So, you bought into the Realty Income (NYSE: O) stock a decade ago, and you’re wondering just how much you’re collecting in dividends now. Let’s take a look.
First, remember that Realty Income is a real estate investment trust (REIT), so it’s required to pay out at least 90% of its income as dividends. (REITs typically own lots of properties, leasing them out to tenants.) It sports a significant dividend yield — 5.35%, as of March 25.
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Interestingly, while most dividend-paying stocks pay quarterly, Realty Income pays its shareholders monthly. Its most recent payment is $0.2705 per share, to be paid on April 15.
Now, let’s get to the math. If you bought 100 shares in 2016, would you still have 100 shares today? Not quite, because the company executed a stock split in 2021 — and an unusual one, at that — giving shareholders 1,032 shares for every 1,000 shares they own. If you owned 100 shares, presumably you’d have ended up with around 103 shares post-split. So, multiply 103 shares by the per-share dividend of $0.2705 for April, and you’ll arrive at a monthly dividend payment of $27.86. The run rate for the year is about $334.
The shares closed near $57 on April 1, 2016, so if you’d bought then, you’d have spent around $5,700 for your shares. If you’re collecting $334 annually from a $5,700 investment, you’ve got an effective dividend yield of 5.86%. It’s higher than the current 5.35% yield because that’s what those buying the stock today would be getting.
Should you invest in the stock today? Well, maybe. The stock offers fairly reliable income, as it has paid nearly 670 consecutive monthly dividends and has increased its dividend 134 times since it was listed on the New York Stock Exchange in 1994.
Its business model features triple-net leases, which have tenants paying for real estate taxes, property insurance, and operating expenses in exchange for modest rent increases.
Give Realty Income — or other promising dividend payers — some consideration.
Before you buy stock in Realty Income, consider this:
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