[US Stocks] Monthly Allowance When Buying Stocks? Realty Income Company Information and Analysis (1/2)

Hello, this is OGameManjok from OGame.
Today, I will introduce a famous dividend stock in the US stock market.
Among the companies listed on the New York Stock Exchange, Realty Income (Ticker: O), a famous REIT stock, is the protagonist.
Let's find out what kind of company Realty Income is and what it does.

Company Overview

Company Name

Realty Income

Ticker Symbol

O (US Stock)

Establishment Date

1969

Business

REIT, Real Estate Leasing and Management

Company Website

https://www.realtyincome.com/

Market Capitalization

USD 390.86 billion (approx. 47 trillion KRW)

Current Price

USD 66.10 (approx. 79,831 KRW)

Monthly Dividend

USD 0.245

<img src="https://blog.kakaocdn.net/dn/cqkYE2/btruXTSb1tc/fFEqIUKYooUmJ1lfmX0Ko1/img.png" srcset="https://img1.daumcdn.net/thumb/R1280x0/?scode=mtistory2&fname=https%3A%2F%2Fblog.kakaocdn.net%2Fdn%2FcqkYE2%2FbtruXTSb1tc%2FfFEqIUKYooUmJ1lfmX0Ko1%2Fimg.png" sizes="100vw" style="aspect-ratio:532/141;" width="532" height="141">Source: Realty Income Website

S&P 500 REIT Company

Realty Income (Ticker: O) is a US-based company and is a REIT company that is part of the S&P 500.

Also, it is a large company that ranks among the top 10 in terms of size among REIT companies worldwide.

**The biggest feature of this company is that it pays dividends every month.**

US listed companies are very mindful of shareholder rights, and Realty Income is no exception.

Within the US system, Real Estate Investment Trusts (REITs) must distribute more than 90% of their taxable income as dividends to reduce corporate taxes, so most REITs have high dividend yields.

However, Realty Income has become a more attractive REIT company by providing investors with the carrot of monthly dividends.

That's how Realty Income became so attractive for investors.

What is a REIT?

<img src="https://blog.kakaocdn.net/dn/DBjFh/btru3MRF1Xt/0Shm6mkAtzmTJ6uglFp2Ok/img.png" srcset="https://img1.daumcdn.net/thumb/R1280x0/?scode=mtistory2&fname=https%3A%2F%2Fblog.kakaocdn.net%2Fdn%2FDBjFh%2Fbtru3MRF1Xt%2F0Shm6mkAtzmTJ6uglFp2Ok%2Fimg.png" sizes="100vw" style="aspect-ratio:600/338;" width="600" height="338">Source: Self-made, MiriCanvas

Let's take a moment to learn about REITs here.

I think some of you might find this term unfamiliar.

A REIT is a company that leases, operates, and sells real estate using investor funds, and also manages assets to generate profits.

**Simply put, a REIT company is like a building owner.**

And those of you who invest in that REIT are like a bank that lends money to the building owner,

and you can think of it as receiving a portion of the rental income as interest.

Investors don't have to worry about vacancies, taxes, and other ancillary tasks related to building management,

and REIT companies can raise funds through investors, making it a win-win situation.

Realty Income's Business Information

Now that we've covered REIT companies, let's get into the introduction of Realty Income.

<img src="https://blog.kakaocdn.net/dn/yqxec/btruQqXiLGE/ne5U3kGGMyshXcK64ax1v0/img.png" srcset="https://img1.daumcdn.net/thumb/R1280x0/?scode=mtistory2&fname=https%3A%2F%2Fblog.kakaocdn.net%2Fdn%2Fyqxec%2FbtruQqXiLGE%2Fne5U3kGGMyshXcK64ax1v0%2Fimg.png" sizes="100vw" style="aspect-ratio:2320/778;" width="2320" height="778">Source: Realty Income Website (Portfolio)

As introduced earlier, Realty Income, which plays the role of a building owner, 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 pandemic.

It seems that the increase in assets also includes the acquisition of VEREIT in 2021.

Furthermore, what is even more surprising is that there are only 164 vacant properties.

**The fact that 98.5% of the assets are being operated without vacancy shows the company's management capabilities.**

<img src="https://blog.kakaocdn.net/dn/vgvH4/btruXTksiAB/0kgUWNnCzYBJ2cvYnvWXV0/img.png" srcset="https://img1.daumcdn.net/thumb/R1280x0/?scode=mtistory2&fname=https%3A%2F%2Fblog.kakaocdn.net%2Fdn%2FvgvH4%2FbtruXTksiAB%2F0kgUWNnCzYBJ2cvYnvWXV0%2Fimg.png" sizes="100vw" style="aspect-ratio:1789/992;" width="1789" height="992">Source: Realty Income Investor Presentation

In the case of real estate operation, the economic cycle can affect the business depending on who your tenants are.

To prepare for this, Realty Income has diversified its asset allocation,

**and has increased the stability of its real estate operations by attracting high-quality tenants.**

Realty Income's asset allocation is heavily weighted towards retail.

Although it is also a specialized retail REIT, considering the vast land and population density of the United States,

it seems that a large amount of retail is a valid reason for profitability and safety.

Asset Acquisition: Quality over Quantity

<img src="https://blog.kakaocdn.net/dn/ctvS2t/btru1bLvpuH/kI8Z4LKdkF4Epko4ntljQk/img.png" srcset="https://img1.daumcdn.net/thumb/R1280x0/?scode=mtistory2&fname=https%3A%2F%2Fblog.kakaocdn.net%2Fdn%2FctvS2t%2Fbtru1bLvpuH%2FkI8Z4LKdkF4Epko4ntljQk%2Fimg.png" sizes="100vw" style="aspect-ratio:1920/1081;" width="1920" height="1081"><img src="https://blog.kakaocdn.net/dn/bcqQEj/btruYTYS0Rl/8qrEODKD1LmxLqxTQa1BY0/img.png" srcset="https://img1.daumcdn.net/thumb/R1280x0/?scode=mtistory2&fname=https%3A%2F%2Fblog.kakaocdn.net%2Fdn%2FbcqQEj%2FbtruYTYS0Rl%2F8qrEODKD1LmxLqxTQa1BY0%2Fimg.png" sizes="100vw" style="aspect-ratio:1918/1081;" width="1918" height="1081">Source: Realty Income Investor Presentation

This is the content related to recent asset acquisitions from Realty Income's investor presentation.

Realty Income not only increases the number of assets,

but it is also a company that focuses on how valuable the assets it acquires are.

The characteristics of Realty Income's asset management can be broadly seen as long-term contracts and net lease contracts.

Long-term contracts ensure stable real estate operations,

and net lease contracts minimize expenses to reduce risk.

In particular, the contract characteristic of Realty Income is that the tenant pays all expenses, including taxes, insurance, and maintenance fees,

which is called a Triple Net (NNN) Lease.

※ Net Lease: Tenant pays a portion of operating expenses.

**This seems to be the secret to Realty Income's continued growth.**

Global Expansion: A Challenge

<img src="https://blog.kakaocdn.net/dn/IxGme/btru2mF4RGg/cicwuBTNfrgM7gQZZErQTK/img.png" srcset="https://img1.daumcdn.net/thumb/R1280x0/?scode=mtistory2&fname=https%3A%2F%2Fblog.kakaocdn.net%2Fdn%2FIxGme%2Fbtru2mF4RGg%2FcicwuBTNfrgM7gQZZErQTK%2Fimg.png" sizes="100vw" style="aspect-ratio:1919/1081;" width="1919" height="1081">Source: Realty Income Investor Presentation

One drawback was that Realty Income's assets were limited to the United States.

This is because the company's earnings are significantly impacted by the US economy,

and asset allocation is also limited to US industries.

Therefore, Realty Income is striving to find growth opportunities overseas.

It has started real estate leasing in the UK and Spain,

and the UK business has achieved 8% of total revenue.

**It seems that its future actions will determine the growth of Realty Income.**

Today, we learned about Realty Income's business information.

Next time, we will have a session on Realty Income's dividend information

and a company analysis.

**↓↓ Continue to Realty Income Part 2**

[Finance/Overseas Stocks] - [Overseas Stocks] Get Monthly Allowance When Buying Stocks? Realty Income Company Information and Analysis (2/2)