Realty Income pays dividends monthly, which is much more often than most dividend payers.
It has built a solid business, owning properties and leasing them out.
Anyone interested in dividend income needs to know about Realty Income (NYSE: O). It pays its dividends monthly, which can be especially nice if you're living off those dividends and would like them to arrive more often. Also, its dividend yield is generous -- recently 5.3%.
Let's say you're looking to invest $30,000 to generate dividend income. How many shares would you need to buy? Well, the stock recently traded at about $61 per share, so $30,000 would buy about 492 shares. With each share recently delivering $0.271 per month, those 484 shares would generate around $133 per month. On an annual basis, that's about $1,596. Not bad, right?
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Before you rush off to place a buy order for some shares, take some time to learn more about the company, to make sure you're confident enough about its financial health and growth prospects to devote some of your hard-earned dollars to it.
For starters, know that Realty Income is a real estate investment trust (REIT) -- a kind of company that owns many real estate properties and leases them out to tenants. Realty Income uses "triple-net leases," which means the tenants are responsible for paying real estate taxes, property insurance, and operating expenses.
The company's portfolio is rather large, featuring more than 15,500 properties leased under long-term contracts -- to around 1,800 clients. It's focused on retail, industrial, and agricultural clients and encompasses 90-plus industries. Top industries include grocery stores, convenience stores, home improvement stores, and dollar stores. (Clearly, there's a big retail focus.)
Even more impressive is that the company's overall occupancy level for its properties was recently 98.8% -- and it has never been below 96%. That reflects stability and encourages a rather dependable dividend.
The stock isn't likely to be a fast grower, but it is likely to keep generating income for you. And it's expanding in some directions that might boost its growth -- like data centers -- while inking partnerships that will deliver more capital to invest in additional properties.
Before you buy stock in Realty Income, consider this:
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Selena Maranjian has positions in Realty Income. The Motley Fool has positions in and recommends Realty Income. The Motley Fool has a disclosure policy.