Monthly Payouts and Expanding Portfolio: Can Realty Income Deliver?

Realty Income O, widely recognized as the “Monthly Dividend Company,” continues to be a standout choice for income-oriented investors, delivering an appealing dividend yield of about 5.4%. Its second-quarter 2025 results reaffirmed the REIT’s reputation as one of the most reliable dividend payers, underpinned by a diversified portfolio spanning retail, industrial and international assets.

The company’s exceptional track record — more than 30 years of consecutive dividend growth, 111 straight quarterly increases and 662 monthly distributions — remains a key attraction, particularly in volatile markets where dependable income streams are highly valued by investors seeking stability.

Realty Income’s net lease structure provides durable cash flows since tenants shoulder most property expenses. Its portfolio spans 15,600+ properties across all 50 U.S. states, the U.K. and seven other countries in Europe, leased to 1,630 clients in 91 industries, with around 90% of rent derived from non-discretionary, low-price-point or service-oriented tenants. This sectoral and geographic spread helps mitigate concentration risk and provides a firm foundation for sustaining dividend growth. Check Realty Income’s dividend history here.

Operational performance remains robust, with occupancy at 98.6% and rent recapture rates exceeding 100%, highlighting strong tenant demand. A weighted average remaining lease term of approximately nine years support cash flow visibility. Backed by an investment-grade balance sheet, prudent leverage and disciplined financial management, Realty Income is well-positioned to uphold its dividend commitments.

Management’s capital allocation strategy enhances dividend durability. By recycling assets, pursuing higher-yielding opportunities and maintaining strong liquidity, the company continues to strengthen cash generation. Credit ratings of A3/A- and $5.1 billion in liquidity reinforce financial flexibility. Its $1.2 billion second-quarter deployment at a 7.2% initial cash yield, backed by a 15.2-year average lease term — 76% of which was in Europe — adds incremental growth and reinforces its ability to sustain and gradually expand dividends. However, challenges persist. Macroeconomic headwinds and slower transaction markets remain challenges.

Dividend Appeal of Other Net Lease REITs

VICI Properties VICI distinguishes itself within the triple net lease REIT space through its strong dividend track record, delivering a 7.4% annual dividend growth rate since 2018, outpacing peers such as Agree Realty and Realty Income. Its dividend yield is anchored by premium gaming and hospitality assets. VICI Properties maintains a target payout of 75% of its AFFO, offering shareholders a stable and attractive income stream. Supported by a solid balance sheet and a well-diversified portfolio, VICI’s dividend distribution appears well-positioned for long-term sustainability.

Agree Realty Corporation ADC maintains a strong track record of rewarding shareholders through dividends. The company recently declared a monthly cash dividend of 25.6 cents per share, payable on Sept. 15, 2025, to shareholders of record as of Aug. 29, 2025. With 161 consecutive common dividends, ADC demonstrates consistency and reliability. Over the past decade, it has achieved a dividend CAGR of roughly 6%, supported by a conservative 75% AFFO payout ratio. This disciplined approach allows ADC to deliver dependable income, placing it alongside VICI Properties and other leading net lease REITs in dividend stability.

O’s Price Performance, Valuation and Estimates

Shares of Realty Income have risen more than 11% year to date against the industry’s decline of 6.3%.

From a valuation standpoint, O trades at a forward 12-month price-to-FFO of 13.75, below the industry. It carries a Value Score of D.

The Zacks Consensus Estimate for O’s earnings has been revised marginally downward over the past 30 days.

At present, Realty Income carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Note: Anything related to earnings presented in this write-up represents funds from operations (FFO) — a widely used metric to gauge the performance of REITs.

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This article originally published on Zacks Investment Research (zacks.com).

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