Where Will Realty Income Stock Be in 1 Year?

In one year Realty Income (NYSE: O) will probably be in about the same place it is now, as a business. But it will likely be stronger for the effort.

And that will make the stock even more attractive for conservative dividend investors even if Wall Street pays no attention to what is going on under the hood.

Here's what you need to know about this giant net-lease real estate investment trust (REIT) today.

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What does Realty Income do?

Realty Income is what is known as a net-lease REIT. Essentially, it owns single-tenant properties for which the tenant is responsible for most property-level operating costs. Although any single property is high-risk, given there's only one tenant, across a large enough portfolio using the net-lease approach is actually rather low-risk. Realty Income is the largest net-lease REIT, with more than 15,600 properties and a market cap that is more than 3 times larger than its next closest peer.

In addition to being large, Realty Income is also fairly well diversified. It has assets in both the U.S. and European markets. And while roughly 70% of its rents come from retail properties, the remainder is spread across industrial assets and unique "other" properties, like vineyards and casinos. Moreover, it has 1,600 different tenants, so no single rent payer is too large.

The company is also starting to build out additional growth opportunities, including partnering to build data centers, offering debt financing, and creating an institutional-level money management business around net lease properties.

Realty Income has long been an industry leader, highlighted by its three-decade streak of annual dividend increases. Add in a lofty 5.6% dividend yield and even the most conservative income investors should find this real estate investment trust appealing. But the next year may not be the most exciting.

What's been going on with Realty Income's portfolio?

At the end of 2024 Realty Income owned 15,621 properties. That rose to 15,627 after the end of the first quarter in 2025. And then it dropped to 15,606 at the midyear mark of 2025. In fairness, when you are talking about a portfolio as big as the one Realty Income operates, the changes here aren't huge.

But the REIT largely grows by expanding the size of its portfolio, not shrinking it. And still, through the first six months of 2025 Realty Income disposed of 128 properties while only acquiring 89. There are 87 properties listed as "under development," so there's more complication to the math here than meets the eye. But the key takeaway is that Realty Income looks like it is focused on fine-tuning its portfolio right now.

At the start of 2025, CEO Sumit Roy specifically highlighted that management continues to "regularly assess our portfolio to identify and optimize growth opportunities." He also said, "Dispositions when strategically appropriate, not only enhance the quality of our portfolio, but unlock organic sources of capital, allowing us to reinvest in higher-quality assets to fuel long-term value growth." Dispositions have been a key part of Realty Income's 2025 plan.

That's not a bad thing, but it also isn't going to move the needle on the top or bottom line in a meaningful way. Wall Street likes big moves, not incremental improvement, so the stock is probably going to be a bit boring for the foreseeable future. But for a conservative, long-term focused dividend investor the story is a lot more exciting. Essentially, Realty Income is working to improve the foundation that supports its attractive dividend yield. A safer dividend yield is something risk averse-investors should probably cheer about.

Realty Income is a tortoise and that's OK

Realty Income's size allows it to act as an industry consolidator. So, every so often, it makes large, splashy deals. That, however, is not the norm for this REIT. It is, by design, a pretty boring dividend stock most of the time. And every so often remaining boring requires a little internal work on the portfolio, like what appears to be taking shape right now. That's not something to worry about. It is something to appreciate even if Wall Street doesn't give the company the kudos it deserves for doing this boring, internally focused work.

Reuben Gregg Brewer has positions in Realty Income. The Motley Fool has positions in and recommends Realty Income. The Motley Fool has a disclosure policy.