Is Realty Income a Buy?
Realty Income (NYSE: O) is a real estate investment trust (REIT) that has long been a favorite on Wall Street. There's good reason for that, but it means that stock is usually pretty expensive. That said, COVID-19 has upended things for REITs and the income investors that love them. Realty Income wasn't immune to the hit. But is it still a buy after rallying 30% from its recent lows?
With a portfolio of roughly 6,500 properties, Realty Income is one of the largest net-lease real estate investment trusts around. "Net lease" means that the company's lessees are responsible for paying most of the operating costs of the properties they occupy. That leaves Realty Income to basically sit back and collect rent. Meanwhile, the average lease term for the REIT's portfolio is nine years. That means economic weak patches, like the one facing the United States today, usually aren't too big a deal since they are unlikely to outlive the leases.
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Source Fool.com
