Where Will Realty Income Be in 1 Year?
Real estate investment trust (REIT) Realty Income (NYSE: O) is one of the largest and most successful players in the net lease space. It is, without a doubt, a bellwether name that dividend investors should be watching, even if they don't own it. Right now, it is doing some pretty good things, but this is really not a great time for investors to jump aboard. That may sound odd, but here's why Realty Income is so great, what the next year likely holds, and why you'll want to wait before adding this reliable dividend payer to your portfolio.
Realty Income owns a portfolio of roughly 6,000 net lease properties. That means that the REIT's tenants are responsible for most of the operating expenses of the properties it owns. It is a fairly low-risk model, in which Realty Income makes the difference between its cost of capital and the rents it charges. Moreover, it tends to favor long leases, with Realty's average remaining lease term at roughly nine years. That provides stability to its income stream.
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Source Fool.com
