Realty Income Hikes Dividend Again: Can It Sustain Its Market Edge?

Realty Income Corporation O, branded as “The Monthly Dividend Company,” has implemented another dividend increase, lifting its monthly payout to 27.00 cents per share from 26.95 cents. This marks the REIT’s 133rd dividend boost since its 1994 NYSE debut, underscoring its long-standing commitment to consistent shareholder returns. The revised payout, applicable to investors on record as of Dec. 31 and payable on Jan. 15, reflects an annualized dividend of $3.24 and a 5.68% yield based on the Dec. 9 closing price of $57.05.

With narratives hovering around a rate cut now, Realty Income’s dependable monthly dividend remains a strong draw for income-seeking investors. The REIT’s inclusion in the S&P 500 Dividend Aristocrats index, backed by more than 30 consecutive years of dividend growth and 113 uninterrupted quarterly hikes, highlights its resilience through varied market cycles.

Much of this stability is rooted in the company’s expansive global portfolio of 15,542 properties, net lease structure and strategic focus on tenants operating in service-based, non-discretionary and value-oriented sectors. As of Sept. 30, 2025, around 91% of annualized retail base rent originated from such tenants, helping insulate financial performance from recessionary trends and e-commerce disruption. Its expanding European footprint and growing exposure to gaming, industrial and data center assets further broaden long-term growth levers.

Financial strength also supports dividend sustainability, with $3.5 billion in liquidity, investment-grade ratings and a fixed-charge coverage ratio of 4.6, reinforcing balance sheet flexibility. Still, management’s projected 75 basis points of credit loss in 2025, mainly tied to tenants from earlier acquisitions, signals that even well-diversified REITs may encounter isolated pockets of pressure.

Dividend Appeal of Other Net Lease REITs

VICI Properties VICI continues to shine in the triple net lease REIT space with 6.6% annual dividend growth since 2018. 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 a diversified portfolio underpin VICI Properties’ long-term dividend sustainability. In September, VICI Properties announced a 4% quarterly dividend hike to 45 cents per share and retained the same rate in its latest dividend announcement.

Agree Realty Corporation ADC mirrors this consistency, with 165 consecutive dividends paid and a 10-year CAGR of around 6%. Its 75% AFFO payout ratio reinforces reliable income, positioning Agree Realty alongside VICI Properties and other top net lease REITs in dividend stability. In October, Agree Realty declared a monthly cash dividend of 26.2 cents per share, representing a 2.3% month-over-month increase. The company retains the same monthly dividend subsequently.

O’s Price Performance, Valuation and Estimates

Shares of Realty Income have risen 6.8% year to date against the industry’s decline of 8.7%.

From a valuation standpoint, O trades at a forward 12-month price-to-FFO of 12.93, below the industry but close to its one-year median of 13.12. It carries a Value Score of D.

While the Zacks Consensus Estimate for O’s 2025 FFO per share has been revised southward, the same for 2026 has been tweaked northward 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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