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Dividends

Why I’m continuing to add more Realty Income

Realty Income (O) is one of those monthly dividend paying stocks that’s almost impossible to overlook.

The majority of companies publicly traded lost value over recent months, largely down to the COVID-19 outbreak. 2020 has been considered by many to be a write-off, but that couldn’t be further from the truth when it comes to certain stocks. Realty Income is one of these, and here’s why I’m continuing to add more to my portfolio.

Realty Income is a real estate investment trust (REIT for short). It’s not particularly exciting. The company raises money, spends it on buying up real estate, and generates revenue from long-term leases. It’s a sound business model, however, which is why it has been able to pay out a dividend for 27 consecutive years. That’s 27 full years without fail.

Realty Income continues to pay dividends even amidst a financial crisis.

It’s even more impressive when you consider that’s not only through the COVID-19 outbreak but also the 2008 financial crash. But even with upwards of 20% taken off its value, Realty Income remains to be quite the expensive pick, especially if you’re just starting out with an empty portfolio to populate.

Source: Simply Wall St

The thing is … I love Realty Income for exactly that. It’s a little pricey for a REIT, but you’re effectively guaranteed a monthly cheque. A great positive from receiving a monthly dividend is that it’s a frequent injection that can be used alongside money deposits to quickly bolster your portfolio.

Should a stock price drop at a later date that I like the look of, I can quickly use the monthly payment from Realty Income, alongside anything I can inject to take full advantage. And Realty Income is a reliable source, simply down to the business model. Net leases with an average term of 9 years. It’s a well-run REIT that doesn’t really offer amazing value, but is a must-have for dividend investors like myself.

By Rich Edmonds

Rich creates content for the top Windows-focused publication, but by night he tries to make his money work for him and rambles far too much here.

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