Can Realty Income Hold On to Its Dividend Strength & Global Growth?

Realty Income O, the “Monthly Dividend Company,” continues to captivate income-focused investors with a 5.47% yield and a reputation for dependable payouts. Its second-quarter 2025 results reinforce the REIT’s consistency, supported by a diversified portfolio spanning retail, industrial and international properties.

The company’s track record is impressive: more than 30 years of consecutive dividend growth, 112 straight quarterly increases and 663 monthly distributions to date. This retail REIT has witnessed compound annual dividend growth rate of around 4.2% since 1994. Such consistency offers stability to investors, especially during market volatility, and underscores Realty Income’s commitment to sustainable dividends. Check Realty Income’s dividend history here.

Durable cash flows stem from its net lease model, with tenants covering most property expenses. The 15,600+ properties across the United States, the U.K. and Europe are leased to 1,630 clients in 91 industries, with 73% of rents coming from non-discretionary or service-oriented tenants. Occupancy at 98.6% and rent recapture rates above 100% highlight strong tenant demand.

Realty Income’s disciplined capital allocation supports dividend durability. By recycling assets, targeting higher-yielding opportunities and maintaining $5.1 billion in liquidity with A3/A- credit ratings, the REIT strengthens cash generation and financial flexibility. Its second-quarter 2025 deployments of $1.2 billion at a 7.2% yield, with a 15.2-year average lease term — 76% in Europe — drive incremental growth. With strong visibility to its pipeline, the company raised 2025 investment guidance to $5 billion, reinforcing its ability to sustain and gradually expand dividends, along with portfolio expansion.

Dividend Strength Among Comparable Net Lease REITs

VICI Properties VICI stands out in the triple-net lease REIT sector with 6.6% annual dividend growth since 2018, outperforming peers like Agree Realty and Realty Income. Its yield is supported by premium gaming and hospitality assets, and a 75% AFFO payout target provides a stable income stream. A strong balance sheet and diversified portfolio underpin VICI Properties’ long-term dividend sustainability.

Agree Realty Corporation ADC mirrors this consistency, with 161 consecutive dividends and a 10-year CAGR of ~6%. Its 75% AFFO payout ratio reinforces reliable income, positioning Agree Realty alongside VICI Properties and other top net lease REITs in dividend stability.

O’s Price Performance, Valuation and Estimates

Shares of Realty Income have risen 10.6% year to date against the industry’s decline of 5%.

From a valuation standpoint, O trades at a forward 12-month price-to-FFO of 13.53, 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 #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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