If You'd Invested $3,733 in Realty Income Stock 10 Years Ago, Here's How Much You'd Have Today
Realty Income (NYSE: O) is a wealth-creating machine. The real estate investment trust (REIT) dishes out a growing stream of dividend income. On top of that, its stock has steadily grown in value. These two value drivers have added up to a very attractive total return over the past decade.
Here’s a look at how much money an investor would have today if they spent $3,733 to buy 100 shares about 10 years ago.
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Realty Income pays a steadily rising monthly dividend. The REIT has raised its dividend payment 127 times since its initial public market listing in 1994, including the past 108 quarters in a row. Because of that, investors have collected a growing stream of dividend income over the past decade.
An investor who purchased 100 shares 10 years ago would have initially received about $219 in dividend income during the first year based on its payment at the time. That’s a nearly 5.9% dividend yield on an initial investment. That income stream would have steadily grown, reaching its current annualized level of $308. That’s a 40% increase from the initial annual level. They would have collected a cumulative $3,077 in dividends during that decade. Meanwhile, the initial investment now yields 8.2%.
That income is only part of the return. Shares of Realty Income have steadily appreciated as the REIT invested in expanding its portfolio of income-producing properties, which has increased its funds from operations (FFO) per share by around 5% per year. That has helped grow the REIT’s share price by over 50%. As a result, the initial investment is now worth about $5,742. That’s in addition to getting more than 80% of the initial investment back in dividend income. Add it up, and the 100-share purchase would have grown from $3,733 to $8,819 in total value. That investment is also throwing off about $310 (and growing) of annual dividend income.
Realty Income is a slow and steady wealth creator that generates a growing stream of dividend income from an increasingly more valuable investment.
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