This Unstoppable 5.4%-Yielding Dividend Stock Is Making a Low-Risk Wager With a Big Payoff
Reality Income (NYSE: O) recently unveiled one of its largest investments in a single property. The REIT is investing $950 million in The Bellagio Las Vegas in a deal with Blackstone's non-traded REIT, Blackstone Real Estate Income Trust (BREIT). The two-part investment should generate a high return for the company.
Here's a look at the deal, which should support Realty Income's ability to continue increasing its monthly dividend, which at the current share price yields about 5.4%.
Realty Income is making a $950 million investment into a joint venture with Blackston's BREIT that will own a 95% interest in the real estate assets of The Bellagio Las Vegas. Casino operator MGM Resorts International will retain the remaining 5% stake in the property. The two-part investment will see Realty Income invest $300 million of common equity into the joint venture, giving it a 21.9% indirect interest in the property, with BREIT retaining a 73.1% interest. In addition, Reality Income will make a $650 million preferred equity investment in the joint venture. The deal values The Bellagio Las Vegas' real estate assets at $5.1 billion.
Source Fool.com
