Valued at a market cap of $54 billion, Realty Income Corporation (O) is a real estate investment trust (REIT) that primarily invests in freestanding, single-tenant commercial properties under long-term net lease agreements. The San Diego, California-based company’s portfolio spans across the U.S. and parts of Europe, covering retail, industrial, and other commercial sectors.
Companies worth $10 billion or more are typically classified as “large-cap stocks,” and Realty Income fits the label perfectly, with its market cap exceeding this threshold, underscoring its size, influence, and dominance within the REIT - retail industry. The company’s strength lies in its highly diversified portfolio, which provides consistent rental income and stability. It is known as “The Monthly Dividend Company,” with a proven track record of paying dependable monthly dividends for decades.
This retail REIT is currently trading 8.9% below its 52-week high of $64.88, reached on Oct. 21, 2024. Shares of O have gained 5.5% over the past three months, underperforming the Dow Jones Industrial Average’s ($DOWI) 6.4% rise during the same time frame.
Moreover, in the longer term, O has declined 5.3% over the past 52 weeks, lagging behind DOWI's 12.8% uptick over the same time period. Nonetheless, on a YTD basis, shares of Realty Income are up 10.7%, outpacing DOWI’s 7% return.
To confirm its bullish trend, O has been trading above its 200-day and 50-day moving averages since early June, with slight fluctuations.
On Aug. 6, Realty Income delivered mixed Q2 earnings results, and its shares closed up marginally in the following trading session. While its AFFO per share of $1.05 declined slightly from the prior-year quarter and missed estimates, the company’s 5.3% year-over-year revenue growth to $1.4 billion exceeded analyst expectations. This revenue beat might have reassured investors, resulting in a modest increase in its share price despite the AFFO shortfall.
O has outpaced its rival, NNN REIT, Inc. (NNN), which declined 10.7% over the past 52 weeks and gained 5.3% on a YTD basis.
Given Realty Income’s recent underperformance, analysts remain cautious about its prospects. The stock has a consensus rating of "Hold” from the 23 analysts covering it, and the mean price target of $61.68 suggests a 4.4% premium to its current price levels.
