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Summarized by durumis AI
- Realty Income is a large REIT company listed on the S&P 500, characterized by its monthly dividend payments.
- Realty Income generates stable profits through real estate rental and operation, and operates 98.5% of its assets without vacancy.
- Realty Income was focused on the U.S. market, but is now seeking global growth through its entry into the UK and Spanish markets.
Hello, this is Ogam's Ogam Satisfaction.
Today, I will introduce you to famous dividend stocks in the US stock market.
Realty Income (Ticker: O), famous for REIT stocks listed on the New York Stock Exchange, is the main character.
Let's find out what Realty Income is and what it does.
Company Overview
Company Name
Realty Income
Ticker
O (US Stock)
Date of Establishment
1969
Business Overview
REIT, real estate leasing and operation
Company Website
Market Capitalization
USD 39.086 billion (about 47 trillion won)
Current Price
USD 66.10 (about 79,831 won)
Monthly Dividend
USD 0.245
Source: Realty Income Homepage
REIT Company in S&P 500
Realty Income (Ticker: O) is a US company and a REIT company included in the S&P 500.
It is also one of the top 10 largest REIT companies in the world.
The biggest feature of this company is that it pays dividends every month.
US listed companies are very concerned about shareholder rights, and Realty Income is no exception.
Within the US system, real estate leasing companies (REITs) must distribute more than 90% of their taxable income as dividends to reduce corporate taxes,
so most REIT companies have high dividend yields.
However, Realty Income has become a more attractive REIT company by giving investors a carrot in the form of monthly dividends.
What is a REIT company?
Source: Self-made, Mircanvas
Let's take a moment to learn about REIT companies.
I think some of you may find it a foreign word.
A REIT company is a company that leases, operates, and sells real estate for profit using investor funds, and manages assets.
Simply put, think of a REIT company as a landlord.
And you who invest in that REIT company are the bank that lends money to the landlord,
and you can think of it as getting a part of the rental income as interest.
Investors don't have to worry about vacant rooms, taxes, or other ancillary tasks required for building management,
and REIT companies can raise funds from investors, so it's a win-win situation.
Business Information of Realty Income
So, let's put the REIT company information aside and introduce you to Realty Income.
Source: Realty Income Homepage (Portfolio)
As introduced earlier, Realty Income, which plays the role of a landlord, had 11,136 assets as of the end of 2021.
The number of assets, which was 6,592 in 2020, increased to 11,136 after the Corona outbreak.
This seems to include assets that have increased since the acquisition of VEREIT in 2021.
What's even more surprising is that there are only 164 vacancies.
It is operating 98.5% of its assets without vacancies, which confirms the company's management capabilities.
Source: Realty Income Investor Presentation
In terms of real estate operations, it can be affected by the business cycle depending on who my tenant is.
To counter this, Realty Income has diversified its asset allocation,
attracted high-quality tenants to increase the stability of real estate operations.
Realty Income's asset allocation is heavily weighted towards retail.
It is also a retail REIT, but considering the vast land and population density in the United States,
it seems reasonable that more retail is needed for profit and safety.
Asset Acquisition, Competing on Quality Rather Than Quantity
Source: Realty Income Investor Presentation
This is a recent asset acquisition from Realty Income's investor presentation.
Realty Income is a company that focuses not only on increasing the number of assets,
but also on how to acquire valuable assets.
Realty Income's asset management features can be broadly divided into long-term contracts and net lease contracts.
Long-term contracts enable stable real estate operations,
and net lease contracts minimize expenses to reduce risk.
In particular, the contract feature of Realty Income is that the tenant pays all expenses, including taxes, insurance, and management fees.
This is called the Triple N contract.
※ Net lease contract: The tenant pays part of the operating expenses
This seems to be the secret to Realty Income's continued growth.
Global Expansion is a Challenge
Source: Realty Income Investor Presentation
Realty Income's assets were limited to the United States, which was a drawback.
This is because the company's earnings are heavily influenced by the US economy and
asset allocation is limited to US industries.
That's why Realty Income is trying to find growth opportunities abroad.
It has started real estate leasing in the UK and Spain,
and its performance in the UK has reached 8% of total sales.
It seems that its future course will determine the growth of Realty Income.
Today, we learned about Realty Income's business information.
Next time, we will have a time to analyze the dividend information and
corporate analysis of Realty Income.
↓↓ Continue to Realty Income Part 2
