Is Realty Income (O) a Good Buy Here?

Is Realty Income (O) a Good Buy Here?

Posted On June 28, 2023 10:35 am

The monthly dividend company Realty Income Corporation (O – Get Rating) is structured as a Real Estate Investment Trust (REIT), with its monthly dividends supported by cash flow from several real estate properties.

In February, it was reported that the company would partner with Softbank-backed vertical farming startup Plenty Unlimited Inc. to invest up to $1 billion to build a farming space leased for the startup company. Providing a capital source for Plenty’s strawberry farm could benefit Realty Income.

However, O’s trailing-12-month asset turnover ratio of 0.07x is 43% lower than the industry average of 0.13x. Moreover, its trailing-12-month ROTA, ROTC, and ROCE of 1.75%, 1.89%, and 3.27% are 10.4%, 8.5%, and 25% lower than the 1.96%, 2.06%, and 4.36% industry averages.

Moreover, the stock closed its last trading session at $59.95, lower than its 50-day moving average of $60.89 and 200-day moving average of $62.72, indicating a downtrend.

Hence, let’s look at O’s key financial metrics trends to understand why it could be wise to avoid the stock now.

Analyzing Realty Income Corporation’s Financial Performance: Key Metrics and Trends (June 2020-March 2023)

O’s trailing-12-month revenue has followed an upward trend year over year, with increasing fluctuations since 2020. An overview of the revenue fluctuations is as follows:

  • June 2020: $1.60 billion
  • September 2020: $1.63 billion
  • December 2020: $1.65 billion
  • March 2021: $1.68 billion
  • June 2021: $1.73 billion
  • September 2021: $1.82 billion
  • December 2021: $2.08 billion
  • March 2022: $2.44 billion
  •  June 2022: $2.79 billion
  • September 2022: $3.14 billion
  • December 2022: $3.34 billion
  • March 2023: $3.48 billion

Notably, in recent periods, the revenue growth rate has…

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