Why I Just Can't Stop Buying This 5.3%-Yielding Passive Income Powerhouse

I recently bought even more shares of Realty Income (NYSE: O). It's a continuation of my buying spree over the past few years.

Here are a couple of the reasons why I can't stop buying shares of this leading real estate investment trust (REIT).

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A passive income powerhouse

Realty Income stands out among dividend-paying stocks. The REIT pays a monthly dividend (most companies pay quarterly) that currently yields 5.3% (well above the S&P 500's 1.1%). The company has a stellar record of increasing its dividend. It has raised its dividend payment 133 times since its public market listing in 1994, including for the past 113 consecutive quarters. That's much more frequent than most other dividend stocks, which typically aim to raise their dividends about once a year.

The REIT's high-yielding dividend is on a rock-solid foundation. Realty Income generates extremely durable cash flows backed by a diversified portfolio of properties (retail, industrial, gaming, and others) secured by long-term net leases with many of the world's leading companies. It has experienced only one year in which it didn't grow its adjusted funds from operations (FFO) per share (2009). The REIT further supports its high-yielding payout with a low dividend payout ratio (less than 75% of its adjusted FFO) and a fortress-like balance sheet that boasts one of the ten highest credit ratings in the sector.

Built for continued growth

Realty Income's income stream is only part of the draw. The REIT also has an excellent growth track record. It has historically grown its adjusted FFO per share at a compound annual rate of more than 5%. That has enabled it to increase its high-yielding dividend at a 4.2% compound annual rate.

The company's strong financial position enables it to continue investing in income-generating real estate. The REIT spent about $6 billion on acquisitions and development projects last year.

Realty Income's increasing diversification has enhanced its ability to grow by opening the doors to massive new market opportunities. It has added several new property verticals over the years (including gaming and data centers), expanded into several new geographies (including Mexico this year), and launched new investment platforms (credit and private capital management). As a result, the REIT now has a total addressable market opportunity of more than $14 trillion.

The REIT also has a growing list of partners supporting its expansion. For example, it recently formed a strategic partnership with GIC. The partnership involves a more than $1.5 billion joint venture to invest in build-to-suit logistics properties, a $200 million investment in an industrial portfolio in Mexico, and an anchor investment in its first private capital fund.

I just can't get enough of this high-quality REIT

Realty Income pays a high-yielding monthly dividend that it routinely increases. The REIT backs its payout with a rock-solid financial profile, which allows it to steadily grow its portfolio and cash flow per share. This combination of growth and income should enable the REIT to produce attractive total returns in the coming years, which is why I just can't stop loading up on shares.

Matt DiLallo has positions in Realty Income. The Motley Fool has positions in and recommends Realty Income. The Motley Fool has a disclosure policy.