Realty Income's Dividend Rises Again: Is the Hike Sustainable?

Realty Income Corporation O, widely known as “The Monthly Dividend Company,” has raised its monthly dividend once again — this time to 26.90 cents per share from 26.85 cents. Though marginal, the increase marks its 131st hike since its 1994 NYSE listing. Payable on July 15 to shareholders of record as of July 1, this results in an annualized dividend of $3.228 and a yield of 5.63% based on the June 10 share price of $57.35.

In an environment fraught with tariff uncertainty, fiscal concerns and volatile markets, 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 consecutive years of dividend growth and 111 straight quarterly increases, underscoring its resilience.

This consistency is anchored by a globally diversified portfolio of 15,627 properties and a focus on non-discretionary and service-oriented tenants, which generate about 91% of rent. Its financial health — highlighted by $2.9 billion in liquidity, investment-grade credit ratings and a fixed-charge coverage ratio of 4.7 — supports dividend sustainability.

However, challenges persist. Elevated interest rates and tariff pressures could affect tenant performance and weigh on Realty Income’s valuation. While its diversification into gaming, industrial and data centers broadens growth prospects, elevated treasury yields may dampen REIT demand. Overall, Realty Income’s latest hike reaffirms its dependability.

VICI and ADC Also Stand Tall Among Net Lease REITs

VICI Properties Inc. VICI stands out among triple net lease REITs for its impressive dividend performance, boasting a 7.4% annual dividend growth rate since 2018, surpassing peers like Agree Realty Corporation and Realty Income. VICI Properties maintains a target payout of 75% of its AFFO, offering shareholders a stable and attractive income stream. Backed by a strong financial foundation and diversified portfolio, VICI Properties’ dividend distribution is expected to be sustainable over the long run.

Agree Realty Corporation ADC also upholds a strong dividend tradition. It recently announced a monthly cash dividend of 25.60 per share, payable on July 15, 2025, to shareholders of record as of June 30, 2025. Agree Realty has delivered 159 consecutive common dividends, underlining its commitment to consistent payouts. With a 10-year CAGR of approximately 6% in dividends and a prudent 75% AFFO payout ratio, Agree Realty continues to mirror the steady performance seen in VICI Properties and other top-tier REITs.

O’s Price Performance, Valuation and Estimates

Shares of Realty Income have risen more than 7% year to date against the industry’s decline of 4.4%.

From a valuation standpoint, O trades at a forward 12-month price-to-FFO of 13.21, below the industry. It carries a Value Score of D.

The Zacks Consensus Estimate for O’s earnings has been revised marginally upward 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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