If You Invested $1,000 in Realty Income 5 Years Ago, Here's How Much You'd Have Made In Dividends

One of the most popular real estate investment trusts (REITs) among institutional and retail investors is Realty Income Corp O, and for good reason. The stock has produced a total return of 7.48% over the past 12 months compared to -0.3% for the S&P 500.

The company is also one of only a few REITs that pays a monthly dividend and it currently has an attractive yield of 4.34%.

How much would that monthly dividend have added up to if you invested $1,000 into Realty Income five years ago?

On June 1, 2017, Realty Income shares closed at $53.78. A $1,000 investment could have bought 18.594 shares of the REIT. You would have received your first dividend payment on July 14, 2017, at a rate of $0.2115 per share, for a total payment of $3.93.

Over the next five years, Realty Income’s dividend had a compounded annual growth rate (CAGR) of 3.75%. You would have received $251.38 in dividends for an average annual yield of 4.59%.

However, reinvesting those dividends each month would have resulted in a growing share of equity and an increase in dividend payments over time.

Reinvesting the dividends would have resulted in a total dividend payout of $282.95 over the five years, which would have bought you 5.356 more shares. The average annualized yield would have been 5.11% and the yield on cost during the last 12 months would have been 6.7%.

Going into your sixth year, you would have a 7.1% dividend yield on your original $1,000 investment.

Related: This REIT You've Probably Never Heard of Has Paid a Dividend Above 8% For The Last 5 Years

Start generating passive income through real estate

Check out these featured investments from Benzinga's Real Estate Offerings Screener.

To sum it up, the total annualized return on your $1,000 investment, without reinvesting dividends, would have been 8.51% over five years when factoring in the $252.86 in capital gains.

The total annualized return with the dividend reinvestment would have been 10.04% when factoring in the accumulated shares and capital gains.

Image by IgorGolovniov on Shutterstock