Realty Income (O -0.12%) is an unstoppable dividend stock. The real estate investment trust (REIT) has increased its monthly dividend 134 times since its 1994 listing on the New York Stock Exchange. It has raised its payout for 114 straight quarters and 31 consecutive years.
The REIT recently reported its first-quarter results, which showed that it's continuing to deliver growth for investors. Here's a look at whether the monthly dividend juggernaut is still a buy at the current price.
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A strong start to the year
Realty Income generated $1.13 per share of adjusted funds from operations (AFFO) during the first quarter, up 6.6% year over year. That supported its ability to continue increasing the dividend. Realty Income has raised its payment by 1.8% over the past year, while lowering its payout ratio to an even more conservative 71.7%.
The REIT benefited from the durability and steady growth of its high-quality real estate portfolio. Its portfolio maintained a strong occupancy level of 98.9% in the quarter (the same as the fourth quarter and up from 98.5% in last year's first quarter). Meanwhile, it signed new and renewal leases for 243 properties during the quarter, at an average rental rate 3.4% higher than the prior leases on the same space.
The REIT also invested $2.8 billion into new properties during the period, including $200 million funded by its growing list of strategic partners. In January, the company established a strategic partnership with GIC, including a joint venture valued at more than $1.5 billion to fund build-to-suit logistics real estate developments. It also formed a $1 billion partnership with Apollo in March to invest in retail properties. Additionally, Realty Income completed the $1.7 billion cornerstone capital raise for its U.S. Core Plus fund with GIG as an investor.
NYSE: O
Key Data Points
Expecting more growth in 2026
Realty Income's strong start to the year and growing private capital partnerships are driving it to increase its full-year outlook. The company now expects to invest $9.5 billion this year. That's up from its initial guidance of $8 billion and well above the $6.3 billion it invested last year.
The REIT's increased investment volume should support higher AFFO growth. Realty Income now expects to generate between $4.41 and $4.44 per share of AFFO this year, up from its initial $4.38-$4.42 per share guidance range. The updated outlook implies AFFO growth of 3% to 3.7% this year.
Is Realty Income still a buy?
Shares of Realty Income have risen more than 10% this year and currently trade around $62 each. Given its upwardly revised AFFO guidance range, the REIT trades at about 14 times earnings. That's lower than the S&P 500 (22.5 times earnings) and a reasonable level for a REIT focused on investing in net lease real estate. This low valuation is why Realty Income currently has a much higher dividend yield (5.2% vs. 1.1% for the S&P 500). While Realty Income isn't as cheap as it was earlier this year, it still looks like an attractive buy for investors seeking a high-yielding and steadily rising monthly income stream.
