Realty Income Corp. (NYSE:O) is a San Diego-based retail real estate investment trust (REIT) that owns and operates over 11,400 commercial properties worldwide with long-term net lease contracts. 

With a net lease, the tenant is responsible for the majority of operating costs, including taxes, insurance and maintenance. This considerably reduces the risks to the landlord.

Realty Income’s tenant list includes large, well-known retail companies, such as Walgreens Co., Dollar General Corp., FedEx Corp. and Dollar Tree Inc. Investors can sleep well at night knowing these are companies that will always make their rent payments through thick and thin.

Among income investors, Realty Income is one of the most popular and well-followed REIT stocks. It calls itself “The Monthly Dividend Company.” Realty Income is one of 65 S&P 500 Dividend Aristocrats, meaning it has increased its dividends for at least 25 consecutive years. It recently declared its 628th consecutive monthly dividend and has increased the dividend 117 times since its initial public offering (IPO) in 1994.

Realty Income is probably the most popular REIT among income investors because of its longevity, consistency, growth and safety. Its website states the compound average annual total return since 1994 is 15.1%, a figure that outperforms the REIT sector as a whole, as well as the S&P 500.

There’s a lot to like about Realty Income. But is now a good time to buy the stock? Take a look:

Like many REITs, Realty Income’s recent performance has been volatile. The stock peaked intraday on Aug. 8 at $75.40 but closed at $72.68. After a one-week rally where the price stalled at $74.52, the stock began to sell off throughout the remainder of August, all of September and into mid-October. It finally bottomed on Oct. 14 at $55.50, a total decline of 26.4% from the high.

But since then, many REITs have begun to rally, and Realty Income has been one of them, climbing about 10% off its 52-week low.

This week, Realty Income reported third-quarter earnings. Revenue of $837.27 million was above the analysts’ estimate of $823.39 million and was up a tremendous 70% over last year’s third quarter of $491.88 million.

Funds from operations (FFO) was $0.98, a penny above Wall Street’s expectations and was up from the $0.91 FFO in the third quarter of 2021. Realty Income also adjusted its previous full-year FFO guidance from a previous range of $3.84 to $3.97 to a new range of $3.87 to $3.94.

Dividend raises every couple of quarters have delighted income investors, and the annual dividend of $2.98 is well covered by the FFO and is now 20% higher than it was five years ago. The current yield of 4.9% is 13% above the five-year average of 4.31%.

So with all of this good news, why is Realty Income down so much from its highs? Fears of inflation and recession are the main reasons, with the Federal Reserve tightening interest rates four consecutive times by three-quarters of a point.

While that hurts investors who bought Realty Income at higher levels, it sets up a great opportunity for investors who don’t already own the stock or for those who want to add to preexisting positions.

So, yes, now could be a really good time to buy Realty Income — especially if you can dollar-cost average into a position. Its long-term history, increasing monthly dividend payments and solid earnings make this stock a winner.

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Not investment advice. For educational purposes only.