Realty Income Has Paid 676 Consecutive Monthly Dividends. Here’s How Its Earnings Results Fit the Bigger Picture.

Realty Income, the preferred dividend stock of the author, has paid 676 consecutive monthly dividends, a record dating back over 56 years. Its latest quarterly earnings show revenue growth of 10.3% and net income increase from the previous year. More crucial for mortgage REIT investors is the adjusted funds from operations (AFFO), which grew 3.7% year over year to $1.12 per share.

Management has projected AFFO to be between $4.45 and $4.46 per share for the full year, while reaffirming its 2026 investment target of $10 billion. The company owns about 15,500 commercial properties, mostly leased to tenants for long-term net leases, covering various property-related expenses. The diverse client base spans nearly 100 industries and includes notable tenants like Dollar General and 7-Eleven, accounting for only 3.3% and 3% of annualized contractual rent respectively.

Realty Income's occupancy rate has remained above 96% since 1992, even during financial crises and the COVID-19 pandemic. The company has been consistently investing, with $2.6 billion spent during the third quarter, resulting in a weighted-average cash yield of 6.8%. Its business model combines recurring rental income, a diversified property portfolio, and a long history of rewarding shareholders, with a payout ratio of about 73%.

This consistent dividend policy, combined with dependable tenants, disciplined acquisitions, and sufficient cash flow, has created a convincing track record of increasing dividends over time, making Realty Income the author's favorite dividend stock.