A 67-year-old aiming for $4,800 a month in dividend income is targeting $57,600 a year. That figure roughly mirrors what a comfortable, non-luxury retirement costs once Social Security and any pension income are stacked on top. It can be done through dividends alone. The real question is how much capital each yield tier demands, and what a retiree gives up to shrink that number.
Three funds anchor this discussion because they occupy distinct rungs of the income ladder: Schwab U.S. Dividend Equity ETF (NYSEARCA:SCHD) for compounding dividend growth, Realty Income (NYSE:O | O Price Prediction) for monthly cash flow, and JPMorgan Nasdaq Equity Premium Income ETF (NASDAQ:JEPQ) for premium covered-call yield.
The Conservative Rung: SCHD at Roughly 3% SCHD paid $1.048 over the trailing 12 months against a current share price of $33, putting its trailing yield near 3.2%. The fund holds a diversified sleeve of quality dividend payers: Bristol-Myers Squibb, Merck, ConocoPhillips, Lockheed Martin, Chevron, Verizon, AbbVie, Cisco, Coca-Cola, and Altria lead the roster, each near 4% of assets. The expense ratio is 0.06%, so fee drag is negligible.
To generate $57,600 at a 3.2% yield, a retiree needs roughly $1.8 million. That is the biggest capital ask on the page. It is also the tier where the paycheck grows. SCHD has meaningfully increased distributions over the past decade, and the fund’s price is up 221% over ten years. The retiree buys future raises with a lower starting yield.
The Middle Rung: Realty Income at About 5% Realty Income currently trades near $65 with an annualized dividend of $3.252 per share, a yield close to 5%. The monthly cadence is the reason it earns space in a retiree portfolio: the latest $0.271 payment hits accounts on August 14, 2026, and another follows every month. Realty Income has now declared 670 consecutive monthly dividends, and Q1 2026 AFFO per share rose 7% year over year to $1.13 with portfolio occupancy at 99%.
At 5%, replacing $57,600 requires about $1.15 million. The tradeoff is interest-rate sensitivity. The 10-year Treasury sits at 4.7% and the 30-year at 5.2%, which pressures REIT valuations even when the underlying rents keep growing.
The High-Yield Rung: JEPQ Near 11% JEPQ paid $6.26 over the trailing 12 months, and the most recent distribution was $0.63658 on shares priced near $59. That is a trailing yield in the 10% to 11% range. The expense ratio is 0.35%, and the strategy sells calls on Nasdaq-100 exposure to convert equity upside into current cash.
At 10%, $57,600 requires roughly $576,000 in capital. That is the smallest number on the page, and the reason retirees are drawn to covered-call funds. Monthly distributions swing widely (from $0.44 to $0.64 in recent months), and the fund caps participation in rallies. JEPQ has still delivered a 21% total return over the past year, but in a strong bull market the NAV lags an unhedged Nasdaq basket.
Capital Required at Each Yield Yield Representative Holding Capital for $57,600 3.2% SCHD ~$1.80M 5.0% Realty Income ~$1.15M 7.0% Blended equity income ~$823K 10.7% JEPQ ~$538K Why the Lowest Yield Often Wins A 3.2% yield that grows 8% a year doubles the paycheck in about nine years. An 11% yield that stays flat, or drifts down as NAV erodes, does not. A retiree living off SCHD in 2016 has watched both the share price and the distribution climb; a retiree who anchored to a static 10% payer often watches principal shrink. The barbell answer, blending SCHD’s growth engine, Realty Income’s monthly cadence, and JEPQ’s yield boost, is what actually funds $4,800 a month without either overpaying for safety or overreaching for headline yield.
Three Moves Before Committing Capital Price the actual spending rather than the salary figure. A 67-year-old on Medicare with a paid-off home often needs to replace $40,000 to $50,000, not $57,600, which changes the tier math dramatically. Compare 10-year total returns on SCHD versus JEPQ using an equal starting dollar amount to see how much dividend growth adds versus a static high yield. SCHD’s 221% ten-year return is the reference point. Model the tax hit. JEPQ distributions are largely ordinary income, Realty Income pays non-qualified REIT dividends, and SCHD’s are mostly qualified. In a taxable account, the after-tax paycheck can differ by thousands even when the pre-tax numbers match. Contact [email protected] for any questions or corrections.
Realty Income (O +1.35%) has been a compounding machine. The real estate investment trust (REIT) has delivered a 13.6% compound annual total return since its 1994 public market listing. A big driver has been its growing dividend. The REIT has raised its payment 135 times, growing it by a 4.1% compound annual growth rate.
The REIT pays a monthly dividend currently yielding 5%. With more dividend growth likely, a $25,000 investment could compound into real retirement income.
Image source: The Motley Fool.
An income compounding machine Realty Income offers investors a high current income yield that should grow over time. At its current yield, a $25,000 investment would generate about $1,237.50 in annual dividend income. That income stream should steadily grow over the years, given the REIT's history and its stated mission of investing to "deliver dependable monthly dividends that increase over time." Here's a look at how much dividend income the REIT could deliver if it continues to grow its dividend at around its historical rate of 4.1%:
Chart by the author.
That chart lays out two scenarios. Under one assumption, the investor doesn't reinvest their dividends. This scenario would see the $25,000 investment generating nearly $4,000 in annual dividend income from growth alone within 30 years, boosting the yield on cost to nearly 16%. Under the second scenario, the investor reinvests their dividends at the current yield (around 5%). This would compound their income exponentially by year 30, when they'd be collecting over $58,000 in dividends each year.
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While Realty Income's past success in growing its dividend is no guarantee it can continue growing its payout, let alone at its historical growth rate, it's in a strong position to do so. The REIT has a durable real estate portfolio secured by long-term net leases, a strong financial profile, and an expanding private capital ecosystem that's providing it with additional growth capital and investment opportunities. Add in the $14 trillion market opportunity Realty Income sees for investing in global net-lease real estate, and it has a long runway to continue growing its dividend. It has all the makings of an ideal retirement income investment.
Matt DiLallo has positions in Realty Income. The Motley Fool has positions in and recommends Realty Income. The Motley Fool has a disclosure policy.
In the latest close session, Realty Income Corp. (O - Free Report) was up +1.36% at $65.60. This change outpaced the S&P 500's 0.05% gain on the day. Elsewhere, the Dow saw an upswing of 0.46%, while the tech-heavy Nasdaq depreciated by 0.64%.
Prior to today's trading, shares of the real estate investment trust had gained 4.32% outpaced the Finance sector's gain of 1.74% and the S&P 500's gain of 0.61%.
Market participants will be closely following the financial results of Realty Income Corp. in its upcoming release. The company plans to announce its earnings on August 5, 2026. On that day, Realty Income Corp. is projected to report earnings of $1.09 per share, which would represent year-over-year growth of 3.81%. In the meantime, our current consensus estimate forecasts the revenue to be $1.54 billion, indicating a 8.98% growth compared to the corresponding quarter of the prior year.
Regarding the entire year, the Zacks Consensus Estimates forecast earnings of $4.45 per share and revenue of $6.27 billion, indicating changes of +3.97% and +9.03%, respectively, compared to the previous year.
Investors should also take note of any recent adjustments to analyst estimates for Realty Income Corp. Recent revisions tend to reflect the latest near-term business trends. Therefore, positive revisions in estimates convey analysts' confidence in the business performance and profit potential.
Based on our research, we believe these estimate revisions are directly related to near-term stock moves. To utilize this, we have created the Zacks Rank, a proprietary model that integrates these estimate changes and provides a functional rating system.
The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. Within the past 30 days, our consensus EPS projection has moved 0.1% higher. Realty Income Corp. is holding a Zacks Rank of #2 (Buy) right now.
In terms of valuation, Realty Income Corp. is currently trading at a Forward P/E ratio of 14.54. This valuation marks a discount compared to its industry average Forward P/E of 15.73.
It's also important to note that O currently trades at a PEG ratio of 5.05. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. REIT and Equity Trust - Retail stocks are, on average, holding a PEG ratio of 2.64 based on yesterday's closing prices.
The REIT and Equity Trust - Retail industry is part of the Finance sector. This group has a Zacks Industry Rank of 73, putting it in the top 30% of all 250+ industries.
The Zacks Industry Rank is ordered from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.
You can find more information on all of these metrics, and much more, on Zacks.com.
A common question among income investors is on the better investment between Realty Income NYSE:O and Schwab US Dividend Equity ETF (SCHD), two of the most common dividend assets.
Realty Income has become a $60 billion behemoth and a dividend aristocrat after hiking dividends for over 31 consecutive years. It has no expense ratio and has a dividend yield of 5%.
SCHD ETF has recently hit $100 billion in assets under management (AUM) and a tiny expense ratio of 0.03%. So, which is a better investment?
Realty Income is a top company in the real estate investment trust (REIT) industry. Its business model is relatively simple. It acquires freestanding commercial properties and then leases them to tenants across various creditworthy clients. Its top clients are companies like Dollar General, 7-Eleven, Walgreens, Family Dollar, and Life Time Group.
The company uses a net lease structure that lets its clients handle everything related to the properties, including taxes, insurance, and maintenance. At the same time, it has rent escalation clauses, enabling it to have a good revenue visibility in the future.
Realty Income uses long-term debt, equity, and retained cash flow to fund its property acquisitions. This approach helps it to have low financing costs over time. For example, its 2035 bonds are yielding 5.4%, slightly higher than the government bond yield of 4.7%.
Realty Income is known for its trademarked phrase “The Monthly Dividend Company” in that it pays dividends each month. This makes it a popular company among people in fixed income.
The company has expanded both organically and through acquisitions. It bought Spirit Realty in 2023 in a $9.3 billion deal and Encore Boston Harbor in a $1.7 billion deal. It also bought CIM Real Estate Finance Trust, American Realty Capital, and VEREIT.
Realty Income has moved to expand its business to other areas. Most recently, it formed a joint venture with Cloud Capital to invest in hyperscale data centers in a deal worth $6 billion. It will invest $1.4 billion and have a 45% equity stake in three assets in Northern Virginia.
SCHD, on the other hand, is one of the largest dividend ETFs in the world with over $100 billion in assets. This fund invests in companies that have consistently paid and increased their dividends.
It invests in companies across most industries and excludes REITs. Some of its top firms in the fund are Abbott Laboratories, Merck, UnitedHealth, Amgen, Procter & Gamble, and Home Depot.
The fund has added billions of dollars in the past few months, and this trend may continue because it is widely seen as an anti-AI fund.
SCHD and Realty Income are different assets and target different investors. In terms of returns, SCHD has been a better investment by far. Its total return this year was 22%, higher than Realty Income’s 17.8%.
The same happened in the last five years. SCHD jumped by 55%, while Realty Income soared by 22% in this period. It is also a more diversified fund, with losers being offset by gainers. Realty Income, on the other hand, is an individual company that may be exposed to risks in the real estate industry.
As central bank policy stabilizes and real estate valuations recalibrate, income-focused investors are increasingly looking toward real estate investment trusts (REITs) to secure durable cash flows.
However, capturing reliable passive income in today's market requires looking beyond raw yield – it demands balance sheet strength, high portfolio occupancy, and clear distribution visibility.
Whether anchoring a portfolio with monthly net-lease payouts, riding structural industrial tailwinds, or tapping into healthcare real estate restructuring, selective allocations can provide both inflation defense and reliable yield.
Here are three top REITs positioning themselves as standout income engines for 2026.
Realty Income remains the foundational allocation for monthly cash flow-seeking investors.
Hovering around $65 currently, with a market cap of over $60 billion, the company pays a healthy dividend yield of 5.01% at writing, underpinned by a June payout hike to $0.271 a share – marking 132 dividend hikes since its 1994 public debut.
Q1 Adjusted Funds From Operations (AFFO) climbed 7% year-over-year to $1.13 a share on $1.55 billion in revenue, driven by 99% portfolio occupancy and a 103% rent recapture rate.
Realty’s management expanded full-year investment volume guidance to $9.5 billion – reinforced by a $1.0 billion strategic partnership with Apollo.
All in all, cash flow durability and disciplined capital deployment are why Wall Street analysts rate it at Overweight currently, with price targets going as high as $72, indicating about a 10% upside from here.
STAG Industrial provides focused exposure to single-tenant industrial real estate, though investors should account for its January 2026 operational transition from monthly to quarterly dividend distributions.
At about $40 per share, STAG yields roughly 3.45% via its $0.3875 quarterly payout.
Underlying fundamental momentum remains robust: fourth-quarter 2025 revenue expanded 11% year-over-year to $220.9 million, generating an 8% increase in Core FFO to $0.66 per share.
Portfolio occupancy held strong at 96.4%, accompanied by a 24% full-year cash rent change.
With 69% of 2026 leasing already secured at a 20% cash rent spread and a $3.6 billion deal pipeline, STAG offers high-quality dividend protection.
That said, Wall Street currently rates STAG stock at Hold only, with the mean price target of nearly $42.
Healthpeak Properties presents a compelling yield strategy following its transition to a monthly payout structure of $0.10 per share, delivering a 5.53% yield at $21.62.
The primary catalyst stems from the Janus Living IPO, which netted approximately $880 million in capital while allowing Healthpeak to retain an 82% equity stake in the $6.9 billion entity.
First-quarter 2026 operational metrics outperformed expectations, as GAAP EPS of $0.28 easily beat consensus estimates and senior housing same-store cash NOI expanded 14%.
Healthpeak’s management raised full-year adjusted FFO guidance to $1.71–$1.75 per share, reinforcing dividend safety alongside an active share repurchase program.
Wall Street currently rates DOC at Overweight with price targets going as high as $29.
Realty Income's (O -0.51%) developed a stellar reputation as a brick-and-mortar retailer REIT, defying the headwinds that are supposed to be destroying the retail industry. In fact, this landlord has raised its annual per-share dividend for nearly 29 consecutive years. And by no small amount either. Since listing itself on the NYSE in 1994, it's upped its dividend by an average of 4.1% per year.
Shareholders may see this growth pace perk up for the foreseeable future as this retail-focused real estate investment trust eases its way into the data center business. Here's what you need to know.
Yes, that Realty Income -- the retailer REIT It's true! The landlord to some of the retail industry's most resilient names, like Dollar General, Walmart, and Home Depot, is getting into the data center industry.
OK, it technically entered this business back in late 2023 by acquiring an 80% interest in two data centers then under construction in Northern Virginia that would ultimately be steered by AI infrastructure outfit Digital Realty.
That $800 million commitment was trumped in a big way just last month, however, when Realty Income formed a joint venture with Cloud Capital and an unnamed institutional investor. Together, they're initially committing over $6 billion to hyperscale data centers, leaving the door open to greater investment in the future.
Image source: Getty Images.
At first blush, it appears this REIT is moving into waters beyond its core proficiency. That's not quite the case. The business model here is essentially the same as its brick-and-mortar retailing operation -- Realty Income builds or buys a structure, and then converts it into a space that generates rental income.
In this case, the "renters" are simply companies leasing cloud-based access to computing servers. As Realty Income's CEO, Sumit Roy, commented on the agreement, the "announcement affirms the strength of our business model and its ability to translate across sectors, including digital infrastructure."
Accelerated income growth ahead One data center deal isn't necessarily game-changing for Realty Income. For that matter, neither is a small handful. For perspective on the amount of capital this real estate investment trust is actually putting into the business, the current net value of the company's real estate portfolio stands at $54 billion, which turned over $5.7 billion in revenue last year into nearly $4 billion worth of operating funds to pass along to shareholders, plus an additional $1.0 billion in net income. Its current data center efforts aren't likely to move the needle much just yet.
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Be patient, though. It's unlikely that Realty Income will back away from the hyperscale data center business now that it's proven it's comfortable with it. If anything, it's more likely than not to continue adding these projects to its portfolio. It matters simply because, according to Precedence Research, the worldwide data center market is poised to grow at an average yearly pace of nearly 27% through 2035. There's money to be made here.
Just don't lose perspective on this. While the opportunity for revenue growth is significant, hyperscale data centers also require a great deal of up-front capital and a somewhat slow payback period. It's still more of an income growth investment than a typical growth holding.
James Brumley has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Digital Realty Trust, Home Depot, Realty Income, and Walmart. The Motley Fool has a disclosure policy.
Coca-Cola (KO -1.18%) might be the textbook example of consistency in the stock market. The company boasts an iconic name known worldwide and continues to shower its shareholders with cash year in and year out.
Coca-Cola is royalty among dividend investors. I mean that literally. Its 64 consecutive annual dividend hikes make it a Dividend King, a rare club of companies with at least five decades of uninterrupted payout growth.
But that rock-solid steadiness investors love about Coca-Cola can work against it when the price isn't right. And at a hefty 25 times 2026 earnings estimates, investors can do better than Coca-Cola right now. This other stock offers a similarly impressive track record with nearly double the dividend yield and with monthly payouts to boot.
Image source: The Motley Fool.
Pivoting from soda to real estate Real estate is a timeless investment, especially for generating income. But investors can't easily buy or sell commercial real estate.
That's where real estate investment trusts (REITs) come in. These are publicly traded companies that acquire and lease properties, then pay out most of their taxable income to investors as non-qualified dividends.
Realty Income (O +0.21%) is one of the world's top REITs. The company boasts a global portfolio of 15,571 properties, primarily leased to single-tenant businesses in consumer-facing industries. Think along the lines of grocery and convenience stores, home improvement stores, fast-food restaurants, drug stores, and automotive repair shops. Realty Income also uses a net lease model, which typically makes the tenant responsible for the property's taxes, insurance, and maintenance.
A better dividend at a compelling valuation
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Stability is the entire point of Realty Income's business model. The company has raised its dividend for 31 consecutive years, a streak that includes two real estate market crises: the 2008-2009 recession and the COVID-19 pandemic in 2020. If Realty Income can raise its dividend in both situations, investors can feel pretty good about the dividend moving forward.
The financials back that up, too. The current dividend is only 73% the company's guided 2026 distributable cash profits.
Like Coca-Cola, Realty Income doesn't grow very fast. The company's lifetime dividend growth rate of only 4.2% reflects that. Fortunately, the stock trades at a far more reasonable valuation than Coca-Cola does right now.
Whereas investors can value most companies using retained earnings, they can value Realty Income and other REITs using funds from operations (FFO). It's a non-GAAP (generally accepted accounting principles) metric for REITs, since these companies are required to pay out their taxable earnings to investors.
Realty Income trades at less than 15 times its 2026 FFO guidance. Despite Realty Income's modest growth, that's an appealing price for a top-notch dividend stock, especially considering its rare monthly payout schedule.
Assetmark Inc. trimmed its stake in shares of Realty Income Corporation (NYSE:O – Free Report) by 16.2% during the first quarter, according to its most recent disclosure with the Securities and Exchange Commission. The institutional investor owned 71,233 shares of the real estate investment trust’s stock after selling 13,821 shares during the period. Assetmark Inc.’s holdings in Realty Income were worth $4,358,000 at the end of the most recent reporting period.
Several other hedge funds have also modified their holdings of the stock. EFG International AG acquired a new position in Realty Income during the 4th quarter worth $26,000. Evolution Wealth Management Inc. boosted its position in Realty Income by 257.1% in the 4th quarter. Evolution Wealth Management Inc. now owns 500 shares of the real estate investment trust’s stock valued at $28,000 after buying an additional 360 shares during the last quarter. Quattro Advisors LLC acquired a new stake in shares of Realty Income in the 4th quarter valued at $29,000. Sankala Group LLC acquired a new stake in shares of Realty Income in the 4th quarter valued at $32,000. Finally, FNY Investment Advisers LLC raised its position in shares of Realty Income by 622.2% during the fourth quarter. FNY Investment Advisers LLC now owns 650 shares of the real estate investment trust’s stock worth $36,000 after acquiring an additional 560 shares during the last quarter. 70.81% of the stock is owned by institutional investors.
Analyst Upgrades and Downgrades O has been the topic of several research reports. Barclays cut their price target on Realty Income from $68.00 to $67.00 and set an “equal weight” rating on the stock in a research note on Wednesday. Robert W. Baird boosted their price objective on Realty Income from $64.00 to $65.00 and gave the stock a “neutral” rating in a report on Monday, July 6th. Weiss Ratings restated a “hold (c+)” rating on shares of Realty Income in a research report on Wednesday, July 8th. Scotiabank reduced their target price on shares of Realty Income from $72.00 to $67.00 and set a “sector outperform” rating on the stock in a research note on Thursday, June 18th. Finally, Morgan Stanley set a $67.00 target price on shares of Realty Income in a research note on Monday, April 27th. One research analyst has rated the stock with a Strong Buy rating, seven have given a Buy rating, eight have issued a Hold rating and one has assigned a Sell rating to the company. According to data from MarketBeat, Realty Income currently has a consensus rating of “Hold” and a consensus price target of $67.11.
Get Our Latest Stock Report on Realty Income
Realty Income Stock Up 0.2% Shares of NYSE O opened at $65.14 on Thursday. Realty Income Corporation has a 52-week low of $55.86 and a 52-week high of $67.93. The company has a debt-to-equity ratio of 0.72, a quick ratio of 1.56 and a current ratio of 1.56. The stock has a market cap of $60.74 billion, a P/E ratio of 53.39, a P/E/G ratio of 5.07 and a beta of 0.72. The firm has a 50 day moving average price of $62.31 and a 200 day moving average price of $62.63.
Realty Income (NYSE:O – Get Free Report) last posted its earnings results on Wednesday, May 6th. The real estate investment trust reported $1.13 earnings per share for the quarter, topping the consensus estimate of $1.10 by $0.03. The company had revenue of $1.55 billion for the quarter, compared to analyst estimates of $1.39 billion. Realty Income had a net margin of 18.94% and a return on equity of 2.80%. The business’s revenue for the quarter was up 12.2% compared to the same quarter last year. During the same period last year, the business posted $1.06 earnings per share. Realty Income has set its FY 2026 guidance at 4.410-4.440 EPS. Analysts expect that Realty Income Corporation will post 4.45 EPS for the current year.
Realty Income Announces Dividend The firm also recently announced a monthly dividend, which will be paid on Friday, August 14th. Shareholders of record on Friday, July 31st will be issued a dividend of $0.271 per share. The ex-dividend date is Friday, July 31st. This represents a c) annualized dividend and a yield of 5.0%. Realty Income’s payout ratio is currently 266.39%.
Realty Income News Roundup Here are the key news stories impacting Realty Income this week:
Positive Sentiment: Realty Income was highlighted as a “buy and hold forever” dividend stock, with articles emphasizing its wide competitive moat, reliable monthly payout, and long-term appeal for income investors. This Dividend Stock’s Moat Is as Wide as It Gets. 3 Reasons to Buy and Hold Forever. Positive Sentiment: Coverage also pointed to Realty Income’s growth acceleration strategy and recent performance strength, suggesting investors remain attracted to the REIT’s combination of dividend income and steady operating momentum. Meet the Unstoppable Dividend Stock Crushing the S&P 500 in 2026 Positive Sentiment: News that Realty Income expanded its unsecured revolving credit facilities from $4.0 billion to $5.5 billion, with potential capacity up to $6.5 billion, supports its ability to fund acquisitions and manage liquidity. Realty Income (O) After Its Credit Expansion, Is The Stock Already Fully Valued Neutral Sentiment: Several articles noted that Realty Income is trending on Zacks and being watched closely by retail investors, which reflects elevated attention but does not by itself change the fundamentals. Realty Income Corporation (O) Is a Trending Stock: Facts to Know Before Betting on It Neutral Sentiment: Other commentary focused on valuation, with some analysts arguing the bull case depends more on how expensive the stock is than on near-term earnings growth, which keeps the debate centered on fair value rather than a major catalyst. Realty Income: The Bull Case Relies More On Valuation Than Earnings Negative Sentiment: Some coverage questioned whether the stock is already fully valued after its recent run-up, which could temper upside if investors focus on valuation instead of dividend strength. Realty Income (O) After Its Credit Expansion, Is The Stock Already Fully Valued Realty Income Profile (Free Report)
Realty Income Corporation (NYSE: O) is a real estate investment trust (REIT) that acquires, owns and manages commercial properties subject primarily to long-term net lease agreements. The company’s business model focuses on generating predictable, contractual rental income by leasing properties to tenants under agreements that typically place responsibility for taxes, insurance and maintenance on the tenant. Realty Income is publicly traded on the New York Stock Exchange and markets itself as a reliable income-oriented REIT.
Realty Income’s portfolio is concentrated in single-tenant, retail and service-oriented properties such as drugstores, convenience stores, dollar and discount retailers, restaurants, and other essential-service businesses.
Recommended Stories Five stocks we like better than Realty Income Could Truth API Become Trump Media’s First Meaningful Revenue Driver? Small Caps Are Crushing the S&P 500—3 Stocks Still Worth Buying Moog Is More Than a Missile Maker, and Wall Street Is Noticing A Boring Dividend Growth Strategy Becomes a Solid Defensive Play Want to see what other hedge funds are holding O? Visit HoldingsChannel.com to get the latest 13F filings and insider trades for Realty Income Corporation (NYSE:O – Free Report).
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Do you need income you can reliably count on today, tomorrow, next year, and a decade from now? Not every dividend stock necessarily fits this bill.
Here's a closer look, however, at four names that do.
Image source: Getty Images.
1. McDonald's You know it as a fast-food restaurant chain. But that description isn't entirely accurate. McDonald's (MCD -0.13%) is mostly a real estate company. It just so happens that its tenants are the franchisees operating approximately 95% of the 45,699 McDonald's restaurants spread all over the world. Their rent payments account for roughly two-thirds of every dollar they pass along to the parent company, and nearly one-third of the company's total revenue. Royalties on franchisees' restaurants' sales make up most of the remainder of the companywide top line.
And that's no meaningless detail. These rent rates are market-based, meaning they rise as the economy grows and ordinary inflation raises the price of... well, everything. The cost of its owned real estate, however, doesn't change.
This has been a point of contention with its franchisees to be sure; other fast-food restaurant chains' franchisees typically own their own buildings. By and large, though, operators are willing to pay these ever-rising costs simply because the McDonald's brand is so well loved and so reliably marketable.
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More important to income investors, this business model has now allowed McDonald's to raise its per-share dividend payment for 49 consecutive years, leaving it just one year shy (and just a few months away) from becoming dividend royalty.
2. Oneok Oneok (OKE -0.09%) isn't a household name. There's a pretty good chance, however, that your household regularly depends on its service. Oneok owns and operates approximately 60,000 miles' worth of natural gas and crude oil pipelines -- mostly in the U.S. Midwest -- getting both from where they're extracted, refined, or processed to where they're eventually consumed.
It's an ideal business model for driving dividends, too, even within the always-volatile energy industry. Unlike integrated outfits Chevron or ExxonMobil, pipeline companies simply charge a flat fee for the amount of gas or oil that's pushed through their pipes; the price of that gas or oil has no bearing on profitability. The only thing Oneok needs is for the nation to continue consuming plenty of both -- which it is. The U.S. Energy Information Administration reports consumers are still burning both products as much as ever.
Oneok's history confirms it, too. Not only has this energy name been paying a quarterly dividend like clockwork for years, but it has also nearly doubled its per-share payment over the course of the past decade, in line with its annual dividend growth target of 3% to 4%.
3. Realty Income With nothing more than a passing glance, it would seem real estate investment trust Realty Income's (O +0.06%) brick-and-mortar retailing focus is a liability. The industry is suffering a so-called retail apocalypse.
Realty Income is largely sidestepping the headwind, though. With resilient tenants including Dollar General, Home Depot, Tractor Supply, and 7-Eleven, since 2013 this REIT has consistently maintained occupancy rates at or above 98%.
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That's not the only part of the thesis for owning a stake in Realty Income, though. The other part -- and arguably the more important part -- is that this REIT has not only paid a monthly (yes, monthly) dividend every month for the past 56 years, but has also raised this dividend payment every quarter for the past 28 years.
The kicker: Realty Income is easing its way into the artificial intelligence data center industry, announcing last month it had entered into a joint venture with Cloud Capital and an unnamed institutional investor to establish its first footprint in a business that Global Market Insights expects to grow at an average annual pace of 12.1% through 2035.
Newcomers will be plugging into this ticker while its forward-looking yield stands at 5%.
4. Verizon Finally, add Verizon (VZ +1.15%) to your list of money-printing machines while its yield is a solid 6.5%. There's always a trade-off for unusually strong dividend yields like this one. In this case, the trade-off is the lack of revenue growth that will ultimately limit any capital appreciation from the stock itself. Pew Research says 98% of adults living in the United States already own a mobile phone, for perspective, meaning customer growth within this saturated market is largely limited to the nation's population growth.
The thing is, this trade-off is still well worth it. Not only is this stock's outstanding yield well above the average for companies of its caliber, but it's also built to last, and grow.
For better or worse, Americans are essentially addicted to their cell phones, with Review.org reporting that we look at our phones' screens an average of 186 times per day whether or not we need to. With this habit now well formed, it's unlikely the vast majority would be willing to give up this constant connection to the rest of the world anytime soon, if ever. We'll pay whatever monthly fee is necessary to keep our phones connected to our service provider's network.
In other words, Verizon's 19-year streak of annual dividend increases is likely to continue being extended indefinitely.
Realty Income Corp. (O - Free Report) is one of the stocks most watched by Zacks.com visitors lately. So, it might be a good idea to review some of the factors that might affect the near-term performance of the stock.
Shares of this real estate investment trust have returned +5.6% over the past month versus the Zacks S&P 500 composite's +0.3% change. The Zacks REIT and Equity Trust - Retail industry, to which Realty Income Corp. belongs, has gained 2.6% over this period. Now the key question is: Where could the stock be headed in the near term?
Although media reports or rumors about a significant change in a company's business prospects usually cause its stock to trend and lead to an immediate price change, there are always certain fundamental factors that ultimately drive the buy-and-hold decision.
Earnings Estimate RevisionsRather than focusing on anything else, we at Zacks prioritize evaluating the change in a company's earnings projection. This is because we believe the fair value for its stock is determined by the present value of its future stream of earnings.
We essentially look at how sell-side analysts covering the stock are revising their earnings estimates to reflect the impact of the latest business trends. And if earnings estimates go up for a company, the fair value for its stock goes up. A higher fair value than the current market price drives investors' interest in buying the stock, leading to its price moving higher. This is why empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock price movements.
For the current quarter, Realty Income Corp. is expected to post earnings of $1.09 per share, indicating a change of +3.8% from the year-ago quarter. The Zacks Consensus Estimate remained unchanged over the last 30 days.
For the current fiscal year, the consensus earnings estimate of $4.45 points to a change of +4% from the prior year. Over the last 30 days, this estimate has changed +0.3%.
For the next fiscal year, the consensus earnings estimate of $4.6 indicates a change of +3.3% from what Realty Income Corp. is expected to report a year ago. Over the past month, the estimate has changed +0.3%.
With an impressive externally audited track record, our proprietary stock rating tool -- the Zacks Rank -- is a more conclusive indicator of a stock's near-term price performance, as it effectively harnesses the power of earnings estimate revisions. The size of the recent change in the consensus estimate, along with three other factors related to earnings estimates, has resulted in a Zacks Rank #2 (Buy) for Realty Income Corp..
The chart below shows the evolution of the company's forward 12-month consensus EPS estimate:
12 Month EPS
Projected Revenue GrowthEven though a company's earnings growth is arguably the best indicator of its financial health, nothing much happens if it cannot raise its revenues. It's almost impossible for a company to grow its earnings without growing its revenue for long periods. Therefore, knowing a company's potential revenue growth is crucial.
For Realty Income Corp., the consensus sales estimate for the current quarter of $1.54 billion indicates a year-over-year change of +9%. For the current and next fiscal years, $6.27 billion and $6.78 billion estimates indicate +9% and +8.2% changes, respectively.
Last Reported Results and Surprise HistoryRealty Income Corp. reported revenues of $1.55 billion in the last reported quarter, representing a year-over-year change of +12.2%. EPS of $0.33 for the same period compares with $1.06 a year ago.
Compared to the Zacks Consensus Estimate of $1.5 billion, the reported revenues represent a surprise of +3.36%. The EPS surprise was +2.73%.
Over the last four quarters, Realty Income Corp. surpassed consensus EPS estimates two times. The company topped consensus revenue estimates each time over this period.
ValuationWithout considering a stock's valuation, no investment decision can be efficient. In predicting a stock's future price performance, it's crucial to determine whether its current price correctly reflects the intrinsic value of the underlying business and the company's growth prospects.
While comparing the current values of a company's valuation multiples, such as price-to-earnings (P/E), price-to-sales (P/S), and price-to-cash flow (P/CF), with its own historical values helps determine whether its stock is fairly valued, overvalued, or undervalued, comparing the company relative to its peers on these parameters gives a good sense of the reasonability of the stock's price.
As part of the Zacks Style Scores system, the Zacks Value Style Score (which evaluates both traditional and unconventional valuation metrics) organizes stocks into five groups ranging from A to F (A is better than B; B is better than C; and so on), making it helpful in identifying whether a stock is overvalued, rightly valued, or temporarily undervalued.
Realty Income Corp. is graded D on this front, indicating that it is trading at a premium to its peers. Click here to see the values of some of the valuation metrics that have driven this grade.
Bottom LineThe facts discussed here and much other information on Zacks.com might help determine whether or not it's worthwhile paying attention to the market buzz about Realty Income Corp.. However, its Zacks Rank #2 does suggest that it may outperform the broader market in the near term.
Realty Income is rated Hold as current prices embed strong long-term growth not fully supported by recent numbers. Q1 2026 AFFO growth was driven mostly by non-recurring items, with core organic rental growth modest and same-store rents lagging inflation. The dividend remains well-covered with a 72% payout ratio and strong occupancy, but dividend growth is slowing and yield has compressed below 5%.
The S&P 500 is up about 9% year-to-date, putting it on track for another year of double-digit gains. That strong return is a high hurdle for a dividend-paying stock to overcome. However, that's just what Realty Income (O 0.81%) has done this year. The real estate investment trust (REIT) has gained over 16.5%, while its dividend has driven the total return to more than 19.5%.
Here's what's driving this unstoppable dividend's stock's market-crushing total returns in 2026.
Image source: Getty Images.
135 times (and counting) Realty Income's main draw is its dividend income. The REIT pays a monthly dividend that currently yields about 4.9% (roughly four times the S&P 500's 1% dividend yield). That high-yielding dividend has proven unstoppable over the years. Realty Income has declared 673 consecutive monthly dividends throughout its history. The REIT has raised its payout 135 times since its public market listing in 1994, including for the past 115 consecutive quarters, growing it at a 4.1% compound annual rate.
The primary factor driving dividend growth is new investments. Realty Income buys billions of dollars in income-producing real estate each year, which grows its adjusted funds from operations (AFFO) per share. The REIT currently expects to invest about $9.5 billion this year (up from $6.2 billion last year), which should grow its AFFO to $4.41-$4.44 per share, a 3% to 3.7% increase from last year.
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Securing partners to enhance its growth Realty Income's unstoppable dividend isn't the main reason it's crushing the S&P 500 this year. The primary catalyst is its progress in building a private capital ecosystem. This strategy will enable it to accelerate AFFO per share growth with capital-light revenue, reduce its reliance on the public equity market, and expand its investment opportunities. This platform currently consists of four vehicles:
U.S. Core Plus Fund: The REIT launched a private capital fund to generate fee-based income, enhancing returns and increasing the amount of capital it can invest. GIC strategic partnership: Realty Income formed a strategic partnership with GIC. They will form a joint venture (JV) focused on high-quality build-to-suit logistics development projects. GIC also became a cornerstone investor in the U.S. Core Plus Fund. Meanwhile, Realty Income agreed to a construction financing and take-out purchase agreement of a $200 million build-to-suit industrial portfolio in Mexico (its first investment in the country). Apollo strategic partnership: Apollo-managed funds will invest $1 billion into a JV that will own a diversified portfolio of single-tenant retail properties. Cloud Capital joint venture: Realty Income is forming a JV with Cloud Capital to invest in hyperscale data centers. These partnerships provide Realty Income with additional capital to invest in real estate and new investment opportunities. These dual drivers position the REIT to grow AFFO per share faster going forward, which should support continued dividend increases.
Executing its acceleration strategy Realty Income has made significant progress in building a private capital ecosystem. This strategy should drive faster growth going forward. That's driving up the REIT's share price this year. Despite that higher valuation, it's still a very attractive income investment, given its high yield and unstoppable dividend growth.
Matt DiLallo has positions in Realty Income. The Motley Fool has positions in and recommends Realty Income. The Motley Fool has a disclosure policy.
Realty Income Corporation remains a compelling buy, combining attractive valuation, quality, and a robust 5.14% yield versus peers. O is executing significant growth, raising 2026 investment guidance to $9.5B and boosting adjusted FFO per share outlook to $4.41–$4.44. The portfolio's defensible retail mix, staggered lease expirations, and low tenant concentration underpin O's low-risk profile.
Realty Income is a premier net lease REIT with exceptional scale, high occupancy (98.9%), and a 31-year dividend growth streak. O's valuation appears full after a recent rally, with limited upside absent a material decline in interest rates; I initiate with a Hold rating. Consistent AFFO/share growth (2–4% annually) and strategic partnerships diversify income, but AFFO growth lags peers like ADC and EPRT.
Realty Income is the best REIT to buy now given its portfolio structure and risk-adjusted return potential. O's portfolio boasts exceptional diversification, resilient occupancy, and a weighted average lease term of 8.7 years, supporting cash flow predictability. International expansion, especially in Europe and data centers, significantly expands O's TAM and provides access to differentiated growth and financing opportunities.
My top financial goal is to become financially independent. I'll reach financial freedom once my passive income can cover my basic living expenses. That's leading me to buy stocks that pay sustainable dividends that should continue growing.
Two of my top passive income investments are Brookfield Renewable (BEPC 0.50%)(BEP 0.13%) and Realty Income (O 0.11%). I plan to hold both for the next decade. Here's why.
Image source: Getty Images.
High-powered dividend growth ahead Brookfield Renewable checks all the boxes for what I seek in a core passive income stock investment:
A high current yield: At over 4.5%, it's well above the S&P 500's roughly 1% yield. A strong dividend growth track record: Brookfield Renewable has increased its payout by at least 5% annually since 2011. A fortress financial profile: Brookfield has stable cash flows (90% contracted for an average of 12 years), a comfortable dividend payout ratio (around 75% of its funds from operations (FFO) over the last 12 months), and a strong investment-grade balance sheet (BBB+). Visible growth profile: It expects to grow its FFO per share by more than 10% annually through at least 2031, which should support dividend growth of 5% to 9% annually. While Brookfield's current yield is very attractive, the company's growth potential is why I plan to hold it for the next decade. It has multiple growth drivers, including inflation-linked contractual rate increases, margin expansion as existing contracts expire and renew at higher rates, development projects, and acquisitions.
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Brookfield has a large pipeline of renewable energy development projects, which should keep it busy for the next decade. For example, it's building over 10.5 gigawatts (GW) of power generation capacity for Microsoft alone between 2026 and 2030. For perspective, Brookfield's current operating capacity is around 47 GW.
The company's high-powered growth engine should enable it to generate strong total returns. With a 4.5%+ yield and a more than 10% annual earnings growth rate, Brookfield could deliver total annual returns in the mid-teens. So, it can grow my passive income and my wealth in the coming decade.
A dependable passive income producer Realty Income is an ideal passive income investment because it pays a monthly dividend. The real estate investment trust (REIT) also has everything I look for in a core passive income investment:
Yield: Nearly 5%. Dividend growth: Every year since its IPO in 1994. It has raised its payment 135 times, including for the past 115 consecutive quarters, growing it at a 4.1% compound annual rate. Financial profile: 100% of its cash flow secured by long-term, triple-net leases, a 75% adjusted FFO payout ratio, and an A3/A- credit rating. Growth potential: A $14 trillion total addressable market opportunity to invest in net-lease real estate across the U.S. and Europe.
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Realty Income has taken several steps over the past year to enhance its ability to continue growing its portfolio and dividend in the coming decade. The REIT is tapping into the massive private market by forming several private capital investment vehicles and strategic partnerships. Over the past year, it launched its U.S. Core Plus Fund and joint ventures with Apollo, GIC, and Cloud Capital. This strategy will enhance returns, provide low-cost equity capital to fund new investments, and create new growth opportunities. For example, one aspect of its strategic partnership with GIC is a construction financing and take-out purchase agreement for a $200 million build-to-suit industrial portfolio in Mexico, its first investment in that country. Meanwhile, its programmatic joint venture with Cloud Capital will enable the REIT to invest in high-quality data centers in the U.S. and Europe.
Anchor income stocks Brookfield Renewable and Realty Income are two of my foundational income holdings. They pay high-yielding dividends backed by strong financial profiles, providing me with income I can bank on. Meanwhile, they have strong growth track records, which should continue in the coming decade. That's why I plan to hold both for the next 10 years and will likely continue adding to my positions to further grow my passive income.
Matt DiLallo has positions in Brookfield Renewable, Brookfield Renewable Partners, and Realty Income. The Motley Fool has positions in and recommends Microsoft and Realty Income. The Motley Fool recommends Brookfield Renewable and Brookfield Renewable Partners. The Motley Fool has a disclosure policy.
Tuesday brought the kind of inflation report investors have been waiting on all year. The Consumer Price Index (CPI) rose 3.5% year over year in June, down sharply from 4.2% in May and below economists' expectations, as gasoline prices posted their biggest monthly drop in years. Core inflation, which excludes food and energy, cooled to 2.6% from 2.9%.
For most stocks, that's background news. For Realty Income (O +3.94%), one of the market's most rate-sensitive dividend stocks, it's closer to the main event. After a year in which hot inflation kept the threat of Federal Reserve rate hikes alive, the pressure on this real estate investment trust (REIT) may finally be easing.
Here's why I'd consider buying the stock now.
Image source: Getty Images.
A 5% yield, paid monthly Realty Income calls itself The Monthly Dividend Company, and the numbers back the branding. The company has declared more than 670 consecutive monthly dividends, and it has increased its payout for over 31 consecutive years, making it a member of the S&P 500 Dividend Aristocrats® index (the term Dividend Aristocrats® is a registered trademark of Standard & Poor's Financial Services LLC).
In March, the company announced its 114th consecutive quarterly dividend increase, and the monthly dividends it paid during the first quarter were up 1.8% year over year. At about $63 per share, the stock's annualized dividend of about $3.25 works out to a yield just over 5.1%.
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The business behind the payout is deliberately boring. Realty Income owns 15,571 properties leased to 1,786 clients across 92 industries, mostly under long-term net leases (agreements in which the tenant covers taxes, insurance, and maintenance). The weighted average lease has about 8.7 years remaining. And portfolio occupancy held steady at 98.9% at the end of the first quarter.
The dividend is well covered, too. Realty Income paid out about 72% of its first-quarter adjusted funds from operations (AFFO), a common measure of a REIT's cash earnings.
AFFO per share rose 6.6% year over year in the first quarter to $1.13, and management raised its full-year guidance to a range of $4.41 to $4.44 -- annual growth of 3% to 3.7%, with the first quarter running ahead of that pace. It's a modest trajectory. It's also exactly what income investors are here for.
Why Tuesday's report matters so much here Realty Income grows by raising money and buying more properties, pocketing the difference between its cost of capital and the rental yields on what it buys. In the first quarter, it invested $2.8 billion, with its $2.6 billion pro-rata share carrying an initial weighted average cash yield of 7.1%. Management also lifted its full-year investment guidance to $9.5 billion from $8 billion.
Interest rates sit on both sides of that equation. When rates rise, Realty Income's borrowing costs climb, and the spread on new deals narrows. Rising rates also give income investors a risk-free alternative, which tends to pull REIT share prices down until their yields look competitive again. Falling rate pressure eases both problems at once.
That's what makes June's inflation data such a welcome development. With inflation running hot this spring, traders had been pricing in meaningful odds that the Fed would raise rates again. After Tuesday's report, those bets faded fast. Market pricing now points to an 86% chance the central bank holds steady at its July 29 meeting, according to CME FedWatch data.
Of course, one good inflation print doesn't settle anything. Inflation at 3.5% remains well above the Fed's 2% target, and June's improvement leaned heavily on falling gas prices, which can reverse. If inflation reaccelerates, the rate threat comes right back, and Realty Income's stock would likely feel it.
There are business risks, too. Realty Income's tenants are heavily concentrated in retail, where struggling chains can hand back keys. And AFFO growth of 3% to 4% a year will never make this a growth stock.
But the stock's valuation may already reflect those limitations. At about $63 per share as of this writing, the stock trades at roughly 14 times the midpoint of this year's expected AFFO, and about 7% below its 52-week high.
So that's the case. An annual yield above 5% from a portfolio that stays nearly full in good markets and bad, with three decades of dividend increases behind it -- and the rate pressure that has weighed on the stock is finally easing. Overall, I'd consider buying Realty Income here and let the monthly checks do the compounding.
On July 16, 2026, Realty Income Corp (O) shares rose 3.9%, closing at $65.75. This price movement is notable considering the stock's recent performance, which h
Americkým indexům se dnes nedaří. Po počáteční kladném otevření se v průběhu dne pomalu ale jistě sunou do záporných hodnot, momentálně s výjimkou Dow Jones, který je na kladné nule. Technologický sektor je i nadále tlačen vahou čipového sektoru, který nadále koriguje letošní růstovou rallye. V Americké společnosti se začíná objevovat napětí kolem sektoru umělé inteligence, přičemž se začíná mluvit o její regulaci. V obci v Michiganu se lidé postavili proti výstavbě datového centra za 16 mld. USD, který má být velkým společným projektem firem Oracle, Open AI, Related Digital, Blackstone a Walbridge. Investoři jsou tedy stále opatrní, co se týče budoucnosti tohoto sektoru.
Nejlépe se daří klasickým technologickým společnostem těžící z poskytování výpočetního výkonu, takzvaný hyperscaleři. Microsoft přidává +1,88 %. V čele poklesu v čipovém sektoru je opět Micron, který odepisuje -6,11 %. Podobně je na tom ARM -8,41 %.
Oproti nim se kapitál opět přelévá do defenzivních titulů. Zde excelují například McDonald +2,6 % či MasterCard +2,4 %. Daří se i realitnímu sektoru, kterému pomáhá vidina nadále se nezvyšujících úrokových sazeb. Lídr na tomto trhu Realty Income přidává slušné 3 %. Vici Properties pak +2,57 %. Opačný efekt to má na cenné kovy, kde zlato odepisuje -1,38 % a bojuje o udržení supportní úrovně 4000 USD.
Geopolitický vývoj v Hormuzském průlivu mírně ustrnul, nelepší se ale ani nehorší. Ropa WTI osciluje kolem nuly a nyní odepisuje -0,67 %.
Index Dow Jones +0,1 % na 52711,63 b.
S&P 500 -0,24 % na 7554,53 b.
Nasdaq Composite -0,84 % na 26048,65 b.
Index S&P 500 -0,24 % na 7554,53 b. Nejsilnější sektory S&P Změna Nejslabší sektory S&P Změna Nezbytná spotřeba +2,3 % Informační technologie -1,7 % Zdravotní péče +2 % Průmysl -0,2 % Reality +1,5 % Utility -0,2 % Nejsilnější akcie S&P Změna Nejslabší akcie S&P Změna Abbott Laboratories (ABT) +11 % Corning (GLW) -10 % Erie Indemnity (ERIE) +9,5 % Sandisk Corp (SNDK) -10 % Cintas Corp (CTAS) +7,1 % Western Digital Corp (WDC) -9,9 % Ingersoll Rand (IR) +6,9 % Seagate Technology Holdings (STX) -8,6 % JB Hunt Transport Services (JBHT) +6,6 % Marvell Technology (MRVL) -8,4 %
Jan Pazourek, Fio banka, a.s.
Key Takeaways Realty Income increased commercial paper capacity to $5.5B from $3B across the U.S. and Europe.O expanded revolving credit facilities to $5.5B, with an accordion feature up to $6.5B.Realty Income's facilities lower drawn borrowing costs by 5 basis points. Realty Income Corporation (O - Free Report) has strengthened its liquidity position, expanding its unsecured multicurrency revolving credit facilities to $5.5 billion from $4 billion, effective July 13, 2026. The REIT also raised its global unsecured commercial paper capacity to $5.5 billion from $3 billion, increasing flexibility for future investments.
The revolving facilities include an accordion option that could lift total borrowing capacity to $6.5 billion, subject to lender commitments. Designed to support growth initiatives in the United States, United Kingdom and continental Europe, the expanded platform gives Realty Income greater capacity to pursue opportunities across multiple property markets and currencies.
Financing terms also improved, with borrowing costs reduced to SOFR plus 80 basis points, five basis points below the previous facilities. Support from a 26-lender syndicate signals institutional confidence in Realty Income’s balance sheet, capital access and investment-grade A3/A- credit ratings amid a selective transaction environment.
The enhanced liquidity supports Realty Income's expansion beyond traditional retail and industrial assets as it broadens its investment strategy. Earlier this month, it formed a programmatic joint venture with Cloud Capital and a global institutional investor targeting hyperscale data centers, a sector benefiting from accelerating demand for artificial intelligence and cloud infrastructure.
The venture’s initial portfolio exceeds $6 billion, with Realty Income committing up to $1.4 billion for a 45% stake in three Northern Virginia hyperscale data centers. By applying its long-term triple-net lease expertise to digital infrastructure, the company is creating another growth channel while diversifying its portfolio and preserving predictable cash flows.
How Are Realty Income's Peers' Balance Sheets Support Growth Plans?Macerich (MAC - Free Report) enhanced its funding flexibility in June 2026, through a forward equity offering of 14 million shares at $23.90 each, with an option for 2.1 million more. The structure allows MAC to lock in pricing while delaying issuance, supporting acquisitions and preserving MAC’s borrowing headroom.
Simon Property Group (SPG - Free Report) issued a €500 million offering of 3.650% unsecured notes due 2031 through its Dutch subsidiary, Simon Global Development B.V. in June 2026. The notes are fully guaranteed by Simon. Proceeds will support general corporate purposes, strengthening the retail REIT’s financial flexibility and overall liquidity.
Realty Income’s Price Performance, Valuation and EstimatesShares of Realty Income have risen 3.3% over the past month, outperforming the broader industry and the S&P 500 Index.
Image Source: Zacks Investment Research
In terms of forward 12-month Price/Earnings (P/E), Realty Income is currently trading at 14.16X, which is at a discount to the industry average of 16.92X.
Image Source: Zacks Investment Research
Realty Income’s estimate revisions reflect a positive trend. The Zacks Consensus Estimate for fiscal 2026 EPS has been revised marginally upward over the past month. The consensus estimate calls for 4% growth year over year.
Image Source: Zacks Investment Research
Currently, Realty Income carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Chasing yield without checking the fine print is how income investors get burned. The safest high-yield dividend stocks share four traits: a long, uninterrupted growth streak, cash flow that comfortably covers the payout, a balance sheet that can absorb a bad cycle, and a business model built on recurring revenue (fee-based pipelines, net leases, or defensive staples). Yield alone is a trap. Yield plus coverage plus consistency is a portfolio.
Using those filters, three names on the NYSE stand out right now. Each pays a high-single-digit or mid-single-digit yield, each has raised the payout for decades, and each generates enough operating cash flow to keep writing checks even when earnings hit an air pocket. Here is the countdown.
3. Universal Corporation Universal Corporation (NYSE:UVV) is the world’s largest leaf-tobacco merchant, and its dividend record is elite: 56 consecutive years of dividend increases, with the quarterly payout just bumped to $0.83 per share. The yield sits at 6.50%.
Safety here is real, but not fortress-grade. Fiscal 2026 was ugly: full-year EPS of $2.64 against a $4.17 consensus, plus a $41.06 million goodwill impairment at the Shank’s ingredients unit and $52.00 million in inventory write-downs on dark air-cured tobacco. Yet operating cash flow of $129.1 million still covered the $81.3 million dividend at 1.59x, and the company refinanced its revolver in December 2025 with roughly $595 million available and maturity extended to December 2030. CEO Preston D. Wigner reiterated the company is “continuing our track record of returning capital to our shareholders.” The dividend is safe. Growth is on hold until tobacco oversupply clears.
2. Enterprise Products Partners Enterprise Products Partners (NYSE:EPD | EPD Price Prediction) is the model of a fee-based midstream MLP. Q4 2025 marked the 27th consecutive year of distribution growth, and the yield today is 5.91%. If you want a monthly income primer, our 7 Monthly Dividend Stocks report is a useful companion read on paycheck-style portfolios.
July 16 is the Final Day to Tap Into the Lithium Boom (sponsor)
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Here's why you should do the same before their July 16 investment deadline: lithium prices are up 75% this year, with demand projected to grow a staggering 5X by 2040.
With tech that can recover up to 3X more lithium than traditional methods, EnergyX is preparing to unlock up to 15M+ tons. Become a private-stage EnergyX investor before the July 16 deadline.
Q1 2026 set 12 operational records, and adjusted EBITDA rose 10% year over year to $2.69 billion. Distributable cash flow hit $2.7 billion, funding the payout, $116 million of buybacks, and $1.5 billion of retained cash. Full-year 2025 operating cash flow was $8.585 billion against a $4.678 billion dividend payout, a coverage profile most REITs would envy. Trading at a 14 P/E with a forward multiple near 13x, EPD offers yield, growth capex, and a beta of just 0.469. The stock is up 28.27% over the past year.
1. Realty Income Realty Income (NYSE:O) earns the top spot on pure consistency. The net-lease REIT known as “The Monthly Dividend Company” has now paid 670 consecutive monthly dividends and delivered its 114th consecutive quarterly increase. The current yield is 5.07%, with the monthly payout at $0.271.
Q1 2026 AFFO rose 6.6% year over year to $1.13 per share, portfolio occupancy stayed at 98.9%, and rent recapture hit 103.4%. Management raised 2026 investment guidance to $9.5 billion from $8.0 billion, and boosted AFFO guidance to $4.41 to $4.44. Net Debt to Annualized Pro Forma Adjusted EBITDAre improved to 5.2x from 5.4x. CEO Sumit Roy called out “the strength and resiliency of our global investment and operating platforms.” With a beta of 0.729, institutional ownership at 80.345%, and shares up 18.46% over the past year, Realty Income combines the highest payment frequency, the longest unbroken monthly record, and the most diversified property base of the group. That is the definition of safe high yield.
The Bottom Line The premise was simple: high yield only counts when the payout is durable. UVV clears the coverage bar despite an operational hangover, EPD backs its 27-year growth streak with fee-based cash flow that dwarfs the distribution, and Realty Income sits at the top with a monthly cadence, aristocrat status, and an underwriting engine that keeps compounding. For income investors who want yield without white-knuckling every earnings report, this is the shortlist to build around.
Meet America's Newest $1b Unicorn (Sponsor) A US startup just passed a $1 billion private valuation, joining billion-dollar private companies like OpenAI and ByteDance. Unlike those other unicorns, you can invest in EnergyX right now; but only until July 16.
Over 50,000 people already have, along with global giants like General Motors and POSCO.
Here's why there's so much interest: EnergyX's patented tech can recover up to 3X more lithium than traditional methods. That's a big deal, as demand for lithium is expected to 5X current production levels by 2040. Become an early-stage EnergyX shareholder before the 7/16 investment deadline.
Do you know you'll need investment income in the future even if you don't need it right now? That's basically what saving for retirement is.
And this simple idea raises a simple question: How much future income can you generate for every dollar you tuck away now? It depends on several factors, including how long you save, and what sort of return you achieve on your growth investments.
Just for some perspective, let's look at what a hypothetical (yet very realistic) $300 monthly investment might be capable of driving in retirement, given enough time.
Crunching the numbers There are actually two key phases to our hypothetical number crunching. The first of these is the growth phase, during which we continually contribute to a fund that remains invested for growth rather than income. In our model, we'll simply invest in the overall market using the SPDR S&P 500 ETF Trust (SPY +0.22%), which is built to mirror the performance of the S&P 500 index (^GSPC +0.26%). Assuming its long-term average annual return of 10% persists, in 30 years -- a fairly typical length for a career -- a $300 monthly investment in this ETF would leave you with a nest egg of $683,797:
Data source: Calculator.net. Chart by author.
Notice that most of the gains materialize in just the last third of this savings period. The trick is just starting the last decade with as much invested capital as possible.
Then the second phase begins. That's the conversion of an investment largely meant for growth into an investment mostly meant to produce income. And here, your options are wide-ranging. Shares of beverage powerhouse Coca-Cola (KO 0.01%), for instance, currently yield 2.5%, and are backed by 64 consecutive years of dividend increases. The Schwab U.S. Dividend Equity ETF (SCHD 0.40%) doesn't have nearly the same history and pedigree, but with its trailing yield of 3.3%, that $683,797 could produce more than $22,000 in annual dividend income.
If your chief concern is simply maximizing your cash flow with dividend payments that at least keep up with inflation, however, a pick like real estate investment trust (REIT) Realty Income (O +0.16%) is a fantastic all-around option. The REIT has not only paid monthly (yes, monthly) dividends like clockwork for decades now, but has raised its per-share payout every year for the past 31 years with an inflation-beating average annual increase of 4.1%.
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Newcomers will be plugging in while its yield stands at 5.1%. At that yield, a $683,797 investment in Realty Income would generate yearly dividend income of $34,873. Not bad.
Small starts will still work, given enough time There are other options, of course. And, you wouldn't want to commit your entire nest egg to a single ticker anyway.
The point is to simply illustrate what's possible -- and not just the sort of reliable dividend income you could achieve once you're done saving for retirement. Just as important is the fact that a relatively modest amount of money tucked away in a growth investment every month can end up being worth far more than you might realize, given enough time.
The chief challenge? Usually, it's just getting started. The sooner you do so, the better.
, /PRNewswire/ -- Realty Income Corporation (Realty Income, NYSE: O) (the "Company"), The Monthly Dividend Company®, announced that it has closed on the recast and expansion of its $5.5 billion multicurrency unsecured revolving credit facilities, upsized from the prior $4.0 billion capacity. In addition, the Company also announced an expanded combined capacity of $5.5 billion for its global commercial paper programs, upsized from the prior $3.0 billion combined capacity.
"Access to efficiently priced capital has long been a competitive advantage for Realty Income, and the increased borrowing capacity enhances our financial flexibility to execute on our strategy and pursue accretive growth opportunities. We are grateful for the continued support of our lending partners," said Jonathan Pong, Realty Income's Chief Financial Officer and Treasurer.
$5.5 Billion Revolving Credit Facilities
Realty Income's revolving credit facilities provide for updated capacity of $5.5 billion with an accordion expansion feature up to $6.5 billion, which is subject to obtaining lender commitments. The revolving credit facilities are bifurcated into two $2.75 billion tranches, which initially mature on April 29, 2029 and July 10, 2030 respectively, before giving effect to two six-month extension options for each facility. Pursuant to the terms of the revolving credit facilities, the Company's current A3 / A- credit ratings provide for a borrowing rate of 67.5 basis points over SOFR for U.S. Dollar borrowings, with a facility commitment fee of 12.5 basis points, for all-in drawn pricing of 80 basis points over SOFR, a reduction of 5.0 basis points from the prior revolving credit facilities.
A total of 26 lenders are participating in the Realty Income revolving credit facilities, including Wells Fargo Bank, National Association, as the Administrative Agent. Wells Fargo Securities, LLC, JPMorgan Chase Bank, N.A., BofA Securities, Inc., Mizuho Bank, Ltd., and TD Bank, N.A. are serving as Joint Bookrunners.
$5.5 Billion Commercial Paper Programs
In conjunction with the closing of the updated revolving credit facilities, Realty Income also expanded its global unsecured commercial paper programs to a total combined capacity of $5.5 billion, including an upsized $2.75 billion U.S. commercial paper program and $2.75 billion European commercial paper program. The notes will be sold under customary terms in the United States and European commercial paper note markets, respectively, and will rank pari passu with all of the Company's other unsecured senior indebtedness, including the Company's outstanding senior notes and borrowings under the Company's multicurrency revolving credit facilities. The Company expects to use its $5.5 billion multicurrency revolving credit facilities as a liquidity backstop for the repayment of notes issued under the programs.
The notes to be offered under the U.S. and European commercial paper programs have not been and will not be registered under the Securities Act of 1933, as amended, and may not be offered or sold in the United States absent registration or an applicable exemption from registration requirements. This press release shall not constitute an offer to sell or the solicitation of an offer to buy the notes under the Company's commercial paper programs.
About Realty Income
Realty Income (NYSE: O), an S&P 500 company, is real estate partner to the world's leading companies®. Founded in 1969, we serve our clients as a full-service real estate capital provider. As of March 31, 2026, we have a portfolio of over 15,500 properties in all 50 U.S. states, the U.K., and eight other countries in Europe. We are known as "The Monthly Dividend Company®" and have a mission to invest in people and places to deliver dependable monthly dividends that increase over time. Since our founding, we have declared 673 consecutive monthly dividends and are a member of the S&P 500 Dividend Aristocrats® index for having increased our dividend for over 31 consecutive years. Additional information about the Company can be found at www.realtyincome.com.
Forward-Looking Statements
This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. When used in this press release, the words "estimate," "anticipate," "assume," "expect," "believe," "intend," "continue," "should," "may," "likely," "plan," "seek," and similar expressions are intended to identify forward-looking statements. Forward-looking statements include discussions of our business, strategy; liquidity and cash flows; plans, and the intentions of management; our platform; financing activities, including issuances under our commercial paper programs; and growth strategies. Forward-looking statements are subject to risks, uncertainties, and assumptions about us which may cause our actual future results to differ materially from expected results. Some of the factors that could cause actual results to differ materially are, among others, our continued qualification as a real estate investment trust; general domestic and foreign business, economic, or financial conditions; competition; fluctuating interest and currency rates; inflation and its impact on our clients and us; access to debt and equity capital markets and other sources of funding (including the terms, structure and partners of such funding); volatility and uncertainty in the credit and financial markets; other risks inherent in real estate, private capital, credit and mezzanine investments, and joint ventures or co-investment ventures including solvency, defaults under leases, bankruptcies, potential liability relating to environmental matters, illiquidity of real estate investments (including rights of first refusal or rights of first offer), and potential damages from natural disasters; impairments in the value of our real estate assets; volatility and changes in domestic and foreign laws and the application, enforcement or interpretation thereof (including with respect to tax laws and rates); property ownership through co-investment ventures, funds, joint ventures, partnerships and other arrangements which, among other things, may transfer or limit our control of the underlying investments; epidemics or pandemics; the loss of key personnel; the threat and outcome of any legal proceedings to which we are a party or which may occur in the future; acts of terrorism and war; the anticipated benefits from mergers, acquisitions, co-investment ventures, funds, joint ventures, partnerships, and other arrangements; and those additional risks and factors discussed in our reports filed with the U.S. Securities and Exchange Commission. Readers are cautioned not to place undue reliance on forward-looking statements. Forward-looking statements are not guarantees of future plans and performance and speak only as of the date of this press release. Past operating results and performance are provided for informational purposes and are not a guarantee of future results. There can be no assurance that historical trends will continue. Actual plans and results may differ materially from what is expressed or forecasted in this press release and forecasts made in the forward-looking statements discussed in this press release might not materialize. We do not undertake any obligation to update forward-looking statements or publicly release the results of any forward-looking statements that may be made to reflect events or circumstances after the date these statements were made or to reflect the occurrence of unanticipated events.
Key Takeaways Realty Income sees Europe as an $8.5T commercial real estate opportunity supporting long-term growth.Europe accounted for nearly half of first-quarter 2026 investments with a 7% initial cash yield.O benefits from euro-denominated financing costs that remain below acquisition yields, supporting spreads. Realty Income’s (O - Free Report) expansion across Europe is becoming an important long-term growth driver, supported by a vast addressable market, attractive acquisition yields and greater geographic diversification.
As of March 31, 2026, the company owned or held interests in 15,571 properties across the United States, the United Kingdom and eight additional European countries, with Europe contributing roughly 20% of the annualized base rent. Management estimates the region represents an $8.5 trillion commercial real estate opportunity, the largest part of its roughly $14 trillion addressable market.
Realty Income invested approximately $1.29 billion in Europe during the first quarter of 2026, nearly matching its U.S. and other market investments of $1.33 billion. European investments generated an initial weighted-average cash yield of about 7% compared with 7.3% in the United States, highlighting the region's ability to deliver competitive returns while accounting for nearly half of quarterly investment activity.
Europe also provides access to a large pipeline of corporate-owned real estate and sale-leaseback opportunities, enabling Realty Income to acquire income-producing assets while helping businesses unlock capital. The company's broad international footprint further diversifies rental income across economies, interest-rate cycles and property markets, supporting stable cash flows.
Realty Income is also expanding beyond traditional acquisitions through development projects, loans, structured investments and joint ventures, creating additional avenues for growth and higher returns. Euro-denominated financing costs remain below acquisition yields, supporting investment spreads. However, currency fluctuations, varying legal frameworks and competition for premium assets remain key challenges.
How Are Realty Income’s Competitors Expanding?Simon Property Group (SPG - Free Report) owns 22.2% of Klépierre, which operates more than 130 shopping centers across 13 European countries. Simon's October 2025 acquisition of the remaining 12% stake in TRG simplified ownership and strengthened its balance sheet. Recent acquisitions, including Phillips Place, Brickell City Centre and outlet assets in Italy, support its focus on high-quality, brand-accretive properties.
Federal Realty Investment Trust (FRT - Free Report) is expanding through acquisitions, redevelopment and joint ventures. FRT targets shopping centers in affluent, supply-constrained U.S. markets. FRT recently acquired properties in Maryland, Kansas, Nebraska and California.
Realty Income’s Price Performance, Valuation and EstimatesShares of Realty Income have fallen 0.8% over the past three months, underperforming the broader industry and the S&P 500 Index.
Image Source: Zacks Investment Research
In terms of forward 12-month Price/Earnings (P/E), Realty Income is currently trading at 13.98X, which is at a discount to the industry average of 16.9X.
Image Source: Zacks Investment Research
Realty Income’s estimate revisions reflect a positive trend. The Zacks Consensus Estimate for fiscal 2026 EPS has been revised marginally upward over the past month. The consensus estimate for 2026 calls for 4% growth year over year.
Image Source: Zacks Investment Research
Currently, Realty Income carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
When you expect your stocks to pay you for holding them, dividend cuts are your worst nightmare. Not only does a dividend cut mean you're losing that passive income, but the stock itself often tanks once a company announces the cut.
Fortunately, investors can avoid picking lousy dividend stocks by focusing on certain traits. An established track record of paying dividends and raising them helps, but it goes beyond that. Companies with safe dividends often operate recession-resistant business models, have healthy financials, and maintain a solid growth trajectory, so their dividends can continue to grow alongside profits.
Realty Income (O 0.12%), Altria Group (MO 1.68%), and PepsiCo (PEP 3.26%) are top-notch dividend stocks that check all these boxes. Buy and hold them to get paid while sleeping well at night.
Image source: Getty Images.
1. One of the market's most dependable real estate stocks Realty Income is one of the world's top real estate investment trusts (REITs). It acquires and leases properties, paying most of its taxable income out to shareholders as non-qualified dividends. Realty Income specializes in single-tenant properties, typically leased to recession-resistant businesses such as grocery and convenience stores. It uses net leases, which place the burden of property taxes, insurance, and maintenance on the tenant.
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That business model has made Realty Income a very dependable dividend stock. The company has increased its dividend at least once annually for over 30 years. That feat is especially impressive when you consider that Realty Income pays a monthly dividend, something most companies don't do. That high level of consistency demonstrates Realty Income's ability to navigate and endure adversity.
Realty Income's dividend still has plenty of financial breathing room. The payout ratio is approximately 73% of its guided 2026 funds from operations, the distributable cash flow that a REIT produces. Realty Income is a slow-and-steady business that has grown its dividend at a low-single-digit annualized rate since its IPO in the 1990s. That said, its 5% dividend yield makes the stock a strong choice for anyone seeking immediate dividend income they can count on.
2. This company continues to prove the doubters wrong The smoking rate in the United States has declined for decades. Yet, Altria Group continues to pay investors more money each year. The tobacco giant is best known for selling Marlboro cigarettes in the U.S. Nicotine's notoriously addictive nature has made Altria a recession-proof business and enabled it to steadily raise its prices to offset the slow volume declines as Americans buy fewer cigarettes each year.
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It's not clear whether that formula can work forever. For now, Altria's dividend remains strong. The company spends 81% of its cash flow on dividends, which isn't a major concern because Altria's business requires little investment. Even advertising is heavily restricted under modern tobacco laws. On top of that, Altria owns a multi-billion-dollar stake in Anheuser-Busch InBev, a chip it can cash in if needed.
Altria's business probably won't grow very quickly until it diversifies away from its core cigarette business. Still, analysts see Altria growing earnings by an average of 4% to 5% annually over the next three to five years. That's plenty of growth to continue inching that dividend higher. Plus, the stock's current 5.8% yield is the highest of the three on this list.
3. This food and beverage giant is dividend royalty Although most people associate PepsiCo with its namesake soda, its Frito-Lay and Quaker Foods segments make it a global food and beverage juggernaut, with iconic brands such as Doritos, Lay's, and Gatorade, just to name a few. People almost assuredly buy at least one PepsiCo product with each trip to the grocery store. The basic need people have to eat and drink makes PepsiCo a very resilient business -- and a Dividend King with over 50 consecutive years of annual dividend increases.
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Admittedly, PepsiCo's dividend payout ratio is a tad high for comfort at 87% of cash flow over the past year. On the other hand, PepsiCo has $10.8 billion in cash on hand and an A+ credit rating with a stable outlook. Investors might see modest dividend increases while the company creates some breathing room for the dividend, but its fortress-like balance sheet makes a dividend cut highly unlikely.
PepsiCo has struggled somewhat in recent years as consumers backed away from spending on name brands. Fortunately, management has already adapted, and some recent acquisitions could help bolster its portfolio. Analysts expect annual earnings growth of 5% to 6% over the next three to five years, solid output for a stock offering a 4% dividend yield right now.
Analyst’s Disclosure: I/we have a beneficial long position in the shares of o either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.
Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.
Realty Income Corp. (O - Free Report) closed at $63.23 in the latest trading session, marking a -1.22% move from the prior day. This change lagged the S&P 500's daily loss of 0.28%. At the same time, the Dow lost 1.09%, and the tech-heavy Nasdaq gained 0.2%.
Shares of the real estate investment trust witnessed a gain of 4.51% over the previous month, trailing the performance of the Finance sector with its gain of 5.35%, and outperforming the S&P 500's gain of 1.64%.
The upcoming earnings release of Realty Income Corp. will be of great interest to investors. The company's earnings report is expected on August 5, 2026. It is anticipated that the company will report an EPS of $1.09, marking a 3.81% rise compared to the same quarter of the previous year. Simultaneously, our latest consensus estimate expects the revenue to be $1.54 billion, showing a 8.98% escalation compared to the year-ago quarter.
For the annual period, the Zacks Consensus Estimates anticipate earnings of $4.45 per share and a revenue of $6.27 billion, signifying shifts of +3.97% and +9.02%, respectively, from the last year.
It is also important to note the recent changes to analyst estimates for Realty Income Corp. Recent revisions tend to reflect the latest near-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the business outlook.
Our research shows that these estimate changes are directly correlated with near-term stock prices. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.
The Zacks Rank system, stretching from #1 (Strong Buy) to #5 (Strong Sell), has a noteworthy track record of outperforming, validated by third-party audits, with stocks rated #1 producing an average annual return of +25% since the year 1988. Over the last 30 days, the Zacks Consensus EPS estimate has witnessed a 0.29% increase. Realty Income Corp. currently has a Zacks Rank of #3 (Hold).
Digging into valuation, Realty Income Corp. currently has a Forward P/E ratio of 14.38. For comparison, its industry has an average Forward P/E of 15.48, which means Realty Income Corp. is trading at a discount to the group.
Meanwhile, O's PEG ratio is currently 4.99. Comparable to the widely accepted P/E ratio, the PEG ratio also accounts for the company's projected earnings growth. The REIT and Equity Trust - Retail was holding an average PEG ratio of 2.6 at yesterday's closing price.
The REIT and Equity Trust - Retail industry is part of the Finance sector. With its current Zacks Industry Rank of 103, this industry ranks in the top 42% of all industries, numbering over 250.
The strength of our individual industry groups is measured by the Zacks Industry Rank, which is calculated based on the average Zacks Rank of the individual stocks within these groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.
Make sure to utilize Zacks.com to follow all of these stock-moving metrics, and more, in the coming trading sessions.
Key Takeaways Realty Income declared its 673rd consecutive monthly dividend, reinforcing its long dividend track record.O posted 6.6% AFFO growth, 98.9% occupancy and a 103.4% rent recapture rate in Q1 2026.Realty Income expanded growth efforts through $2.8 billion in investments and new strategic partnerships. Realty Income (O - Free Report) , popularly known as "The Monthly Dividend Company," has once again reinforced its reputation for dependable income. The real estate investment trust declared its 673rd consecutive monthly dividend, keeping the payout unchanged at 27.10 cents per share. Shareholders of record as of July 31, 2026, will receive the dividend on Aug. 14, 2026. The latest declaration follows the company’s June 9 dividend increase, which raised the monthly payout from 27.05 cents to 27.10 cents and marked its 135th dividend hike since 1994.
On an annualized basis, the dividend now stands at $3.252 per share. Realty Income’s record of more than 31 consecutive years of annual dividend growth has secured its place in the S&P 500 Dividend Aristocrats Index, underscoring its appeal to income-focused investors.
The company's fundamentals continue to support this payout profile. In first-quarter 2026, adjusted funds from operations (AFFO) rose 6.6% year over year to $1.13 per share, while occupancy remained strong at 98.9%. Realty Income also reported a 103.4% rent recapture rate on re-leased properties, highlighting the pricing resilience across its portfolio.
With 15,500 properties across the United States, U.K and eight other European countries, Realty Income benefits from broad diversification and steady rental cash flows. Its $2.8 billion in quarterly investments, $1 billion retail joint venture with Apollo, expanded institutional funding partnerships and planned $1.4 billion push into hyperscale data centers suggest that it is still positioning for growth. The company’s raised 2026 AFFO guidance of $4.41-$4.44 per share further supports the case that Realty Income can retain its edge.
Dividend Appeal of Other Net Lease REITsVICI Properties (VICI - Free Report) remains a dependable pick for investors who value consistent dividend income. The company pays 45 cents per share each quarter or $1.80 annually, while its first-quarter 2026 AFFO per share climbed 4.5%, leading to higher full-year guidance. Since going public in 2018, VICI Properties has delivered annual dividend increases and maintained full portfolio occupancy, reflecting the durability of its long-term lease model.
Agree Realty (ADC - Free Report) also fits the income case, supported by monthly payouts and healthy dividend coverage. The company’s latest payout of 26.70 cents per share translates to $3.204 annually, marking a 4.3% increase from the prior year. First-quarter dividends of Agree Realty consumed only 69% of AFFO, while its portfolio of 2,756 properties and 65% investment-grade tenant exposure provides a solid foundation for stable cash flow.
O’s Price Performance, Valuation and EstimatesShares of Realty Income have gained 13.5% so far this year, underperforming the industry’s growth of 19.3%.
Image Source: Zacks Investment Research
From a valuation standpoint, O trades at a forward 12-month price-to-earnings of 14.15, below the industry but ahead of its one-year median of 13.62. It carries a Value Score of C.
Image Source: Zacks Investment Research
Over the past seven days, estimates for 2026 have been unchanged, while estimates for 2027 FFO per share have been revised slightly upward.
Image Source: Zacks Investment Research
At present, Realty Income carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Stocks with high dividend yields can look very rewarding. Who doesn't like getting 4%, 5%, even 6% or more back on their investment each year, before factoring in capital gains? But these stocks can just as easily woo investors, only for major problems to surface. Next thing you know, a company cuts the dividend, and investors are sitting on steep losses.
It doesn't have to be that way. Some stocks have high dividend yields and strong business fundamentals. These stocks can be game changers for investors looking to boost their portfolios with dividend income.
Here are two top high-yield dividend stocks to buy and hold. They can easily afford their huge dividends, and their compelling price tags make them strong buys for 2026.
Image source: Getty Images.
1. A 6.6% yield and solid earnings growth make Verizon a no-brainer Verizon Communications (VZ +0.95%) is a wireless carrier and one of only three companies that dominate the U.S. communications market. Verizon has approximately 146.8 million wireless retail connections and 16.8 million broadband connections. Connectivity is practically as essential to modern life in America as gas and electric utility service. People depend on their smartphones and devices to communicate, socialize, and work.
As a result, Verizon generates steady revenue streams, making it a fantastic dividend stock. Management has increased the dividend for 20 consecutive years and counting. Importantly, Verizon can afford the payout. Management expects the business to earn at least $21.5 billion in free cash flow this year, which is cash profits left after capital reinvestment. That covers approximately $10 billion of Verizon's total dividend expenditures over the past year.
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Historically, Verizon hasn't grown very fast, but that's starting to change. Connectivity is increasingly important in a world where artificial intelligence (AI) is driving enormous data traffic, and future technologies can require connection to control sources -- autonomous vehicles, for example.
Analysts currently expect Verizon to grow earnings by an average of 8% annually over the next three to five years. That growth and yield make Verizon a table-pounding buy at less than 9 times 2026 earnings estimates.
2. Buy Realty Income for its 5.1% yield and monthly payouts Realty Income (O 0.63%) is one of the world's largest real estate investment trusts (REITs). These are companies that acquire and lease real estate, sharing their income with investors as nonqualified dividends. Realty Income has a global portfolio of 15,571 properties, focusing on retail tenants in recession-resistant industries. Realty Income uses net leases, in which the tenant is responsible for property maintenance, insurance, and taxes. This business model produces very stable rental streams.
Now, here's a sparkling dividend track record. Realty Income has raised its dividend 135 times since going public in 1994, over 31 consecutive years. It also pays a monthly dividend, giving investors steady income year-round.
Last but not least, Realty Income's 2026 guided funds from operations (FFO) per share of $4.41-$4.44 easily covers the $3.25 it has paid out over the past year. Funds from operations are a non-GAAP metric REITs use to quantify their earnings. The FFO coverage leaves a cushion for unexpected downturns, as investors saw during the COVID-19 pandemic.
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Realty Income was never a growth stock; the company's annualized lifetime dividend growth rate is only 4.2%. Management has expanded into new markets in recent years to seek growth opportunities. That has sprinkled some industrial properties, data centers, and casinos into the portfolio.
But make no mistake, Realty Income is a tortoise, not a hare. Fortunately, it doesn't need to be, given that shares trade at only 14 times Realty Income's 2026 FFO guidance. A 5.1% dividend yield is simply icing on the cake.
Realty Income Corp. (O - Free Report) is one of the stocks most watched by Zacks.com visitors lately. So, it might be a good idea to review some of the factors that might affect the near-term performance of the stock.
Shares of this real estate investment trust have returned +4.5% over the past month versus the Zacks S&P 500 composite's +1.6% change. The Zacks REIT and Equity Trust - Retail industry, to which Realty Income Corp. belongs, has gained 1.4% over this period. Now the key question is: Where could the stock be headed in the near term?
While media releases or rumors about a substantial change in a company's business prospects usually make its stock 'trending' and lead to an immediate price change, there are always some fundamental facts that eventually dominate the buy-and-hold decision-making.
Revisions to Earnings EstimatesRather than focusing on anything else, we at Zacks prioritize evaluating the change in a company's earnings projection. This is because we believe the fair value for its stock is determined by the present value of its future stream of earnings.
We essentially look at how sell-side analysts covering the stock are revising their earnings estimates to reflect the impact of the latest business trends. And if earnings estimates go up for a company, the fair value for its stock goes up. A higher fair value than the current market price drives investors' interest in buying the stock, leading to its price moving higher. This is why empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock price movements.
Realty Income Corp. is expected to post earnings of $1.09 per share for the current quarter, representing a year-over-year change of +3.8%. Over the last 30 days, the Zacks Consensus Estimate remained unchanged.
For the current fiscal year, the consensus earnings estimate of $4.45 points to a change of +4% from the prior year. Over the last 30 days, this estimate has changed +0.3%.
For the next fiscal year, the consensus earnings estimate of $4.6 indicates a change of +3.3% from what Realty Income Corp. is expected to report a year ago. Over the past month, the estimate has changed +0.3%.
With an impressive externally audited track record, our proprietary stock rating tool -- the Zacks Rank -- is a more conclusive indicator of a stock's near-term price performance, as it effectively harnesses the power of earnings estimate revisions. The size of the recent change in the consensus estimate, along with three other factors related to earnings estimates, has resulted in a Zacks Rank #3 (Hold) for Realty Income Corp..
The chart below shows the evolution of the company's forward 12-month consensus EPS estimate:
12 Month EPS
Revenue Growth ForecastWhile earnings growth is arguably the most superior indicator of a company's financial health, nothing happens as such if a business isn't able to grow its revenues. After all, it's nearly impossible for a company to increase its earnings for an extended period without increasing its revenues. So, it's important to know a company's potential revenue growth.
For Realty Income Corp., the consensus sales estimate for the current quarter of $1.54 billion indicates a year-over-year change of +9%. For the current and next fiscal years, $6.27 billion and $6.78 billion estimates indicate +9% and +8.2% changes, respectively.
Last Reported Results and Surprise HistoryRealty Income Corp. reported revenues of $1.55 billion in the last reported quarter, representing a year-over-year change of +12.2%. EPS of $0.33 for the same period compares with $1.06 a year ago.
Compared to the Zacks Consensus Estimate of $1.5 billion, the reported revenues represent a surprise of +3.36%. The EPS surprise was +2.73%.
Over the last four quarters, Realty Income Corp. surpassed consensus EPS estimates two times. The company topped consensus revenue estimates each time over this period.
ValuationWithout considering a stock's valuation, no investment decision can be efficient. In predicting a stock's future price performance, it's crucial to determine whether its current price correctly reflects the intrinsic value of the underlying business and the company's growth prospects.
While comparing the current values of a company's valuation multiples, such as price-to-earnings (P/E), price-to-sales (P/S), and price-to-cash flow (P/CF), with its own historical values helps determine whether its stock is fairly valued, overvalued, or undervalued, comparing the company relative to its peers on these parameters gives a good sense of the reasonability of the stock's price.
The Zacks Value Style Score (part of the Zacks Style Scores system), which pays close attention to both traditional and unconventional valuation metrics to grade stocks from A to F (an A is better than a B; a B is better than a C; and so on), is pretty helpful in identifying whether a stock is overvalued, rightly valued, or temporarily undervalued.
Realty Income Corp. is graded C on this front, indicating that it is trading at par with its peers. Click here to see the values of some of the valuation metrics that have driven this grade.
ConclusionThe facts discussed here and much other information on Zacks.com might help determine whether or not it's worthwhile paying attention to the market buzz about Realty Income Corp.. However, its Zacks Rank #3 does suggest that it may perform in line with the broader market in the near term.
The multi-year outperformance of growth stocks is primarily driven by massive multiple expansion, pushing tech to historic, fragile valuation heights. A long-range look back to 1979 proves that value and growth have historically achieved similar returns, following completely non-correlated paths. The emotional weight of watching a hyper-growth portfolio endure a 90% contraction routinely drives young participants to exit the capital markets entirely.
, /PRNewswire/ -- Realty Income Corporation (Realty Income, NYSE: O), The Monthly Dividend Company®, today announced that it has declared its 673rd consecutive common stock monthly dividend. The dividend amount of $0.2710 per share, representing an annualized amount of $3.252 per share, is payable on August 14, 2026 to stockholders of record as of July 31, 2026.
About Realty Income
Realty Income (NYSE: O), an S&P 500 company, is real estate partner to the world's leading companies®. Founded in 1969, we serve our clients as a full-service real estate capital provider. As of March 31, 2026, we have a portfolio of over 15,500 properties in all 50 U.S. states, the U.K., and eight other countries in Europe. We are known as "The Monthly Dividend Company®" and have a mission to invest in people and places to deliver dependable monthly dividends that increase over time. Since our founding, we have declared 673 consecutive monthly dividends and are a member of the S&P 500 Dividend Aristocrats® index for having increased our dividend for over 31 consecutive years. Additional information about the company can be found at www.realtyincome.com.
Forward-Looking Statements
This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. When used in this press release, the words "estimate," "anticipate," "assume," "expect," "believe," "intend," "continue," "should," "may," "likely," "plan," "seek," and similar expressions are intended to identify forward-looking statements. Forward-looking statements include discussions of our business, strategy, plans, and the intentions of management including dividends and the amount, timing and payment thereof. Forward-looking statements are subject to risks, uncertainties, and assumptions about us which may cause our actual future results to differ materially from expected results. Some of the factors that could cause actual results to differ materially are, among others, our continued qualification as a real estate investment trust; general domestic and foreign business, economic, or financial conditions; competition; fluctuating interest and currency rates; inflation and its impact on our clients and us; access to debt and equity capital markets and other sources of funding (including the terms, structure and partners of such funding); volatility and uncertainty in the credit and financial markets; other risks inherent in real estate, private capital, credit and mezzanine investments, and joint ventures or co-investment ventures, including solvency, defaults under leases, bankruptcies, potential liability relating to environmental matters, illiquidity of real estate investments (including rights of first refusal or rights of first offer), and potential damages from natural disasters; impairments in the value of our real estate assets; volatility and changes in domestic and foreign laws and the application, enforcement or interpretation thereof (including with respect to tax laws and rates); property ownership through co-investment ventures, funds, joint ventures, partnerships and other arrangements which, among other things, may transfer or limit our control of the underlying investments; epidemics or pandemics; the loss of key personnel; the threat and outcome of any legal proceedings to which we are a party or which may occur in the future; acts of terrorism and war; and the anticipated benefits from mergers, acquisitions, co-investment ventures, funds, joint ventures, partnerships and other arrangements; and those additional risks and factors discussed in our reports filed with the U.S. Securities and Exchange Commission. Readers are cautioned not to place undue reliance on forward-looking statements. Forward-looking statements are not guarantees of future plans and performance and speak only as of the date of this press release. Past operating results and performance are provided for informational purposes and are not a guarantee of future results. There can be no assurance that historical trends will continue. Actual plans and results may differ materially from what is expressed or forecasted in this press release and forecasts made in the forward-looking statements discussed in this press release may not materialize. We do not undertake any obligation to update forward-looking statements or publicly release the results of any forward-looking statements that may be made to reflect events or circumstances after the date these statements were made or to reflect the occurrence of unanticipated events.
Realty Income and Janus Henderson AAA CLO ETF provide attractive, AI-insulated income streams with strong risk mitigation. O offers a 5.1% yield, an investment-grade balance sheet, an 8.7-year average lease maturity, and defensive monthly income with embedded growth. JAAA delivers a 5.4% yield from AAA CLO tranches, offering de-risked, technology-light exposure and a superior yield to T-bills.
A worker earning $80,000 full time who wants to drop to a 20-hour-a-week role paying roughly $40,000 faces one math problem: the portfolio must generate the missing $40,000 a year. Bridge income can be built across several yield tiers, and the choice between them determines how much capital is required, how much risk is assumed, and how durable the income may prove over time.
What $40,000 in Dividend Income Actually Costs The equation: income divided by yield equals required capital.
3.5% yield: about $1.14 million ($3,333 per month). Dividend-growth blue chips and aristocrat ETFs. Lowest current income, highest long-term durability. 5% yield: $800,000 ($3,333 per month). Net-lease REITs, utility-heavy income funds, investment-grade preferreds. Yield rises, growth slows. 7% yield: about $571,000 ($3,333 per month). High-dividend equity funds, some BDCs, and preferred-stock funds. Income is generally more sensitive to credit conditions and interest-rate cycles than lower-yield approaches. 10% yield: $400,000 ($3,333 per month). Mortgage REITs, leveraged covered-call funds, high-yield bond funds. Lowest capital required, highest risk of NAV erosion and distribution cuts. The conservative tier includes Johnson & Johnson (NYSE:JNJ), which just raised its quarterly payout to $1.34 for a 64th straight year of increases, and Procter & Gamble (NYSE:PG), on its 70th consecutive annual hike. NextEra Energy (NYSE:NEE) yields in the upper-2% range but has grown its payout substantially over the past several years. The moderate tier centers on Realty Income (NYSE:O), paying a monthly dividend and yielding roughly 5%. The aggressive tier includes higher-yield securities such as Altria (NYSE:MO), mortgage REITs, and covered-call funds, many of which offer yields well above the broader market.
Buying Back Half Your Week Twenty hours reclaims a full waking day plus an afternoon. That time goes to aging parents, a child’s final years at home, a side business, or travel without burning vacation days. Surveys show many workers want control of the calendar, not full retirement. The portfolio funds that control.
The Hidden Cost of Going Part-Time Cutting hours often reduces or eliminates employer-subsidized health insurance, full 401(k) matching, long-term disability coverage, group life insurance, and pension accrual. For workers who must replace employer health coverage before Medicare eligibility, costs can be substantial, although ACA subsidies may reduce the expense depending on income and household size. Before moving part-time, estimate the value of lost benefits and add that amount to your income-replacement target.
Social Security at Half Pay Social Security uses your highest 35 years of indexed earnings. Workers with many years of strong earnings often discover that reducing income late in their careers has a smaller effect on future benefits than expected, particularly if lower-earning years are already part of the calculation. However, the impact varies by work history, so check your Social Security statement before making the switch.
Why a Growing 3.5% Often Beats a Flat 10% Run two portfolios paying $40,000 today. Portfolio A starts at 3.5% with 7% annual dividend growth. Portfolio B starts at 10% with none. By year 10, A throws off about $78,700 a year. By year 20, A generates roughly $154,000 while B still pays $40,000. Inflation steadily reduces the purchasing power of flat income streams, while dividend growth can help offset rising costs. Historical performance from companies such as Johnson & Johnson and NextEra Energy illustrates how growing earnings and dividends can contribute to long-term compounding, although future results may differ.
Half Retirement vs. the Hard Stop Three paths exist: full retirement at 65, part-time from 60 to 70, or work to 70. The middle path stretches benefits, lets Social Security grow toward delayed credits, keeps you in employer health coverage longer, and reclaims years that many people still spend in relatively good health. For many middle-income households with a meaningful portfolio, it can provide an appealing blend of income, flexibility, and quality of life.
When Full-Time Still Wins Stay full time if you have a defined-benefit pension still accruing meaningfully, a generous match you have not maxed, peak earning years ahead, or a portfolio under roughly $400,000. Subsidized healthcare alone can be worth $20,000+ a year in pre-Medicare hands.
Three Actions This Month Audit actual spending, not salary. Many earners spend $55,000 of an $80,000 paycheck. The replacement target may be far below $40,000. Price the 10-year total return of a dividend-growth basket against a 10% yield fund. Look at distributions plus NAV. The growth side usually wins on a real-dollar basis. Model the tax and healthcare bill in your bracket. Qualified dividends, ACA subsidy cliffs, and state income tax all change what $40,000 of dividend income actually deposits in your account. Contact [email protected] for any questions or corrections.
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Medicare is not free, and the bill arrives every month for the rest of your life. The standard Part B premium in 2026 is $202.90 per month, which works out to roughly $2,435 a year per enrollee. Add Part D, a Medigap policy, and the occasional out-of-pocket charge, and most retirees end up writing checks closer to $5,000 a year per person for healthcare coverage they already “earned.”
How much capital, parked in income-producing investments, would cover that bill forever without touching principal?
The bill that never retires Retirees pay off mortgages. They sell the second car. Commuting costs vanish. Medicare premiums do not. They are deducted directly from Social Security, they rise almost every year, and they continue until death. The 2026 Part B premium jumped $17.90 from $185.00 in 2025, a roughly 10% increase in a single year, while the 2026 Social Security COLA came in at 2.8%. Healthcare inflation eats COLA for breakfast.
The math at three yield levels Using a $5,000 annual target (Part B plus Part D plus a modest Medigap plan), here is what the principal looks like:
3.5% yield needs about $143,000 in capital. This is the dividend-growth range. Think Johnson & Johnson (NYSE:JNJ | JNJ Price Prediction), which just raised its quarterly payout to $1.34, marking 64 straight years of increases. The current yield sits near 2.2%, but the income compounds. 5% yield needs about $100,000. Realty Income (NYSE:O) pays monthly, currently $0.2705 a share, with a yield around 5.2%. NextEra Energy (NYSE:NEE) sits lower at 2.7% but is guiding to 10% dividend growth through 2026. 10% yield needs about $50,000. This is business development company, mortgage REIT, and covered-call ETF territory. The income is loud, the principal often shrinks. What freed-up cash actually buys Medicare premiums rarely feel expensive because they arrive a little at a time. Yet eliminating a $5,000 annual healthcare bill frees up money for things people actually notice. It can fund weekend trips, holiday travel, charitable giving, birthday gifts for grandchildren, dining out, hobbies, or the property tax bill on a paid-off home. Retirement often improves one recurring expense at a time, and Medicare is one of the largest recurring expenses most households face.
Why low yield often wins over twenty years Compare two portfolios sized to throw off $5,000 today.
Portfolio A: $143,000 at 3.5% yield, growing the payout 7% a year. Procter & Gamble (NYSE:PG) is the archetype, with 70 consecutive annual increases and a history reaching back to 1890. In ten years that $5,000 stream becomes roughly $9,800. In twenty, around $19,300.
Portfolio B: $50,000 at 10% yield, flat. Year one and year twenty both pay $5,000. Meanwhile, CPI has been running at roughly 0.5% a month, and healthcare inflation typically outpaces headline CPI. The bill keeps climbing while the check does not.
From Part B to the whole healthcare line item Part D adds another $40 to $70 a month for most enrollees, Medigap plans run $150 to $250, and the $283 Part B deductible resets every January. High earners with modified adjusted gross income above $109,000 individual or $218,000 joint pay IRMAA surcharges on top. A growing income stream that starts by covering Part B will, ten years out, cover most of the rest.
When this is the wrong project Earmarking six figures for Medicare premiums is the wrong call if you are 82 with limited assets, if you have higher-yield debt to retire, or if you need the cash for an upcoming surgery, a roof, or long-term care. Dedicated income portfolios reward time. Without it, the math does not pencil.
Three things to do this week Pull your last twelve months of Medicare expenses, not just Part B. That is your real target number. Compare the ten-year total return of a 3.5%-yielding dividend grower against a 10%-yielding income fund. The compounding gap is usually larger than expected. If you are within five years of enrolling, model IRMAA at your projected income bracket before you convert a traditional IRA to a Roth. Many retirees think of retirement income as one giant number. In practice, it is often easier to think in smaller pieces. First cover Medicare. Then utilities. Then property taxes. Over time, the portfolio stops feeling like an account balance and starts feeling like a quiet bill-paying machine.
Contact [email protected] for any questions or corrections.
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A $750,000 portfolio at a 5% yield produces $37,500 a year. That is the number most dividend investors repeat. It is also the number they never actually deposit, because the IRS, Medicare, and the state they retired to all get paid first.
Here is the gross math at four common yield levels on a $750,000 portfolio: $26,250 at 3.5%, $37,500 at 5%, $52,500 at 7%, and $75,000 at 10%. The income tier you target determines the investment category, the tax character of the distributions, and ultimately what lands in your checking account.
Gross Yield vs. Grocery Money Retirees spend what survives federal tax, state tax, Medicare Part B and D premiums, and IRMAA surcharges. Two portfolios paying the same $40,000 can produce very different spendable income depending on what type of income they generate and where it is held.
Why Tax Character Drives the Outcome Qualified dividends from most U.S. corporations are generally taxed at the long-term capital gains rates of 0%, 15%, or 20%, provided IRS holding-period requirements are met. Ordinary dividends, REIT distributions, BDC payouts, and most covered-call ETF income are generally taxed at ordinary income rates, which in 2026 range from 10% to 37%. Treasury interest is generally exempt from state and local income tax but remains taxable at the federal level. Municipal-bond interest may be exempt from federal income tax and, in some cases, state tax as well.
Johnson & Johnson (NYSE:JNJ | JNJ Price Prediction) illustrates the qualified-dividend case. The quarterly payout rose to $1.34 in Q1 2026, putting the annualized rate near $5.36. Against a recent price of $228, the yield runs roughly 2.2%, but JNJ has raised its dividend for 64 consecutive years. NextEra Energy (NYSE:NEE) sits in similar territory: quarterly dividend of $0.6232, an annualized rate of $2.49, and a yield near 2.7%. Both produce qualified dividends.
Realty Income (NYSE:O) is the contrast. The monthly REIT pays $0.2705, annualizing to $3.246 per share, a yield around 5.2%. Higher headline yield, but most REIT distributions are taxed as ordinary income, although the exact tax treatment can vary from year to year.
The IRMAA Trap Medicare’s Income-Related Monthly Adjustment Amount uses a two-year lookback on modified adjusted gross income. A retiree generating $75,000 of ordinary income from a high-yield portfolio may find that dividends, combined with Social Security, pensions, IRA withdrawals, or capital gains, push MAGI into an IRMAA bracket. Once that happens, surcharges apply to both Part B and Part D premiums. Cross a higher band and the surcharge climbs again. The math gets ugly fast: a few thousand dollars of additional income can sometimes trigger a disproportionately large increase in Medicare costs, erasing much of the advantage the investor was seeking.
Where You Live Matters Three retirees receive the same $37,500 in annual dividends. One lives in Nevada, which has no state income tax. Another lives in New Jersey, where investment income generally remains taxable even though many retirement benefits receive favorable treatment. The third lives in Minnesota, which taxes dividend income and carries a higher overall tax burden than many retirement destinations. Same portfolio. Different grocery money.
Asset Location Changes the Answer Hold JNJ or NEE in a taxable brokerage and qualified-dividend rates apply. Hold Realty Income in that same taxable account and the distributions hit ordinary rates. Move the REIT into a Traditional IRA and the tax disappears until withdrawal, when everything becomes ordinary. Put it inside a Roth and properly held distributions come out untaxed. The general rule: ordinary-income payers (REITs, BDCs, bond funds, covered-call ETFs) belong in tax-advantaged accounts; qualified-dividend growers can sit comfortably in taxable.
When the Higher Tax Bill Is Worth It Some retirees rationally accept the tax drag. A widow with no pension and limited Social Security may need the $52,500 from a 7% portfolio more than she needs efficiency. Estate planners sometimes prefer current income to fund gifts. Investors who value simplicity often pick one high-yield fund over a tax-optimized basket. The tradeoff is conscious.
Three Things to Do This Quarter Map your MAGI against IRMAA brackets before adding yield. The next surcharge tier may cost more than the incremental dividend earns. Separate qualified payers from ordinary distributors by account. JNJ and NEE in taxable, Realty Income and any preferred or BDC sleeves in IRAs. Compare ten-year total return of a dividend grower against a flat 10% yielder. A 3.5% yield growing 8% annually doubles its income in roughly nine years. A 10% yield with no growth stays flat, often while the principal erodes. Contact [email protected] for any questions or corrections.
Albert Einstein called compound interest the eighth wonder of the world, quipping, "He who understands it, earns it... he who doesn't... pays it." Investing in dividend-paying stocks is one way to capitalize on the wonders of compounding. Investors who reinvest their dividends in a company that grows its payout can earn enriching returns.
Realty Income (O +3.15%) prides itself on paying dependable, growing monthly dividends. Here's a look at whether the real estate investment trust (REIT) can help you compound your investment into future riches.
Image source: Getty Images.
A compounding machine Realty Income has been a terrific dividend stock over the years. The REIT has increased its monthly payment 135 times since its public market listing in 1994, including the past 115 consecutive quarters. It has grown its dividend at a 4.1% compound annual rate during that three-decade period.
Investors who reinvested their dividends have earned a robust 13.6% compound annual return from the REIT since 1994. To put that return into perspective, an investor who bought $25,000 of Realty Income stock in 1994 would have seen that initial investment grow to nearly $1.2 million.
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Can Realty Income continue to compound? While Realty Income has clearly made investors rich through compounding since it went public, that past performance doesn't guarantee it will deliver similar results in the future. Here's a realistic look at how the REIT might perform over the next several decades.
Realty Income currently pays a dividend yield of more than 5%. That high-yielding payout provides a very sustainable base return. Realty Income generates very stable income from its diversified portfolio of net-leased real estate. Meanwhile, the REIT has a conservative dividend payout ratio (around 70%) and one of the strongest balance sheets in the sector. That gives it the financial strength to continue investing in growing its portfolio of income-producing real estate, which is the key to increasing its dividend.
The REIT has historically grown its adjusted funds from operations (AFFO) per share at a 5% annual rate through a combination of rent growth and new investments, supporting its 4.1% compound annual dividend growth rate. Realty Income has been positioning itself to deliver higher future growth through a series of strategic initiatives. It has formed several strategic private capital partnerships that should accelerate AFFO per share growth through capital-light revenue, such as management fee income. The REIT is also forming strategic partnerships to capitalize on the large, fast-growing data center segment. These initiatives could enable the REIT to grow its AFFO at a mid-to-high single-digit rate in the future.
With a 5%+ current yield and the potential to deliver 5%+ annual AFFO per share growth in the future, Realty Income could produce a more than 10% annualized total return (assuming no change in its valuation multiple). That level of return could certainly make you rich through long-term compounding. For example, if you invested $5,000 into Realty Income each year and it delivered an average annual return of 11%, the REIT could grow your investment to over $1.1 million in 30 years.
An enriching dividend stock Realty Income has made long-term investors rich by steadily growing its monthly dividend. The REIT is in a strong position to continue compounding shareholder value going forward, driven by its new strategic capital partnerships and data center investments. That makes it a great dividend stock to buy and hold long-term, as it should steadily create more wealth for shareholders.
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Retirement changes the arithmetic of investing. When earned income disappears, portfolio cash flow has to replace it, and the timing matters as much as the total. A stock that pays once a year forces retirees to budget around a single deposit; a monthly payer aligns with mortgages, utilities, groceries, and insurance premiums that arrive on their own schedule.
That is why monthly dividend payers hold a distinct appeal for income investors. Rental real estate offers something similar in theory, but landlords deal with vacancies, repairs, property taxes, and the illiquidity of a physical asset. A publicly traded REIT delivers the underlying rent stream in a form that can be bought, sold, or reinvested with a single click, and the tenants, taxes, and maintenance are somebody else’s problem.
We screened our 24/7 Wall St. dividend equity research database, looking for stocks that pay massive dividends, and we found a collection of companies that, combined, can generate over $5,000 a year in passive annual income if you invest just $100,000 in each stock at the time of this writing.
Realty Income Yield: 5.09% Shares for $100,000: 1,566 Annual Passive Income: $5,094 (roughly $424 per month) Realty Income (NYSE:O | O Price Prediction) is a net lease REIT that owns more than 15,000 commercial properties across the United States, the United Kingdom, and continental Europe, with expansion into Mexico underway through a partnership with GIC.
Tenants sign long-duration net leases and cover taxes, insurance, and maintenance, which leaves Realty Income collecting a predictable rent stream from a diversified base spanning retail, industrial, gaming assets like Bellagio and Encore Boston, and other property types. The portfolio was 98.9% occupied at the end of Q1 2026, with a 103.4% rent recapture rate on re-leased space.
The Monthly Dividend stock The dividend is elevated because REITs must distribute at least 90% of taxable income to shareholders to preserve their tax status. Realty Income has turned that requirement into a brand: the company has declared 670 consecutive monthly dividends and just delivered its 114th consecutive quarterly increase.
The most recent monthly rate is $0.271 per share, ex-dividend June 30, 2026, payable July 15, 2026, which annualizes to roughly $3.252 per share. At a recent price of $63.84, that works out to a yield near 5.09%, comfortably above the 4.48% yield on the 10-year Treasury.
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The underlying business is doing the work to support that payout. AFFO per share rose to $1.13 in Q1 2026, up 6.6% year-over-year, and management raised full-year AFFO guidance to $4.41 to $4.44 while lifting 2026 investment guidance to $9.5 billion from $8 billion.
New capital is going in at a 7.1% initial cash yield, and a $1 billion partnership with Apollo covering 492 retail properties, plus a $1.7 billion cornerstone raise for the U.S. Core Plus fund, has broadened permanent capital sources beyond the public equity market.
Institutions own 79.4% of the float, with Vanguard, BlackRock, and State Street among the largest holders, and the company repurchased 1.8 million shares for roughly $101.9 million in January 2026 alongside a convertible note offering.
A $100,000 position in Realty Income at $63.84 buys about 1,566 shares and produces roughly $5,094 in annual income at the current $3.252 annualized rate, or about $424 arriving in the account every month. That is a blended yield near 5.09% from a single position with 670 consecutive monthly payments behind it.
Monthly cash flow compounds differently than quarterly cash flow. Reinvested twelve times a year instead of four, each distribution buys fractional shares that begin paying the next month, and the schedule maps neatly onto the recurring bills that dominate retirement budgets.
For investors who want the economics of commercial real estate without the phone calls from tenants, a monthly payer with a global net lease portfolio is one of the cleanest ways to convert a lump sum into a paycheck.
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Many retirees spent forty years sacrificing for their children. Then retirement arrives and they’re told, “You’ve earned it. Spend it.” The problem is that every vacation, new car, home renovation, or generous dinner can feel like it comes directly out of what the next generation might someday receive. Few parents want to live frugally just to maximize an inheritance. Just as few want to enjoy retirement so freely that there’s little left when they’re gone. The challenge is finding a portfolio that lets both goals exist at the same time.
Anchoring the Problem in a Real Number The Bureau of Labor Statistics pegs average annual expenditures for all consumer units at $78,535 in 2024. Round that to $80,000 a year. It is not intended to represent every retiree. Instead, it serves as a reasonable benchmark for a retirement that includes more than paying the bills. A portfolio that can reliably generate about $80,000 annually should be capable of funding a comfortable lifestyle while giving the underlying capital a chance to remain intact. That makes it a useful test of whether enjoying retirement and leaving an inheritance can truly coexist.
The Inheritance Test Many portfolios can throw off $80,000 for a while. The harder standard is whether the principal survives the ride. A 65-year-old who lives to 90 has 25 years of inflation to absorb. Core PCE inflation was still running above the Federal Reserve’s 2% target in May 2026, the 10-year Treasury yielded 4.44% on June 30, and the FDIC’s national average 12-month CD rate was 1.65% in June. That is the backdrop against which every yield choice has to be made.
Tier One: The 3.5% Portfolio That Grows With You At a 3.5% blended yield, funding $80,000 a year requires about $2.29 million. That is the largest capital number in this article, and it is also the portfolio most likely to hand your children more than you started with.
The building blocks are dividend growth stalwarts. Johnson & Johnson (NYSE:JNJ | JNJ Price Prediction) yields about 2% but just declared its 64th consecutive annual dividend increase, raising the payout to $1.34 per quarter. Its shares are up 175% over the past decade. Procter & Gamble (NYSE:PG) yields 2.9%, has raised its dividend 70 consecutive years, and has grown its quarterly payout from about $0.32 in 1999 to $1.09 today. Add a regulated utility such as NextEra Energy (NYSE:NEE), which yields 2.6%, targets 8%+ annual EPS growth through 2032, and has returned 244% over ten years, and you own a portfolio that pays you today and pays your heirs more later.
Tier Two: The 6% Middle Ground Move the blended yield to roughly 6% and the capital requirement drops to about $1.33 million. This is REIT, preferred share, and higher-yielding equity territory. Realty Income (NYSE:O) is the flagship example, yielding 5.2%, paying monthly, and having just declared its 114th consecutive quarterly increase. The tradeoff is real: dividend growth slows, capital appreciation is modest (47% over a decade versus JNJ’s 175%), and the income line barely outruns inflation.
Tier Three: The 10% Portfolio That Spends Itself Push blended yield to 10% using business development companies, mortgage REITs, and leveraged covered call funds, and $80,000 requires only $800,000. Main Street Capital (NYSE:MAIN), one of the highest-quality BDCs, yields 5.9% with regular supplementals pushing total distributions higher. It has delivered 238% over ten years, but shares are also down roughly 10% year to date as benchmark rates fell. That volatility is the point. Above 8%, distributions frequently include return of capital, NAVs drift lower, and the portfolio slowly liquidates itself. The check clears; the estate shrinks.
What Often Wins the Inheritance A 3.5% yield growing 7% a year doubles the income in about 10 years, and the underlying shares may appreciate as earnings and cash flow grow alongside the dividend. A 10% yield growing zero stays flat in nominal dollars and shrinks in real terms when inflation persists. Over a 25-year retirement, that difference can mean the portfolio not only generates enough income to support a comfortable lifestyle, but also preserves or even grows the underlying principal, leaving $1 million, $2 million, or more for the next generation instead of steadily spending it away.
Make the Income Plan Pass the Inheritance Test Separate your spending number from your salary. If you actually spend $65,000, funding $80,000 may push you toward more yield risk than you need. The inheritance plan starts with the real spending gap after Social Security, pensions, taxes, and cash reserves.
Stress-test total return, not just yield. Compare a dividend-growth basket against a double-digit-yield fund over the same period, including reinvested dividends, taxes, dividend cuts, and ending portfolio value. The annual check matters, but the inheritance test depends on what remains after the checks are cashed.
If leaving money to heirs matters, weight the conservative tier and use the moderate tier as income ballast. Reserve the aggressive tier for the portion of the portfolio you are willing to spend down or see fluctuate sharply. That does not make high yield unusable. It makes position size the inheritance decision. A retirement portfolio built only to fund spending can look very different from one built to leave money behind. The first asks whether the checks clear. The second asks whether the checks clear and the principal still has a future. When inheritance matters, yield is not just an income number. It is a promise the portfolio has to keep for both generations.
Contact [email protected] for any questions or corrections.
Realty Income (O +3.15%) is one of the best dividend stocks you can buy. It has a high yield of 5.2% at the current price, which is incredibly reliable and has been raised for 115 consecutive quarters. That's nearly 29 years. It recently announced its 135th increase since it went public in 1994.
The company is known as the Monthly Dividend Company because of another unusual feature for a dividend stock, even a top one -- it pays monthly. And it has paid the dividend for 672 months, or 56 years.
Let's break down how much you actually get with a $10,000 investment.
Image source: Getty Images.
At today's price, $10,000 in Realty Income is 161 shares. With the latest increase, the monthly dividend is $0.2710 per share, and 161.75 shares get you a monthly check of $43.83. On a monthly basis, that doesn't sound like very much, but it amounts to $526.01 annually, or more than $1,052 every two years. Plus, since the dividend is raised every quarter, the total amount increases.
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On its own, that's not enough passive income to support anyone in retirement. But it's an excellent, reliable source of passive income as part of a much larger, diversified retirement portfolio.
Jennifer Saibil has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Realty Income. The Motley Fool has a disclosure policy.
Retirement is often imagined as the season of life when you finally have time for the things you always wanted to do: fishing, gardening, quilting, photography. The reality is that hobbies require more than free time. They require money. Some retirees discover that after paying for housing, healthcare, insurance, and groceries, there is not much left for the activities they spent years looking forward to. Others find themselves taking part-time jobs to fund the hobbies retirement was supposed to make possible.
Planning for a hobby portfolio addresses both problems. It can provide the income needed to pay for the activity itself while also reducing the need to trade retirement hours for extra income. The goal is not simply funding a hobby. It is creating the freedom to enjoy it.
The Hobby Budget, Translated Into Capital The equation is simple: annual hobby cost divided by yield equals the capital you need parked in income-producing assets. Three hobbyists, four yield tiers:
Hobby Budget 3.5% yield 5% yield 7% yield 10% yield $5,000 (fishing, quilting, photography, gardening) $142,857 $100,000 $71,429 $50,000 $10,000 (golf, RV travel, horseback riding, art retreats) $285,714 $200,000 $142,857 $100,000 $20,000 (classic cars, aviation, boats, extensive travel) $571,429 $400,000 $285,714 $200,000 For reference, the 10-year Treasury sits near 4.5%, so anything above that is compensation for credit, equity, or call-writing risk.
Hobbies Need More Than Money A retiree who takes a 10-hour-per-week job to cover hobby costs surrenders about 520 hours a year. Push it to 15 hours and the toll climbs near 750. The financial side of retirement freedom is one half of the equation. Time is the other, and the part-time paycheck quietly converts hobby years into work years.
Buying Back Ten Hours Per Week Median full-time pay sits around $1,235 a week, which implies roughly $30 an hour. A part-time retirement gig pays less, but the math holds. At a 5% blended portfolio yield, replacing the paycheck requires:
$10,000 income: $200,000 in capital, returning 520 hours per year. $15,000 income: $300,000 in capital, returning 520 hours per year. $20,000 income: $400,000 in capital, returning 520 hours per year. What 500 Hours Looks Like Five hundred hours is more than sixty full eight-hour days. It is roughly 125 rounds of golf, 80 fishing trips, a season of quilting or painting classes, hundreds of hours in a woodworking shop or garden, a major genealogy project, or a full RV season across the national parks. Recreation is already a real budget line for households: recreation services spending hit $864.2 billion in April 2026. The hours are the scarcer resource.
The Hobby Portfolio A retiree funding a $10,000 golf habit, RV hobby, horseback-riding program, or series of art retreats and replacing a $15,000 part-time job needs $25,000 in portfolio income. At 5% that is $500,000. At 7% it drops to about $357,000. The portfolio is doing two jobs: paying the greens fees and reclaiming the Tuesday morning tee time.
The Evidence: Building the Income The conservative tier pulls from dividend-growth compounders. NextEra Energy (NYSE:NEE | NEE Price Prediction) yields about 2.7% with management targeting roughly 10% dividend growth, and the stock returned 25% over the past year. Procter & Gamble (NYSE:PG) yields 2.8% backed by 70 consecutive annual raises. Coca-Cola (NYSE:KO) pays 2.6%, and Johnson & Johnson yields 2.2% with 64 straight years of increases.
The moderate tier raises the current cash. Realty Income (NYSE:O) pays monthly at a 5.3% yield on a portfolio that is 98.9% occupied. Verizon yields 6.0% with a forward P/E of 9.
The aggressive tier (8% to 12%) lives in covered-call equity funds, business development companies, mortgage REITs, and high-yield bond funds. The current income is generous, but distributions can be cut and principal often erodes.
The trap is choosing yield over growth. A 3.5% yield growing 8% annually doubles in about nine years; a flat 10% payout often shrinks the underlying capital. Over a 20-year hobby horizon, the slower starter usually wins.
What to Do Next Add your annual hobby budget to your current part-time income. That combined number is the income the portfolio actually has to replace. Run the capital figure at 3.5%, 5%, and 7% before assuming a 10% strategy. The conservative number often surprises people who priced only the hobby. Compare a decade of total return on a dividend-growth name like NextEra against a flat high-yield product to see how compounding changes the answer. Contact [email protected] for any questions or corrections.
Six months into 2026, the boring stuff is winning. The SPDR S&P Dividend ETF (NYSEARCA:SDY) is up 12.57% year to date, while the iShares Expanded Tech-Software ETF is down 11.4% over the same stretch. That is a wide gap between dividend aristocrats and enterprise software. SDY, the plain-vanilla index of companies that have raised dividends for 20-plus consecutive years, has quietly outrun the sector everyone assumed would carry the market.
What SDY owns and how it makes money SDY holds the S&P High Yield Dividend Aristocrats Index, weighted by yield rather than market cap. The top slots read like an insurance policy against excitement. Verizon (NYSE:VZ | VZ Price Prediction) sits near 2.2%, Realty Income (NYSE:O) at 2.15%… and so on. Utilities, energy, consumer staples, and one big monthly-paying REIT. The return engine is dividends plus modest capital appreciation from companies that grow earnings slowly and reliably. Expense ratio is 0.35%, defensible for the yield-weighted methodology.
Realty Income exemplifies what SDY does at the holding level. It yields 5.2%, pays monthly, and just delivered its 114th consecutive quarterly dividend increase. The stock is up 12.54% YTD. Nobody writes novels about triple-net lease REITs, but the check clears every month.
The SaaS downturn and recovery SDY is lapping software because software fell into a hole in Q1 and is still climbing out. When Anthropic launched Claude Cowork and OpenAI shipped Operator in January and February, investors panicked that AI agents would cannibalize per-seat SaaS licensing. The iShares Expanded Tech-Software ETF fell as much as 20-30% peak-to-trough, with Salesforce (NYSE:CRM) down 28% YTD and Adobe (NASDAQ:ADBE) down about 34%. Estimates of destroyed market cap ran into the trillions.
Software staged a ferocious comeback. The tech-software ETF is up 8.32% in the past week alone and has clawed back much of the Q1 damage by June. The AI-kills-SaaS thesis has partly reversed. But the initial drawdown was severe enough, even after the rally. Software rescued itself, but not in 2026.
SDY is winning by not participating. The correct framing is smoother ride versus roller coaster. NVIDIA (NASDAQ:NVDA) is up just 2.6% YTD.
The tradeoffs The obvious one is opportunity cost. If software’s June rally continues through year end, SDY’s lead compresses fast. Over five years, SDY has returned 43% against the software ETF’s 20%, but over ten years software crushed it, 348% versus 148%. Aristocrats do not compound like winners of secular technology waves.
The second tradeoff is interest-rate sensitivity. With the 10-year Treasury at 4.44% and Fed funds parked at 3.75% since December 11, 2025, dividend equities compete directly with risk-free coupons. If yields pop back toward the May high of 4.67%, SDY holdings like utilities and REITs feel it first. The third is concentration in old-economy sectors, which look like ballast when inflation runs above 4% and look like anchors when growth reaccelerates.
Who this fits SDY makes sense as a 10-20% core holding for investors who want dividend growth without the concentration risk of picking individual aristocrats, and who have made peace with lagging in bull markets.
If you already own a broad S&P 500 index and want defensive income tilted toward the yield-weighted end of the aristocrat universe, SDY does the job at reasonable cost. For readers chasing YTD leadership or betting the software comeback has more room to run, SDY is not the vehicle. The reason SDY is beating software right now is precisely the reason it will trail when the roller coaster is climbing.
Contact [email protected] for any questions or corrections.
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The average new vehicle in the United States now costs roughly $49,000, with full-size pickups and many luxury models pushing far higher. That puts a quietly absurd idea within reach for people who think in terms of dividend income: building a portfolio that throws off enough cash every year to buy a new car without forcing a share sale. The math is simple. The choices behind it are harder.
Why Most People Never Do This For most Americans, buying a new car every year would make little financial sense. New vehicles lose value rapidly in their first few years, and modern cars are more reliable than ever, making it common for owners to keep them for eight years or longer. Financing costs, insurance, registration fees, and taxes also make frequent replacement an expensive habit. For drivers who simply want a new vehicle on a regular basis, leasing is often a more economical way to achieve the same result.
Still, a small group of buyers does trade into a new vehicle every year. Some simply enjoy driving the latest models, while business owners, luxury lessees, and high-income households may value the newest technology, safety features, warranty coverage, or tax advantages enough to justify the cost. Whether that behavior is wise is a separate question. The thought experiment is useful because it asks what it would take to make even an extravagant recurring expense sustainable through investment income alone.
The $50,000 Question Replacing the cost of a new car every year means generating roughly $50,000 in pretax distributions. Consumers actually spend at this scale in aggregate: personal consumption expenditures on motor vehicles and parts were running near a $750 billion annualized pace in early 2026. The benchmark for whether a yield is “worth it” sits near the 4.4% yield on the 10-year Treasury. Anything below that needs to justify itself with growth. Three yield tiers produce the same $50,000 income from very different capital bases.
Tier One: The Slow, Sturdy Garage (3% to 4%) At a 3.5% yield, $50,000 divided by 0.035 requires roughly $1,428,000 in capital. This is the territory of dividend-growth blue chips and the Aristocrats and Kings: companies that raise their payouts every year, sometimes for half a century.
Johnson & Johnson (NYSE:JNJ | JNJ Price Prediction) just lifted its quarterly dividend 3% to $1.34, its 64th straight annual increase. Coca-Cola (NYSE:KO) pays $0.53 a quarter, up from $0.16 in 1999. PepsiCo carries a 4.1% yield and a 54-year raise streak, paying $1.48 per share this quarter.
The tradeoff is capital. You need close to $1.4 million. The reward is that next year’s car payment grows on its own.
Tier Two: The Middle Lane (5% to 7%) At a 6% blended yield, the bill drops to about $833,000. This tier leans on net-lease REITs, regulated utilities, preferred shares, and high-dividend equity funds.
Realty Income (NYSE:O) currently yields 5.2%, pays monthly, and just declared its $0.271 June distribution, with portfolio occupancy at 98.9% and 2026 AFFO guidance of $4.41 to $4.44. NextEra Energy yields less, around 2.7%, but is guiding to roughly 10% dividend growth this year. Stack them with quality preferreds or a covered-call equity fund and a 6% blend is reachable.
Distributions in this tier grow slower, and many of these vehicles cap upside in exchange for current income.
Tier Three: The Fast Lane (8% to 14%) At a 10% yield, $500,000 funds the new car. This is the realm of business development companies, mortgage REITs, leveraged covered-call funds, and high-yield bond funds.
Main Street Capital (NYSE:MAIN), a BDC, pays $0.26 monthly plus a $0.30 quarterly supplemental, with non-accruals at 1.2% of fair value. Yield: about 6.1% on the regular payout, higher with supplementals. Other vehicles in this tier print double-digit yields, but distributions can be cut in recessions and principal often erodes over time.
The Compounding Trap Most Buyers Miss Here is what the brochure for the aggressive tier never shows you: yield is only one part of total return. A fair comparison has to use the same time period, the same reinvestment assumption, and adjusted returns that include dividends. Some high-yield holdings can outperform, but the payout only helps if it is not offset by stagnant income, distribution cuts, or principal erosion.
More important: CPI rose 4.2% over the 12 months ending in May 2026. A new car in 2046 will not cost $50,000 if vehicle prices keep rising over time. A 3.5% payout growing 6% annually doubles in roughly 12 years. A flat 10% payout can buy more today, but it loses purchasing power if the income never grows.
Make the Dividend Engine Match the Car Bill Decide which car problem you are solving. A new car every year for decades requires growing income, which points toward a larger dividend-growth core. Maximum cash flow in the next five years points toward the aggressive tier, with the understanding that the payout may be less durable.
Run the total-return comparison yourself on a dividend-growth fund against a high-yield BDC or covered-call fund. Use the same time period and include reinvested dividends, taxes, and principal changes. The compounding gap is the core argument.
Model the tax bill. Qualified dividends from names like J&J, Coca-Cola, and PepsiCo may receive preferential federal rates when IRS holding-period rules are met. REIT and BDC distributions are often largely ordinary income, though the final tax character can vary by year. That difference can quietly erase a meaningful slice of the car money in a high bracket.
The portfolio that buys a new car every year is real, but the version built to last looks different from the version built for maximum cash flow right now. A double-digit yield can shrink the capital requirement on paper. A growing dividend stream is what gives the plan a chance to keep up when the $50,000 car becomes a much more expensive car.
Contact [email protected] for any questions or corrections.
Realty Income (O +2.64%) has been an extraordinarily consistent dividend stock over the years. The real estate investment trust (REIT) has increased its monthly dividend 135 times since its public market listing in 1994, including the last 115 consecutive quarters. The REIT has grown its payout at a healthy 4.1% compound average annual rate during that period.
While its dividend growth rate has slowed in recent years (1.8% year-over-year in the first quarter), I predict it will accelerate over the coming decade. One catalyst is the REIT's pivot to data centers. Given the massive investment opportunity in the space, it could supercharge Realty Income's growth.
Image source: Getty Images.
Partnering to build a platform Realty Income made its inaugural investment in the data center space in late 2023 by forming a built-to-suit data center development joint venture (JV) with leading data center REIT Digital Realty (DLR 0.44%). Realty Income initially invested $200 million to acquire an 80% interest in the JV, which was building two data centers in Northern Virginia. The partners are funding their pro rata share of the remaining $150 million in development costs (80% Realty Income and 20% Digital Realty). Digital Realty had already pre-leased 100% of the capacity to a high-quality tenant under a 10-year term with 2% annual rent escalators. The tenant has the option to expand the capacity from 16 megawatts (MW) to 48 MW, which would increase the budget to $800 million.
That investment got Realty Income in on the ground floor of the data center sector, with a top-notch partner, offering built-in growth from lease escalations and expansion opportunities. The REIT is now taking another step to build out its data center investment platform by forming a strategic JV with Cloud Capital and a global institutional investor to invest in hyperscale data centers. It intends to invest in a diversified portfolio of stabilized hyperscale data centers leased to high-quality tenants under triple-net leases with 15 to 20-year terms across the U.S. and Europe.
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Realty Income initially expects to invest up to $1.4 billion in the JV, funding it over time, with initial investments of $700 million to be made in the second and third quarters of this year. As part of the deal, Realty Income will acquire a 45% interest in the first asset, a stabilized hyperscale data center in Northern Virginia. It will also acquire similar interests in two other data centers under development in the future. The REIT can invest more money in the future on qualifying data center developments and acquisitions in the U.S. and Europe.
A large and growing investment opportunity Realty Income has been steadily diversifying its portfolio over the years to expand its investable universe. It entered the data center segment in 2023 because they represented a large ($500 billion in the U.S.) and growing market opportunity.
That opportunity set appears poised to grow significantly over the coming decade. Hossein Fateh, the founder and CEO of Cloud Capital, stated in the JV announcement press release that "hyperscale customers need infrastructure delivered at unprecedented scale and pace." That's providing Cloud Capital and Realty Income with the opportunity to invest capital at scale to capitalize on this massive opportunity. According to an estimate by McKinsey, the world will need to spend $1.5 trillion on data centers built to handle traditional IT applications by 2030 and another $5.2 trillion on those capable of handling AI applications. It's a massive capital investment that companies can't fund on their own, which is why they're turning to third-party capital providers, such as institutional investors and REITs, to help fund the build-out. Given the massive data center capital needs, Realty Income should have plenty of opportunities to continue investing in the sector over the coming decade.
This pivot should pay big dividends over the coming decade Realty Income is forming another partnership to invest in data centers. That's enabling it to invest more capital in this massive, rapidly expanding sector. I expect that these and future data center investments will accelerate the REIT's growth in the coming decade, positioning it to deliver faster dividend growth. That makes it a top dividend stock to buy and hold long term, as Realty Income should deliver strong dividend growth and total returns over the next decade.
Realty Income (NYSE:O | O Price Prediction) just paid investors again. The monthly check dividend landed on schedule, the streak extended and the market continued treating shares like a melting ice cube. That disconnect is the opportunity.
Realty Income declared its latest monthly dividend of 27 cents per share with an ex-dividend date of June 30 and a payment date of July 15. That is the 670th consecutive monthly dividend and follows the 114th consecutive quarterly increase. The stock currently yields roughly 5%. The story the market is telling with that yield (retail REITs are toxic, net lease is broken, e-commerce wins) is the wrong story.
The 5% Yield Is a Verdict Income investors get conditioned to celebrate fat yields. They should not. A high yield is the market discounting the future cash stream, and for most of the past two years that discount has been aimed squarely at retail-anchored landlords. The 10-Year Treasury currently sits at 4%, leaving Realty Income’s payout at roughly a 1% spread over the risk-free rate.
That is a tight cushion for a company whose tenants the market apparently believes are one recession away from going dark. But the operating data does not support that thesis.
What the Operating Data Actually Says Q1 2026 AFFO per share came in at $1.13, up 7% year over year. Portfolio occupancy stood at 99%. The lease recapture rate hit 103%, meaning the company re-leased space at higher rents than it was getting before. Realty Income invested $2.8 billion in the quarter at a 7% initial cash yield, and management raised full-year investment guidance to $9.5 billion from $8.0 billion.
Those are the operating metrics of a healthy, productive asset class. The macro backdrop agrees: U.S. retail sales hit $763.7 billion in May 2026, the highest reading of the trailing 12 months and the 92nd percentile of the period. Consumers are spending. Realty Income’s tenants — including Dollar General, 7-Eleven, Walgreens and Wawa — sit on the receiving end of that spending.
The Payout Math the Doomsayers Ignore Detractors point to a P/E ratio of 52 and argue the dividend is uncovered. That is a misread of how REITs work. The relevant denominator is AFFO, not GAAP EPS. 2026 AFFO guidance of $4.41 to $4.44 against an annualized dividend of $3.246 works out to a payout ratio in the low 70s. That is comfortable. The forward P/E of 40 also accounts for the depreciation distortion that always inflates REIT trailing earnings multiples.
Net debt to annualized pro forma adjusted EBITDAre fell to 5.2x from 5.4x. Credit ratings sit at A3 from Moody’s and A- from S&P. The company just priced $800 million of 4.750% notes due 2033 and a €600 million Eurobond at 4%. Toxic borrowers do not get that paper at those prices.
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The Market Is Already Quietly Reversing While the “retail REITs are dead” narrative persists in headlines, the stock is voting differently. Realty Income is up 17% over the past year and 14% year to date. That outpaces the Real Estate Select Sector SPDR ETF (NYSEARCA:XLRE), which gained 13% over the same one-year window. Shares closed at $63.04 on June 29, 2026, after a 4% one-week move.
News sentiment is also turning. Of 50 recent articles, 48% scored somewhat-bullish and only 2% somewhat-bearish. Wall Street currently holds three Strong Buy ratings, five Buy ratings and 15 Hold ratings alongside an average price target of $67.90.
The Dividend Scorecard Grading this dividend the way an income investor should:
Yield: ~5%, with a 1% spread over the 10-Year Treasury. Adequate. Coverage: AFFO payout ratio in the low 70s against $4.41 to $4.44 guided AFFO. Strong. Growth streak: 114 consecutive quarterly increases and 670 consecutive monthly payments. Best in class. Growth rate: Monthly payout rose from 26 cents in June 2025 to 27 cents in June 2026. Modest but positive. Balance sheet: 5.2x net debt to EBITDAre, A-rated credit. Strong. Composite grade: A-
The only deduction is the modest dividend growth rate, which reflects deliberate capital allocation discipline rather than weakness.
What CEO Sumit Roy Is Actually Building CEO Sumit Roy used the Q1 call to reframe the business as a private-capital aggregator with a public dividend wrapper. The Apollo partnership put $1.0 billion of insurance capital into 492 retail properties. The GIC partnership added construction financing capacity. The U.S. Core Plus fund closed a $1.7 billion cornerstone capital raise.
Roy’s own framing: “Several years ago, we identified a potential concentration risk in relying primarily on public equity markets, where pricing, at times, can become disconnected from underlying operating performance and this discrepancy persists for prolonged periods.” Translation: management knows the stock is mispriced and is building around the public market rather than waiting for it to catch up.
What to Watch Next The next dividend declaration will likely tick higher again. The next earnings report will test whether the $9.5 billion investment pace is holding and whether the lease recapture rate stays above 100%. If 10-Year Treasury yields keep drifting lower from the recent 5% May peak, the discount the market applied to retail REITs starts to look even more anachronistic. The market called this dividend stream toxic. The check that just cleared says otherwise.
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Finding good dividend stocks isn't too tall a task. Finding dividend stocks you can feel good about buying and holding forever, however, is a different story. The world is constantly changing. Companies that are firing on all cylinders today may be irrelevant tomorrow.
But there are some businesses that are just built to last, and to pay a reliable dividend as long as they do. Realty Income (O 0.12%) is one of those businesses.
Image source: Getty Images.
Built tough It's not exactly a household name, although it's likely that you or someone in your household regularly steps into one of its properties. Realty Income is a real estate investment trust (REIT), and as such, it owns a portfolio of commercial real estate that it rents to other companies. Realty Income's specialty is brick-and-mortar retailing.
At first blush, this seems risky. The so-called retail apocalypse is still underway, after all. Realty Income is largely defying it, though. With top-20 tenants like Dollar General, FedEx, Home Depot, and Walmart, this REIT is reliably able to maintain occupancy rates in excess of 98%. Even during pandemic-riddled 2020, its full-year occupancy only slipped to 97.9%.
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This resiliency is translating into ultra-reliable monthly dividends and dividend growth for shareholders. Not only has the company paid a monthly dividend like clockwork since its founding in 1969, but it has also raised its per-share payout every quarter since 1998.
And by more than a little. Over the past 10 years, its monthly payment has improved from $0.2115 per share to $0.2710. This dividend growth paired with the stock's capital appreciation has produced a compound average annual return of 13.6% since Realty Income was listed on the New York Stock Exchange in 1994.
Willing and able to adapt, too It's possible that the traditional brick-and-mortar retailing sector could continue deteriorating under the weight of e-commerce's proliferation, to the point where even rock-solid Realty Income starts to struggle. Meanwhile, higher interest rates are a temporary headwind.
But while that's possible, it's not likely. There's plenty of consumer-facing retailing that will never quite work online, and to the extent online shopping poses a threat to the business, many of Realty Income's tenants like Walmart also have e-commerce operations to go with their brick-and-mortar segments. Or they are businesses like FedEx that benefit from online shopping's continued growth.
Even so, concerned investors should know that Realty Income's management is testing the waters of other markets, including artificial intelligence (AI) infrastructure by partnering with AI data center owner/operator Digital Realty on new facilities. While this isn't a significant business yet, Realty Income's willingness to entertain obvious opportunities is encouraging.
Even more encouraging is that Realty Income doesn't need to rush into these new markets. It can take its time, since its well-established retailing portfolio remains a reliable cash cow. This sort of well-managed flexibility ultimately translates into longevity.
James Brumley has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Digital Realty Trust, Home Depot, Realty Income, and Walmart. The Motley Fool recommends FedEx. The Motley Fool has a disclosure policy.
, /PRNewswire/ -- Realty Income Corporation (Realty Income, NYSE: O), The Monthly Dividend Company®, today announced it will release its second quarter 2026 operating results after the New York Stock Exchange closes on August 5, 2026. Following publication of this earnings release, the company will host its quarterly investor call at 2:00 p.m. PDT.
To access the conference call, dial (833) 816-1264 (United States) or (412) 317-5632 (International). When prompted, please ask for the Realty Income conference call.
A telephone replay of the conference call can also be accessed by calling (855) 669-9658 (United States) or (412) 317-0088 (International) and entering the conference ID 5929348. The telephone replay will be available through August 12, 2026.
A live webcast will be available in listen-only mode by clicking on the webcast link on the company's homepage at www.realtyincome.com. A replay of the conference call webcast will be available approximately one hour after the conclusion of the live broadcast. No access code is required for this replay.
About Realty Income
Realty Income (NYSE: O), an S&P 500 company, is real estate partner to the world's leading companies®. Founded in 1969, we serve our clients as a full-service real estate capital provider. As of March 31, 2026, we have a portfolio of over 15,500 properties in all 50 U.S. states, the U.K., and eight other countries in Europe. We are known as "The Monthly Dividend Company®" and have a mission to invest in people and places to deliver dependable monthly dividends that increase over time. Since our founding, we have declared 672 consecutive monthly dividends and are a member of the S&P 500 Dividend Aristocrats® index for having increased our dividend for over 31 consecutive years. Additional information about the company can be found at www.realtyincome.com.
Forward-Looking Statements
This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. When used in this press release, the words "estimate," "anticipate," "assume," "expect," "believe," "intend," "continue," "should," "may," "likely," "plan," "seek," and similar expressions are intended to identify forward-looking statements. Forward-looking statements include discussions of our business strategy, plans, and the intentions of management. Forward-looking statements are subject to risks, uncertainties, and assumptions about us, which may cause our actual future results to differ materially from expected results. Some of the factors that could cause actual results to differ materially are, among others, our continued qualification as a real estate investment trust; general domestic and foreign business, economic, or financial conditions; competition; fluctuating interest and currency rates; inflation and its impact on our clients and us; access to debt and equity capital markets and other sources of funding (including the terms, structure and partners of such funding); volatility and uncertainty in the credit and financial markets; other risks inherent in real estate, private capital, credit and mezzanine investments, and joint ventures or co-investment ventures, including solvency, defaults under leases, bankruptcies, potential liability relating to environmental matters, illiquidity of real estate investments (including rights of first refusal or rights of first offer), and potential damages from natural disasters; impairments in the value of our real estate assets; volatility and changes in domestic and foreign laws and the application, enforcement or interpretation thereof (including with respect to tax laws and rates); property ownership through co-investment ventures, funds, joint ventures, partnerships and other arrangements which, among other things, may transfer or limit our control of the underlying investments; epidemics or pandemics; the loss of key personnel; the threat and outcome of any legal proceedings to which we are a party or which may occur in the future; acts of terrorism and war; the anticipated benefits from mergers, acquisitions, co-investment ventures, funds, joint ventures, partnerships, and other arrangements; and those additional risks and factors discussed in our reports filed with the U.S. Securities and Exchange Commission. Readers are cautioned not to place undue reliance on forward-looking statements. Forward-looking statements are not guarantees of future plans and performance and speak only as of the date of this press release. Past operating results and performance are provided for informational purposes and are not a guarantee of future results. There can be no assurance that historical trends will continue. Actual plans and results may differ materially from what is expressed or forecasted in this press release and forecasts made in the forward-looking statements discussed in this press release might not materialize. We do not undertake any obligation to update forward-looking statements or publicly release the results of any forward-looking statements that may be made to reflect events or circumstances after the date these statements were made or to reflect the occurrence of unanticipated events.
Key Takeaways Realty Income formed a joint venture to invest in stabilized hyperscale data centers with long-term leases.O plans up to $1.4B for the venture, with about $700M of initial funding in Q2 and Q3 2026.Realty Income will first acquire a 45% stake in a fully leased Northern Virginia hyperscale data center. Realty Income Corporation (O - Free Report) is expanding its presence in the data centers through a new joint venture with Cloud Capital, its affiliates, and a global institutional investor. The venture will target stabilized hyperscale assets leased to investment-grade tenants under long-term triple-net leases.
The first move is the planned acquisition of three data center assets in key markets. Realty Income will initially acquire a 45% stake in the first asset, a fully leased hyperscale data center in Northern Virginia’s “data center alley,” one of the most active data center markets in the United States.
The company expects to invest up to $1.4 billion in the venture over time, with about $700 million of initial funding planned for the second and third quarters of 2026. The structure gives Realty Income room to pursue additional qualifying data center developments and acquisitions in the United States and Europe.
The deal also fits Realty Income’s broader push beyond traditional retail real estate. Its investor presentation lists data centers as part of a roughly $14 trillion total addressable market across core and high-growth sectors, and notes existing exposure through a build-to-suit joint venture with Digital Realty.
Realty Income enters this expansion with scale behind it. As of March 31, 2026, the company owned 15,571 properties, served 1,786 clients across 92 industries, had a 98.9% occupancy rate and generated about $5.2 billion in annualized base rent, giving it a large platform for this newer asset class.
How Are Other Retail REITs Partnering?Simon Property Group (SPG - Free Report) is using partnerships to widen its retail ecosystem, combining ownership stakes, platform investments and brand alliances to drive traffic, redevelopment and mixed-use demand. Its ties with Catalyst, Rue Gilt Groupe and Jamestown support its retail, e-commerce and real estate capabilities. In first-quarter 2026, total portfolio NOI rose 6.7%.
Kimco Realty (KIM - Free Report) partnership approach centers on capital-light growth through joint ventures, institutional relationships and structured investments that expand its grocery-anchored, mixed-use platform without overburdening the balance sheet. These arrangements support residential densification, redevelopment and higher-yield financing opportunities across U.S. markets. In the first quarter of 2026, Kimco invested $76.4 million in structured investments.
O’s Price Performance, Valuation and EstimatesShares of Realty Income have gained 8.5% in the past six months, underperforming the industry’s growth of 21%.
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From a valuation standpoint, O trades at a forward 12-month price-to-FFO of 13.71, below the industry but ahead of its one-year median of 13.60. It carries a Value Score of C.
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Over the past 30 days, estimates for O’s 2026 FFO per share have been revised upward to $4.45, while estimates for 2027 have been revised upward to $4.59.
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Realty Income currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Note: Anything related to earnings presented in this write-up represents funds from operations (FFO) — a widely used metric to gauge the performance of REITs.
