Reviewing Realty Income (O) and Its Rivals

Realty Income (NYSE: O) is one of 75 public companies in the “Commercial REITs” industry, but how does it contrast to its rivals? We will compare Realty Income to related companies based on the strength of its institutional ownership, profitability, earnings, valuation, analyst recommendations, dividends and risk.

Dividends

Realty Income pays an annual dividend of $2.54 per share and has a dividend yield of 4.6%. Realty Income pays out 208.2% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. As a group, “Commercial REITs” companies pay a dividend yield of 4.0% and pay out 93.4% of their earnings in the form of a dividend. Realty Income has increased its dividend for 21 consecutive years.

Risk & Volatility

Realty Income has a beta of 0.29, suggesting that its stock price is 71% less volatile than the S&P 500. Comparatively, Realty Income’s rivals have a beta of 0.77, suggesting that their average stock price is 23% less volatile than the S&P 500.

Profitability

This table compares Realty Income and its rivals’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Realty Income 29.37% 5.11% 2.64%
Realty Income Competitors 48.67% 6.47% 3.69%

Earnings & Valuation

This table compares Realty Income and its rivals top-line revenue, earnings per share and valuation.

Gross Revenue Net Income Price/Earnings Ratio
Realty Income $1.10 billion $315.57 million 44.94
Realty Income Competitors $537.26 million $100.34 million 444.73

Realty Income has higher revenue and earnings than its rivals. Realty Income is trading at a lower price-to-earnings ratio than its rivals, indicating that it is currently more affordable than other companies in its industry.

Insider and Institutional Ownership

70.0% of Realty Income shares are owned by institutional investors. Comparatively, 73.2% of shares of all “Commercial REITs” companies are owned by institutional investors. 0.3% of Realty Income shares are owned by insiders. Comparatively, 7.3% of shares of all “Commercial REITs” companies are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Analyst Ratings

This is a summary of recent ratings and target prices for Realty Income and its rivals, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Realty Income 1 4 3 0 2.25
Realty Income Competitors 587 2335 2161 23 2.32

Realty Income presently has a consensus price target of $66.60, suggesting a potential upside of 21.47%. As a group, “Commercial REITs” companies have a potential upside of 7.20%. Given Realty Income’s higher probable upside, analysts plainly believe Realty Income is more favorable than its rivals.

Summary

Realty Income rivals beat Realty Income on 11 of the 15 factors compared.

About Realty Income

Realty Income Corporation is a real estate investment trust (REIT). The Company is engaged in in-house acquisition, portfolio management, asset management, credit research, real estate research, legal, finance and accounting, information technology and capital markets capabilities. As of December 31, 2016, the Company owned a diversified portfolio of 4,944 properties located in 49 states and Puerto Rico, with over 83.0 million square feet of leasable space leased to 248 different commercial tenants doing business in 47 separate industries. As of December 31, 2016, of the 4,944 properties in the portfolio, 4,920, or 99.5%, were single-tenant properties, and the remaining were multi-tenant properties. As of December 31, 2016, of the 4,920 single-tenant properties, 4,836 were leased with a weighted average remaining lease term (excluding rights to extend a lease at the option of the tenant) of approximately 9.8 years.

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