The article argues that Realty Income (NYSE: O), a REIT with over 15,500 properties, has lagged the S&P 500: its stock fell 7% over the past 10 years while the index gained 260%, and its total return with reinvested dividends was 49% versus 325%. Its underperformance is attributed to constant share issuance, which increased its share count by 264% over the decade, and to vulnerability to rising interest rates. BDCs such as Ares Capital (NASDAQ: ARCC) lend to middle-market companies at floating rates that generally benefit from higher rates, and Ares offers a 10.3% forward yield and a 210% total return over the past decade. However, BDCs must distribute most earnings and also issue new shares, so they may struggle to beat the S&P 500 over the long run. The article suggests BDCs may suit income-focused investors more than those seeking long-term compounding.
Summary written by Upside AI from the original article. Read the source for full details.
Original headline: Should You Forget Realty Income and Buy a BDC Instead ?
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- Realty Income Has Raised Its Dividend Through Every Market Crash Since 1997 . Should Income Investors Still Buy It ?
Realty Income (NYSE: O), a REIT leasing single-tenant net-leased properties, has raised its dividend at least once a year since its 1994 listing and got through the 1997, 2000 and 2008 crises. It owns nearly 15,600 properties with occupancy of almost 99%, and tenants include Home Depot, Dollar Tree and Wynn Resorts. The annual dividend is about $3.26 per share, a yield of around 5.9% versus 1.1% for the S&P 500, and trailing FFO of $4.27 per share covers it. The P/E of 41 looks high, but the price-to-FFO ratio is only about 13, and the stock has fallen about 18% from its March high as the 10-year Treasury hit a 24-year high. The article argues the stock suits income investors seeking safety, while noting rising rates and the P/E as risks.
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Mizuho cut its price target on Realty Income (NYSE: O) from $61.00 to $59.00 and kept a neutral rating. Shares opened at $55.30, below the 50-day moving average of $58.29 and the 200-day average of $61.22, and near the 52-week low of $53.15. In the latest quarter, the REIT reported EPS of $1.09, in line with estimates, and revenue of $1.55 billion, above the $1.40 billion expected and up 9.7% year over year. The company set 2026 EPS guidance at 4.440-4.450, and declared a monthly dividend of $0.2715, a 5.9% yield on an annualized basis. According to MarketBeat, analysts' consensus rating is 'Moderate Buy' with an average price target of $72.34.
- Should You Forget Realty Income and Buy a BDC Instead ?
The article asks whether income investors should swap Realty Income, a REIT with over 15,500 properties and a 5.8% forward yield, for a business development company (BDC). Over the past 10 years, Realty Income's stock fell 7% while the S&P 500 gained 260%, and its total return with reinvested dividends was 49% versus 325% for the index; the article attributes this to constant share issuance, which raised its share count 264% over the decade, and to sensitivity to rising rates. BDCs lend to middle-market companies at higher rates than banks, so rising rates generally boost their net interest income, though excessive rates can cause borrowers to default. The article highlights Ares Capital (ARCC), the largest BDC, with a $29.3 billion portfolio across 619 companies, a 10.3% forward yield, and 16 years of continuous dividends. However, it argues BDCs will still struggle to beat the S&P 500 over the long run because they distribute most of their earnings and regularly issue new shares.
- I Just Bought More Realty Income (O) Stock. Here's How Many Shares It Takes to Collect $1,000 a Month.
The author bought six more Realty Income (O) shares, bringing the holding to 113, and calculates that about 3,583 shares would be needed to earn roughly $1,000 in monthly dividends, a position worth over $206,250 at the recent $56 share price. Realty Income currently pays $0.2715 per share each month, its 676th consecutive monthly dividend over more than 56 years, with a recent yield of about 5.8%. The author points to the REIT's diversified portfolio of long-term net-leased properties, its A-rated balance sheet and nearly $1 billion in annual adjusted free cash flow as support for the dividend. He treats it as a core income holding to anchor his retirement, while acknowledging he will probably never reach $1,000 a month from this stock alone.
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The article highlights five dividend stocks from consumer staples, REITs, energy and pharmaceuticals: Altria Group (MO), AGNC Investment (AGNC), Energy Transfer (ET), Pfizer (PFE) and Realty Income (O), with trailing 12-month dividend yields ranging from 5.88% to 16.72% as of Oct. 14. Pfizer is noted for an 88-year consecutive dividend streak and paid $9.8 billion in cash dividends in 2025, Altria has a 57-year record of higher dividends, and Realty Income has raised its payouts for 116 straight quarters. The article warns that AGNC's dividend could be at risk from a rising interest-rate environment. It also stresses that dividends are not guaranteed and that yields can fall as share prices rise.
- Realty Income ( NYSE : O ) Stock Price Target Cut by Mizuho
Mizuho cut its price target on Realty Income (NYSE:O) from USD 61.00 to USD 59.00 and kept a 'neutral' rating, according to Benzinga, implying about 4.68% upside from the previous close. Shares opened at USD 56.36 on Monday, within a 52-week range of USD 53.15 to USD 67.93, with a market cap of USD 53.33 billion. According to MarketBeat, the analyst consensus is 'Moderate Buy' with an average target of USD 72.34. The company reported quarterly EPS of USD 1.09, in line with estimates, and revenue of USD 1.55 billion versus USD 1.40 billion expected. Realty Income has set FY 2026 EPS guidance at 4.440–4.450.
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