account for ~30% of its portfolio, leveraging below-market rents and acquisition costs 40-50% below replacement value.

This shift aligns with its $4.0 billion 2025 investment target, funded by a $5.38 billion recast credit facility and a $632 million ATM equity raise. The result? A 5.4x net debt/EBITDA ratio, far below REIT averages, ensuring financial flexibility.

4. Fortress Balance Sheet and Liquidity

Realty Income’s liquidity stands at $2.9 billion, including $319 million in cash and a $2.5 billion undrawn credit facility. Its $600 million 2035 senior notes, issued at a 5.125% yield, locked in low borrowing costs. With only 6% of debt exposed to variable rates, it insulates itself from rising interest rates.

CEO Sumit Roy emphasized: “Our balance sheet is a competitive advantage.” This strength supports its ability to acquire assets at discounts during market dislocations, as seen in Q1’s European deals.

5. Portfolio Resilience Through Diversification

Realty Income’s 15,627 properties span 50 U.S. states, the UK, and six European countries, leased to 1,598 tenants across 91 industries. This diversification shields it from sector-specific risks. For instance, while theater leases lagged, industrial and healthcare properties thrived.

The rent recapture rate of 103.9% on re-leases—despite theater headwinds—demonstrates pricing power. Even with a projected 75 basis point rent loss in 2025 from legacy assets, its long-term leases and tenant mix ensure stability.

Conclusion: A Rare Blend of Safety and Growth

Realty Income combines dividend reliability, global growth, and financial strength in a volatile market. With a 5.3% yield, a 5.4x net debt/EBITDA ratio, and $2.9 billion liquidity, it offers a compelling risk-reward profile.

Investors should note that Realty Income’s stock has underperformed the S&P 500 by 10% YTD, creating a buying opportunity. Its 15-year average lease term and diversified portfolio mitigate occupancy risks, while its European pivot opens new growth avenues.

In a world of rising rates and economic uncertainty, Realty Income’s track record of turning volatility into value makes it a must-own stock for income seekers. The data is clear: this dividend titan is primed to outperform for decades to come.