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Stock Strategist

Is Realty Income's Dividend Safe?

In light of increasingly tight cash-flow coverage, we re-examine Realty Income.


Few companies have a dividend history as solid as  Realty Income's (O). Its primary corporate objective is to pay a regular, monthly shareholder dividend. Realty Income has certainly lived up to its self-proclaimed moniker as The Monthly Dividend Company�--it's paid a dividend every month for 40 years and increased its payout every quarter for nearly 13 years and counting.

We've been convinced that Realty Income's dividends--including the regular, quarterly dividend increases--have been safe throughout the commercial real estate downturn, and we've been proven right so far. Its quality underwriting, long-term leases, superior portfolio management, and low leverage supported the company, even as conditions in the economy deteriorated, its own operating metrics faltered, and other publicly traded real estate investment trusts slashed their own dividends or replaced cash dividends with stock.

Todd Lukasik does not own (actual or beneficial) shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.