Watched a good breakdown on Realty Income (O) from at Value-Investing and it clicked why this thing has gone nowhere for 5 years.
It's a rates story, not a business story. When the 10-year was at 2%, O's ~4% dividend yield looked great. Now the 10-year's at 5.2% and O has to yield ~7.5% to compete — so the price sat flat while the yield repriced. The business itself never broke.
The machine underneath: 98.8% occupancy (never below 96% since 1992), 673 consecutive monthly dividends, 14% annualized total return since the 1994 listing — nearly 2x the S&P 500. $89B enterprise value, 15,588 properties, investment-grade balance sheet (A3/A-/A), debt laddered out past 2036, 91.8% fixed rate.
The video ran a dividend discount model: probability-weighted intrinsic value ~$53 vs $55.35 current price. So not a screaming bargain — roughly fairly valued here.
The bull case is simple: 5.8% yield + ~2% growth = 8-10% total return, and if rates come back down, the yield compresses and the price rerates higher. The bear watch: interest expense is climbing ($604M vs $552M last year) and AFFO growth is modest at ~$4.44/share.
Key risk in one word from the video: recession. Ugly economy = tenants under pressure. But grocery stores and dollar stores (their top tenants) tend to hold up fine in downturns.
O isn't a BTC-treasury rocket — it's the opposite end of the portfolio. Boring, monthly, and built to survive whatever rates do.
Watched a good breakdown on Realty Income (O) from at Value-Investing and it clicked why this thing has gone nowhere for 5 years.
It's a rates story, not a business story. When the 10-year was at 2%, O's ~4% dividend yield looked great. Now the 10-year's at 5.2% and O has to yield ~7.5% to compete — so the price sat flat while the yield repriced. The business itself never broke.
The machine underneath: 98.8% occupancy (never below 96% since 1992), 673 consecutive monthly dividends, 14% annualized total return since the 1994 listing — nearly 2x the S&P 500. $89B enterprise value, 15,588 properties, investment-grade balance sheet (A3/A-/A), debt laddered out past 2036, 91.8% fixed rate.
The video ran a dividend discount model: probability-weighted intrinsic value ~$53 vs $55.35 current price. So not a screaming bargain — roughly fairly valued here.
The bull case is simple: 5.8% yield + ~2% growth = 8-10% total return, and if rates come back down, the yield compresses and the price rerates higher. The bear watch: interest expense is climbing ($604M vs $552M last year) and AFFO growth is modest at ~$4.44/share.
Key risk in one word from the video: recession. Ugly economy = tenants under pressure. But grocery stores and dollar stores (their top tenants) tend to hold up fine in downturns.
O isn't a BTC-treasury rocket — it's the opposite end of the portfolio. Boring, monthly, and built to survive whatever rates do.