Skip to Content

Realty Income Corp O

Morningstar Rating
$52.92 −0.72 (1.34%)
View Full Chart
Unlock our analysis with Morningstar Investor

Company Report

Most REITs in the US Are Trading at Significant Discounts to Fair Value

The US REIT sector remains significantly undervalued, in our perspective. While the pandemic hurt REIT valuations in 2020, the recovery of fundamentals across most sectors combined with low interest rates led to strong total returns in 2021 and early 2022. However, despite fundamentals continuing to perform well over the past two years, with many REITs reaching historical levels of net operating income growth, the sector has underperformed the broader equity markets over the past two years. We believe that the cause has been the sector’s negative correlation with interest rates as income-oriented investors rotate out of the sector, higher rates lower the value REITs can create with external growth, and property valuations fall in line with higher rates. However, we don’t believe that higher rates significantly change our fair value estimates for the sector. Additionally, interest rates are down from the October 2023 highs, and REIT share prices have generally inversely followed the movements of the US 10-year Treasury.

Price vs Fair Value

O is trading at a 535% premium.
Price
$53.64
Fair Value
$88.00
Uncertainty
Low
1-Star Price
$52.00
5-Star Price
$92.10
Economic Moat
Vftf
Capital Allocation
Cqlngrtkk

Bulls Say, Bears Say

Bulls

Realty Income provides a reliable, albeit slow-growing, monthly dividend built on a steadily performing underlying portfolio through various market conditions.

Bears

It will take an increasingly greater volume of attractive risk-adjusted acquisitions to create meaningful shareholder value growth, possibly pushing Realty Income to take more risk as competition expands for its traditionally targeted assets.

Is it the right time to buy, sell, or hold?
Start a free trial of Morningstar Investor to unlock exclusive ratings and continuous analyst coverage to help you decide if O is a good fit for your portfolio.

News

Trading Information

Previous Close Price
$53.64
Day Range
$52.7453.73
52-Week Range
$45.0464.18
Bid/Ask
$52.93 / $52.96
Market Cap
$46.08 Bil
Volume/Avg
5.6 Mil / 5.6 Mil

Key Statistics

Price/Earnings (Normalized)
38.98
Price/Sales
8.99
Dividend Yield (Trailing)
5.74%
Dividend Yield (Forward)
5.88%
Total Yield
5.74%

Company Profile

Realty Income owns roughly 13,400 properties, most of which are freestanding, single-tenant, triple-net-leased retail properties. Its properties are located in 49 states and Puerto Rico and are leased to 250 tenants from 47 industries. Recent acquisitions have added industrial, gaming, office, manufacturing, and distribution properties, which make up roughly 17% of revenue.
Sector
Real Estate
Industry
REIT - Retail
Stock Style Box
Mid Core
Total Number of Employees
418

Competitors

Valuation

Metric
O
KIM
FRT
Price/Earnings (Normalized)
38.9840.3937.82
Price/Book Value
1.201.213.04
Price/Sales
8.996.557.18
Price/Cash Flow
13.5314.0914.80
Price/Earnings
O
KIM
FRT

Financial Strength

Metric
O
KIM
FRT
Quick Ratio
1.491.801.01
Current Ratio
1.551.821.01
Interest Coverage
1.962.472.40
Quick Ratio
O
KIM
FRT

Profitability

Metric
O
KIM
FRT
Return on Assets (Normalized)
1.94%2.26%3.13%
Return on Equity (Normalized)
3.39%4.23%9.43%
Return on Invested Capital (Normalized)
3.39%3.48%5.04%
Return on Assets
O
KIM
FRT
See how this stock stacks up to its competitors with Morningstar Investor

REIT - Retail Industry Comparables

1-Day Chart
Name
Price
Morningstar Rating for Stocks
Capital Allocation
Economic Moat
Market Cap
Simon Property Group Inc
SPG
DypmftkqbrYgdp$49.0 Bil
Kimco Realty Corp
KIM
ZzcbfwdSbkxk$12.9 Bil
Regency Centers Corp
REG
PbhpxjzzMkrl$11.5 Bil
Scentre Group
STGPF
Zmyz$11.2 Bil
Unibail-Rodamco-Westfield Act. SIIC ET STES FONC.EUROP.
UNBLF
Bmg$11.1 Bil
Link Real Estate Investment Trust
LKREF
Jrr$10.4 Bil
CapitaLand Integrated Commercial Trust
CPAMF
Hzknnk$9.8 Bil
Federal Realty Investment Trust
FRT
NkfhwcvfThfj$8.4 Bil
Macerich Co
MAC
WznllccvSvhf$3.2 Bil

Sponsor Center