On the 12 January 2018, Realty Income Corporation (NYSE:O) will be paying shareholders an upcoming dividend amount of $0.21 per share. However, investors must have bought the company’s stock before 29 December 2017 in order to qualify for the payment. That means you have only 3 days left! Investors looking for higher income-generating stocks to add to their portfolio should keep reading, as I examine Realty Income’s latest financial data to analyse its dividend characteristics. See our latest analysis for Realty Income
Here’s how I find good dividend stocks
If you are a dividend investor, you should always assess these five key metrics:
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Is their annual yield among the top 25% of dividend payers?
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Does it consistently pay out dividends without missing a payment of significantly cutting payout?
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Has it increased its dividend per share amount over the past?
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Can it afford to pay the current rate of dividends from its earnings?
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Based on future earnings growth, will it be able to continue to payout dividend at the current rate?
How well does Realty Income fit our criteria?
The company currently pays out more than double of its earnings as a dividend, which suggests that the dividend is not well-covered by earnings by any means. Furthermore, analysts are forecasting the payout ratio to remain at this high level going forward, leading to a future of uncertainty around the stability of O’s dividend income. If there’s one type of stock you want to be reliable, it’s dividend stocks and their stable income-generating ability. In the case of O it has increased its DPS from $1.64 to $2.55 in the past 10 years. It has also been paying out dividend consistently during this time, as you’d expect for a company increasing its dividend levels. This is an impressive feat, which makes O a true dividend rockstar. Compared to its peers, Realty Income produces a yield of 4.57%, which is high for reits stocks.
What this means for you:
Are you a shareholder? With Realty Income producing strong dividend income for your portfolio over the past few years, you can take comfort in knowing that this stock will still continue to be a robust dividend generator moving forward. However, depending on your portfolio composition, it may be valuable exploring other income stocks to enhance your diversification, or even look at high-growth stocks to supplement your steady income stocks. I encourage you to continue your research by checking out my interactive free list of dividend rockstars as well as high-growth stocks to potentially add to your holdings.