Realty Income's Q2 Earnings Reinforce its Reputation as a Top-Tier Dividend Stock

Realty Income reported Q2 adjusted FFO of $947.5 million, or $1.05 per share, up from $921.1 million in the same period last year. The REIT generated nearly $1.2 billion in same-store rental revenues and invested $1.2 billion in new properties at a 7.2% weighted average cash yield. Realty Income raised its 2025 guidance, expecting adjusted FFO to be between $4.24 and $4.28 per share, a roughly 2% increase from last year's level.

Realty Income Corporation (O) reported its second-quarter 2025 adjusted funds from operations (AFFO) per share of $1.05, which slightly missed the Zacks Consensus Estimate of $1.06. Despite the marginal miss, the company demonstrated year-over-year growth in its top line, with total revenues reaching $1.41 billion, surpassing the Zacks Consensus Estimate by 1.04% [2].

Same-store rental revenues increased by 1.1% to $1.17 billion, while the company's portfolio occupancy rate stood at 98.6% as of June 30, 2025. Realty Income achieved a rent recapture rate of 103.4% on re-leased properties. However, interest expenses rose by 14.9% year over year to $283.8 million, impacting the overall results to some extent [1].

The company invested $1.17 billion in 102 properties and properties under development or expansion, while selling 73 properties for net sales proceeds of $116.8 million and a gain on the sale of real estate of $38.6 million. Realty Income exited the second quarter with $5.1 billion in liquidity, including $800.4 million in cash and cash equivalents, $422.8 million in unsettled At-The-Market forward equity, and $3.9 billion in availability under its unsecured revolving credit facility. The company's net debt to annualized pro-forma adjusted EBITDA ratio was 5.5X [1].

Realty Income revised its 2025 AFFO per share guidance to a range of $4.24-$4.28, a roughly 2% increase from last year's level of $4.22-$4.28. The Zacks Consensus Estimate is pegged at $4.27, which falls within the company's guided range. The company expects same-store rent growth of approximately 1% and occupancy levels above 98% for the full year. Realty Income also increased its full-year investment volume to approximately $5 billion compared to the prior guidance of $4 billion [1].

Realty Income currently carries a Zacks Rank #3 (Hold), indicating that the stock is expected to perform in line with the market in the near future. The company's shares have added about 7.1% since the beginning of the year, mirroring the S&P 500's gain of 7.1% [2].

References:
[1] https://finance.yahoo.com/news/realty-income-q2-affo-falls-152200305.html
[2] https://www.nasdaq.com/articles/realty-income-corp-o-misses-q2-ffo-estimates