Subject
- #Realty Income
- #Stock Analysis
- #Dividend Stocks
- #Real Estate Investment
Hello, Ogame Satisfaction, Stock Information.
Today, following the last time, we will analyze Realty Income.
Company Analysis
Sales Analysis
<span class="image-inline ck-widget" contenteditable="false"><img src="https://blog.kakaocdn.net/dn/RnDdy/btru5q2AHb6/CnpfK52K4KSgBQIKVkY4DK/img.png" srcset="https://img1.daumcdn.net/thumb/R1280x0/?scode=mtistory2&fname=https%3A%2F%2Fblog.kakaocdn.net%2Fdn%2FRnDdy%2Fbtru5q2AHb6%2FCnpfK52K4KSgBQIKVkY4DK%2Fimg.png" sizes="100vw" style="aspect-ratio:1432/1080;" width="1432" height="1080"></span>Source: Realty Income 2021 Q4 Report
In 2020 and 2021, retail activities were restricted due to COVID-19.
However, Realty Income's revenue increased from $1,647 million in 2020 to $2,080 million,
achieving a remarkable 26% increase in revenue.
Net income decreased by about 10% from $395 million to $359 million.
However, if you look closely, you can see that the 2021 figures include $167 million in M&A (Mergers and Acquisitions) expenses.
It seems that 2021 was reflected in the short term due to investment activities.
We need to check the subsequent performance reports, but it seems that the M&A effect will further improve the revenue growth effect.
Debt Analysis
Not only Realty Income, but also REIT stocks that operate real estate, have very important debt management capabilities.
This is because they distribute more than 90% of their earnings as dividends, so they have little cash on hand, and interest expenses from debt become a major burden.
In this regard, it will be necessary to carefully examine Realty Income's debt management capabilities.
<span class="image-inline ck-widget" contenteditable="false"><img src="https://blog.kakaocdn.net/dn/wDGVp/btru2n6G3rC/ERZNMN9KUgy3WD2PX6Jrx0/img.png" srcset="https://img1.daumcdn.net/thumb/R1280x0/?scode=mtistory2&fname=https%3A%2F%2Fblog.kakaocdn.net%2Fdn%2FwDGVp%2Fbtru2n6G3rC%2FERZNMN9KUgy3WD2PX6Jrx0%2Fimg.png" sizes="100vw" style="aspect-ratio:1438/1075;" width="1438" height="1075"></span>Source: Realty Income 2021 Q4 Report
Realty Income's current debt is $15,258 million.
However, more than 80% of the debt is operated as bonds, and the average interest rate on the bonds is 3.27%, which is a stable level.
Also, the average maturity of the debt is 6.4 years, so it does not seem likely that there will be any liquidity problems in the short term.
Furthermore, 89.8% of the debt is fixed-rate loans, demonstrating stable asset management.
Current Stock Price Analysis
PER
49.45
PBR
1.57
Competitor PER
68.02 (PLD)
Competitor PBR
3.31 (PLD)
Realty Income's PER, which represents the price-to-earnings ratio, is 49.45 times.
The PBR, which represents the price-to-book ratio, is 1.57, and since the post-merger performance has not yet been reported,
it will be necessary to check it again later.
Realty Income, the King of Dividend Growth Stocks
<span class="image-inline ck-widget" contenteditable="false"><img src="https://blog.kakaocdn.net/dn/bVdF4d/btruWkbU1vd/YB2wxpwfkzz6KiKBqoovR1/img.png" srcset="https://img1.daumcdn.net/thumb/R1280x0/?scode=mtistory2&fname=https%3A%2F%2Fblog.kakaocdn.net%2Fdn%2FbVdF4d%2FbtruWkbU1vd%2FYB2wxpwfkzz6KiKBqoovR1%2Fimg.png" sizes="100vw" style="aspect-ratio:2499/1426;" width="2499" height="1426"></span>Current value if you invest $100 in Realty Income, Source: Realty Income Website
Category
2019
2020
2021
Dividend Yield
3.7
4.5
4.1
Dividend
2.730
2.814
2.958
Monthly Dividend
0.2275
0.2345
0.2465
Realty Income's average annual stock price increase since 1994 has been a whopping 15.5%.
And it has increased dividends for 27 consecutive years, with an average dividend growth rate of 4.4%.
It can be called the king of dividend growth stocks.
However, REIT stocks have less volatility than common stocks, and it takes a long time to recover after a decline.
Also, past performance is not a guarantee of future performance.
Furthermore, in cases like now where interest rate hikes are expected, the profitability of REIT stocks can also weaken.
In fact, after the subprime mortgage crisis, the returns of REIT stocks plummeted.
The performance of REIT stocks depends on how well they manage their debt.
Realty Income has been earning about 4% of the interest rate spread as profit in its asset management.
However, since interest rate hikes are expected due to rising prices after the COVID-19 crisis,
it will be necessary to carefully monitor their crisis response capabilities during this period.
2021 must have been a special year for Realty Income.
It was a year when they created a new growth engine through M&A. They didn't stop acquiring assets either.
However, in order to maintain higher growth, it will be necessary to see how they achieve results in their global expansion.
Nevertheless, Realty Income is a very attractive stock.
Despite the COVID-19 pandemic, the company has paid monthly dividends for 619 consecutive months since its founding,
and has increased dividends 114 times.
This is probably because they are confident in their real estate operations.
So far, we have looked at Realty Income, the representative dividend growth stock.
Summary
A stock that gives you the feeling of receiving a monthly allowance.
I have analyzed Realty Income's company information and analyzed it based on my own perspective, so please consider this material as a reference only.
The responsibility for actual stock purchases, etc., lies with the investor.
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