For our January Issue of The Van Buren Report, [O] Realty Income Corp. was selected as the Dividend Stock Pick of the Month. At the time, the stock was trading at $26.71 and now closed up 4% today to $34.38 a share for a nice 28% return in just under 4 months. That is not including the juicy 5% yield that gives a dividend of $1.72 per share.
[O] Realty Income Corp. is a REIT that gives back a majority of its earnings to shareholders. When we originally recommended this stock, the company had major growth opportunities as well as offering solid and safe income. With the real estate market slowly turning around [O] Realty Income is still a great play despite it being near its 52 week high.
Take a further look at this Real Estate Trust which we think is the best REIT on the market today.
As a promotion, we are giving away free issues of our May 2010 Van Buren Report Newsletter which details 9 new picks in 9 different areas each and every month. If you would like a free issue just e-mail CustomerService@VanBurenReport.com with “May Issue” in the subject line and we will send you a free copy within 48 hours.
Here is our article from January 2010’s Van Buren Report Newsletter:
Dividend Stock of the Month
Realty Income Corp [O]
What the Company Does
Realty Income Corporation, The Monthly Dividend Company, is organized to operate as an equity real estate investment trust (REIT). The primary business objective of the REIT is to generate dependable monthly cash distributions from a consistent and predictable level of funds from operations (FFO) per share. The Company’s monthly distributions are supported by the cash flow from the portfolio of retail properties leased to regional and national retail chains. The Company have in-house acquisition, leasing, legal, retail and real estate research, portfolio management and capital markets expertise.
History
The company was founded in 1969 and is based in Escondido, California.
The Good
Realty Income Corporation [O] is a real estate investment trust (REIT). If you are not sure what that is please see the definition here [a corporation that invests the shareholders' money in real estate and loans for real-estate development]. This company is run conservatively and has good history on its side. This company will be around for a long time and is perhaps the best way to play the real estate recovery that is going to happen in the next two to three years. The company has many long term leases that will protect it against any second wave of real estate trouble or another slowdown in the economy. With gobs of cash on hand and little debt for a real estate trust, the company has impressively increased its dividend every year even during the current recession. The company also pays its dividend monthly so there is another bonus for this shareholder friendly company.
The Bad
While somewhat protected with its long term lease strategy, another slowdown in the economy coupled with the rising of long term interest rates could cut into Realty Income Corporations profits severely. REIT’s also have some tax disadvantages as well so be sure you know the ins and outs before you possibly make any purchase.
The Lowdown
Realty Income Corporation is an excellent way to play any future real estate boom. In the meantime, if you do make a purchase, enjoy the safe juicy yield currently at over 6%.
Company Info
Realty Income Corp.
600 La Terraza Boulevard
Escondido, CA 92025
Phone: 760-741-2111
Fax: 760-741-2235
Web Site: http://www.realtyincome.com
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