Realty Income Boosts Dividend: Can It Preserve Investor Appeal?

Realty Income Corporation O, branded as “The Monthly Dividend Company,” announced another dividend boost, raising its monthly payout to 26.95 cents per share from 26.90 cents. While modest, it represents the REIT’s 132nd increase since its 1994 NYSE debut. Payable on Oct. 15 to holders on record as of Oct. 1, the hike equates to an annualized dividend of $3.234, yielding 5.44% on the Sept. 9 closing price of $59.49.

Amid macroeconomic uncertainty, a choppy job market and rate cut hopes, Realty Income’s reliable dividend stream continues to attract income-focused investors. A member of the S&P 500 Dividend Aristocrats index, the REIT boasts 30 years of consecutive monthly dividend payments and 112 straight quarterly increases, underscoring its resilience.

Realty Income’s stability stems from its 15,606-property global portfolio and emphasis on non-discretionary, service-based tenants. About 90% of rent is insulated from downturns and e-commerce risks. Additionally, diversification into gaming, industrial and data centers strengthens resilience while expanding long-term growth opportunities.

Moreover, Realty Income’s financial health — highlighted by $5.1 billion in liquidity with manageable debt maturities through 2026, investment-grade credit ratings of A3 / Stable from Moody’s and A- / Stable from S&P Global and a fixed-charge coverage ratio of 4.5 — supports dividend sustainability.

Challenges persist for Realty Income. Though lower rates could be a tailwind, AFFO growth could stay subdued due to economic uncertainty and tighter acquisition spreads. The REIT also anticipates 75 basis points of rent loss in 2025, partly from tenant credit risks linked to earlier M&A-driven portfolio additions.

VICI and ADC Also Stand Tall Among Net Lease REITs

VICI Properties Inc. VICI continues to shine in the triple net lease REIT space, announcing a 4% dividend hike to 45 cents per share, payable on Oct. 9 to holders on record as of Sept. 18, 2025. With 6.6% annual growth since 2018, VICI Properties surpasses many competitors in the triple-net REIT space. VICI Properties maintains a target payout of 75% of its AFFO, offering shareholders a stable and attractive income stream.

Agree Realty Corporation ADC maintains a strong dividend tradition. It recently declared a monthly cash dividend of 25.60 cents per share, payable on Oct. 14 to shareholders on record as of Sept. 30, 2025. Agree Realty has delivered 161 consecutive dividends, highlighting its consistency. With a 10-year CAGR of around 6%, Agree Realty mirrors peers like VICI Properties.

O’s Price Performance, Valuation and Estimates

Shares of Realty Income have risen 11.4% year to date against the industry’s decline of 5.2%.

From a valuation standpoint, O trades at a forward 12-month price-to-FFO of 13.64, below the industry. It carries a Value Score of D.

The Zacks Consensus Estimate for O’s 2025 and 2026 funds from operations per share has been revised marginally downward over the past 60 days.

At present, Realty Income carries a Zacks Rank #4 (Sell).

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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