Based on the latest financial results and analysis, Realty Income (NYSE: O) is a high-yield REIT worth considering for investment. Despite a 10% decrease in stock price over the past year, the company reported a 33% increase in first-quarter revenue, driven by the acquisition of Spirit Realty. The REIT’s diversifying portfolio includes 80% of annual contracted rent in retail properties, with 15% now in industrial properties and 5% in gaming and other properties. Industrial properties showed strong same-store rental growth, while retail same-store rental growth was weaker due to movie theater closures. Realty Income’s AFFO per share climbed 5% to $1.03, and the company maintained its forecast for full-year AFFO per share between $4.13 to $4.21, while still planning to invest about $2 billion in new property investments and achieve a 1% increase in same-store rental income. With a solid 5.6% yield and a monthly dividend payout, the stock’s dividend looks very safe given its preference for less economically sensitive retailers and use of long-term triple net leases. While rising cap rates have negatively impacted the stock in the past few years, the Fed’s decision to hold interest rates constant may improve the property values within the REIT’s portfolio. The Motley Fool Stock Advisor service has identified 10 stocks that could potentially produce significant returns, but Realty Income wasn’t included on the list. Nonetheless, the REIT’s recent financial performance, coupled with its monthly dividend payout, makes it a promising investment opportunity.
Overall, the REIT’s growing AFFO per share and successful investment opportunities in the current environment, particularly in Europe, suggest that now is an ideal time to buy shares in Realty Income.
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