Realty Income Corporation (O): A Bull Case Theory

We came across a bullish thesis on Realty Income Corporation on Phaetrix Investing’s Substack by Phaetrix. In this article, we will summarize the bulls’ thesis on O. Realty Income Corporation's share was trading at $61.16 as of January 30th. O’s trailing and forward P/E were 58.33 and 37.04 respectively according to Yahoo Finance.

Realty Income (NYSE: O), an S&P 500 company, is real estate partner to the world's leading companies. O widely known as the “Monthly Dividend Company,” stands out as one of the most consistent income-generating vehicles in public markets, with a 55-year track record underscored by 664 consecutive monthly dividend payments. This unparalleled consistency has cemented its reputation among income-focused investors seeking reliability across market cycles.

The company’s current monthly dividend of $0.2695 per share equates to an annualized yield of roughly 5.5%, a compelling return that is further enhanced by monthly compounding, a rarity even within the REIT universe. Importantly, this payout is well supported, with an FFO payout ratio of approximately 76% and coverage of around 1.33x, providing room for continued dividend growth in the range of 4% annually without stretching the balance sheet.

Realty Income’s durability is rooted in its massive and diversified portfolio of over 15,000 properties, predominantly leased under long-term, triple-net contracts to tenants that tend to be resilient in economic downturns. These include drugstores, convenience stores, and discount retailers that generate stable foot traffic regardless of broader macro conditions. The result is a highly predictable stream of rental income that effectively turns the portfolio into a rent-powered dividend engine rather than a traditional cyclical real estate play.

While risks remain, particularly from higher interest rates that could increase refinancing costs and from tenant concentration within certain defensive retail categories, Realty Income’s scale, access to capital, and balance-sheet strength help mitigate these concerns. Taken together, the company offers a rare combination of yield, safety, and steady growth, making it one of the most dependable income-oriented equities available today.

Previously, we covered a bullish thesis on Realty Income Corporation (O) by Kroker Equity Research in January 2025, which highlighted the company’s disciplined net lease model, diversified portfolio, AFFO growth, and attractive valuation. O’s stock price has appreciated by approximately 14.51% since our coverage. Phaetrix shares a similar view but emphasizes dividend consistency and monthly compounding.

Realty Income Corporation is not on our list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 27 hedge fund portfolios held O at the end of the third quarter which was 27 in the previous quarter. While we acknowledge the potential of O as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.

READ NEXT: 30 Stocks That Should Double in 3 Years and 11 Hidden AI Stocks to Buy NOW 

Disclosure: None.