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Stock of the Month: Realty Income Corporation

Written by Donnie Nguyen

December 15, 2020

Realty Income Corporation (NYSE: O) is the December stock of the month. Realty Income Corporation is a well-diversified real estate investment trust (REIT) that pays monthly dividends. It closed at $60.62 yesterday.

With a coronavirus vaccine currently in distribution, the theme lately has been about the “reopening stocks”. As I scrutinized stock of the month candidates that will benefit the most from the vaccine, it was difficult to find any whose stock prices were still reasonably priced.

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Realty Income Corporation stock fits the bill. As of Monday’s close (12/14/2020), O stock closed at $60.62, down 28.6% from its 52-week high of $84.92.

In this video, I first give a high-level overview of Realty Income Corporation. Then I share my game plan for investing in Realty Income Corporation stock. Find out why I like O stock now.

NOTE: This article was originally published on December 14, 2020. The article was updated on December 15, 2020, to add the video.

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KEY STATS (AS OF 12/14/2020)

Share Price: $60.62

Dividend Yield: 4.65%

Shares Outstanding: 351.0M

Market Cap: $21.3B

Net income per share (Q3 2020): $0.07

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AFFO (Q3 2020): $0.81

SHOULD I BUY THIS STOCK?

Realty Income stock could be a good addition to a portfolio that wants exposure to:

  • Equity REITs
  • Monthly Dividends
  • Dividend Aristocrats

Be sure to do your own research and determine if O stock is a good stock for your portfolio.

HOW MUCH OF THIS STOCK SHOULD I BUY?

Here are some portfolio guidelines we Wolves try to live by:

  • Thou shalt not hold more than 35% in any one particular sector
  • Thou shalt not invest more than 10% of principal into one individual stock
  • Thou shalt make small purchases. The general rule of thumb is to spend no more than 2% of your portfolio on a single purchase and build up your position over time.

These portfolio guidelines have helped me tremendously through my 20+ years of investing.

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BOTTOM LINE

Realty Income is a very well-run and diversified REIT that could be undervalued at its current price. It has a long track record of paying and growing its monthly dividend. It could be a big winner post-pandemic.

So what do you think about Realty Income stock? Let me know in the comments section.

Disclosure

I/we own shares of O

Except for Wolves of Investing, I/we are not receiving any compensation from and do not have any business dealings with any companies whose stocks are discussed in this article.

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Donnie Nguyen

Donnie Nguyen

Donnie Nguyen is the founder and CEO of Wolves of Investing. He started investing in the stock market in the early 2000s. He follows the teachings of Peter Lynch, Warren Buffett, and other investing legends. When he's not investing or blogging, he loves spending time with his family traveling and experiencing the world.

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