REALTY INCOME CORP (O) Stock Fundamental Analysis
NYSE:O - New York Stock Exchange, Inc. - US7561091049 - REIT - Currency: USD
Overall O gets a fundamental rating of 4 out of 10. We evaluated O against 130 industry peers in the Diversified REITs industry. O has a medium profitability rating, but doesn't score so well on its financial health evaluation. While showing a medium growth rate, O is valued expensive at the moment.
1. Profitability
1.1 Basic Checks
O had positive earnings in the past year.
In the past year O had a positive cash flow from operations.
Each year in the past 5 years O has been profitable.
Each year in the past 5 years O had a positive operating cash flow.
1.2 Ratios
With a decent Return On Assets value of 1.39%, O is doing good in the industry, outperforming 61.54% of the companies in the same industry.
O has a Return On Equity (2.48%) which is comparable to the rest of the industry.
O has a Return On Invested Capital of 2.78%. This is comparable to the rest of the industry: O outperforms 51.54% of its industry peers.
Measured over the past 3 years, the Average Return On Invested Capital for O is in line with the industry average of 3.16%.
The last Return On Invested Capital (2.78%) for O is above the 3 year average (2.52%), which is a sign of increasing profitability.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 1.39% | ||
| ROE | 2.48% | ||
| ROIC | 2.78% |
ROA(3y)1.5%
ROA(5y)1.45%
ROE(3y)2.62%
ROE(5y)2.58%
ROIC(3y)2.52%
ROIC(5y)2.5%
1.3 Margins
O's Profit Margin of 17.96% is fine compared to the rest of the industry. O outperforms 72.31% of its industry peers.
O's Profit Margin has declined in the last couple of years.
With an excellent Operating Margin value of 44.35%, O belongs to the best of the industry, outperforming 89.23% of the companies in the same industry.
O's Operating Margin has declined in the last couple of years.
O has a better Gross Margin (92.67%) than 94.62% of its industry peers.
In the last couple of years the Gross Margin of O has remained more or less at the same level.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 44.35% | ||
| PM (TTM) | 17.96% | ||
| GM | 92.67% |
OM growth 3Y-1.7%
OM growth 5Y-2.42%
PM growth 3Y-2.35%
PM growth 5Y-11.32%
GM growth 3Y-0.27%
GM growth 5Y-0.26%
2. Health
2.1 Basic Checks
The Return on Invested Capital (ROIC) is below the Cost of Capital (WACC), so O is destroying value.
O has more shares outstanding than it did 1 year ago.
The number of shares outstanding for O has been increased compared to 5 years ago.
The debt/assets ratio for O is higher compared to a year ago.
2.2 Solvency
O has an Altman-Z score of 1.04. This is a bad value and indicates that O is not financially healthy and even has some risk of bankruptcy.
The Altman-Z score of O (1.04) is better than 75.38% of its industry peers.
A Debt/Equity ratio of 0.69 indicates that O is somewhat dependend on debt financing.
O's Debt to Equity ratio of 0.69 is fine compared to the rest of the industry. O outperforms 79.23% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.69 | ||
| Debt/FCF | N/A | ||
| Altman-Z | 1.04 |
ROIC/WACC0.38
WACC7.24%
2.3 Liquidity
A Current Ratio of 0.80 indicates that O may have some problems paying its short term obligations.
O's Current ratio of 0.80 is in line compared to the rest of the industry. O outperforms 40.77% of its industry peers.
A Quick Ratio of 0.80 indicates that O may have some problems paying its short term obligations.
Looking at the Quick ratio, with a value of 0.80, O is in line with its industry, outperforming 43.08% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.8 | ||
| Quick Ratio | 0.8 |
3. Growth
3.1 Past
O shows a small growth in Earnings Per Share. In the last year, the EPS has grown by 1.85%.
Measured over the past years, O shows a decrease in Earnings Per Share. The EPS has been decreasing by -6.62% on average per year.
O shows a strong growth in Revenue. In the last year, the Revenue has grown by 22.66%.
O shows a strong growth in Revenue. Measured over the last years, the Revenue has been growing by 28.78% yearly.
EPS 1Y (TTM)1.85%
EPS 3Y1.4%
EPS 5Y-6.62%
EPS Q2Q%75%
Revenue 1Y (TTM)22.66%
Revenue growth 3Y36.33%
Revenue growth 5Y28.78%
Sales Q2Q%9.52%
3.2 Future
O is expected to show quite a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 16.14% yearly.
The Revenue is expected to grow by 3.99% on average over the next years.
EPS Next Y45.51%
EPS Next 2Y28.16%
EPS Next 3Y20.23%
EPS Next 5Y16.14%
Revenue Next Year6.09%
Revenue Next 2Y5.57%
Revenue Next 3Y4.66%
Revenue Next 5Y3.99%
3.3 Evolution
When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.
The Revenue growth rate is decreasing: in the next years the growth will be less than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
With a Price/Earnings ratio of 51.51, O can be considered very expensive at the moment.
The rest of the industry has a similar Price/Earnings ratio as O.
O's Price/Earnings ratio indicates a rather expensive valuation when compared to the S&P500 average which is at 27.51.
A Price/Forward Earnings ratio of 35.20 indicates a quite expensive valuation of O.
70.00% of the companies in the same industry are more expensive than O, based on the Price/Forward Earnings ratio.
Compared to an average S&P500 Price/Forward Earnings ratio of 35.58, O is valued at the same level.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 51.51 | ||
| Fwd PE | 35.2 |
4.2 Price Multiples
66.92% of the companies in the same industry are cheaper than O, based on the Enterprise Value to EBITDA ratio.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | N/A | ||
| EV/EBITDA | 16.57 |
4.3 Compensation for Growth
O's PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a correct valuation of the company.
O has a very decent profitability rating, which may justify a higher PE ratio.
A more expensive valuation may be justified as O's earnings are expected to grow with 20.23% in the coming years.
PEG (NY)1.13
PEG (5Y)N/A
EPS Next 2Y28.16%
EPS Next 3Y20.23%
5. Dividend
5.1 Amount
O has a Yearly Dividend Yield of 5.67%, which is a nice return.
Compared to an average industry Dividend Yield of 6.44, O has a dividend in line with its industry peers.
O's Dividend Yield is rather good when compared to the S&P500 average which is at 2.35.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 5.67% |
5.2 History
The dividend of O has a limited annual growth rate of 4.20%.
O has paid a dividend for at least 10 years, which is a reliable track record.
Dividend Growth(5Y)4.2%
Div Incr Years0
Div Non Decr Years0
5.3 Sustainability
O pays out 286.38% of its income as dividend. This is not a sustainable payout ratio.
O's earnings are growing more than its dividend. This makes the dividend growth sustainable.
DP286.38%
EPS Next 2Y28.16%
EPS Next 3Y20.23%
56.66
-2.04 (-3.48%)
Chartmill FA Rating
GICS SectorReal Estate
GICS IndustryGroupEquity Real Estate Investment Trusts (REITs)
GICS IndustryDiversified REITs
Earnings (Last)
Earnings (Next)
Inst Owners79.09%
Inst Owner Change0.01%
Ins Owners0.1%
Ins Owner Change3.79%
Market Cap51.17B
Analysts70.34
Price Target62.19 (9.76%)
Short Float %3.35%
Short Ratio5.44
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 5.67% |
Yearly Dividend3.28
Dividend Growth(5Y)4.2%
DP286.38%
Div Incr Years0
Div Non Decr Years0
Ex-Date
Surprises & Revisions
EPS beat(2)0
Avg EPS beat(2)-32.24%
Min EPS beat(2)-41.01%
Max EPS beat(2)-23.48%
EPS beat(4)0
Avg EPS beat(4)-26.32%
Min EPS beat(4)-41.01%
Max EPS beat(4)-19.05%
EPS beat(8)1
Avg EPS beat(8)-23.43%
EPS beat(12)3
Avg EPS beat(12)-14.35%
EPS beat(16)3
Avg EPS beat(16)-20.04%
Revenue beat(2)2
Avg Revenue beat(2)2.4%
Min Revenue beat(2)1.46%
Max Revenue beat(2)3.33%
Revenue beat(4)4
Avg Revenue beat(4)2.96%
Min Revenue beat(4)1.46%
Max Revenue beat(4)5.3%
Revenue beat(8)8
Avg Revenue beat(8)3.04%
Revenue beat(12)10
Avg Revenue beat(12)2.4%
Revenue beat(16)14
Avg Revenue beat(16)2.66%
PT rev (1m)0.09%
PT rev (3m)0.32%
EPS NQ rev (1m)-0.28%
EPS NQ rev (3m)-1.61%
EPS NY rev (1m)-3.59%
EPS NY rev (3m)-5.92%
Revenue NQ rev (1m)-0.07%
Revenue NQ rev (3m)0.89%
Revenue NY rev (1m)0.24%
Revenue NY rev (3m)0.99%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 51.51 | ||
| Fwd PE | 35.2 | ||
| P/S | 9.49 | ||
| P/FCF | N/A | ||
| P/OCF | 14.28 | ||
| P/B | 1.31 | ||
| P/tB | 1.84 | ||
| EV/EBITDA | 16.57 |
EPS(TTM)1.1
EY1.94%
EPS(NY)1.61
Fwd EY2.84%
FCF(TTM)-0.51
FCFYN/A
OCF(TTM)3.97
OCFY7%
SpS5.97
BVpS43.22
TBVpS30.88
PEG (NY)1.13
PEG (5Y)N/A
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 1.39% | ||
| ROE | 2.48% | ||
| ROCE | 3.51% | ||
| ROIC | 2.78% | ||
| ROICexc | 2.79% | ||
| ROICexgc | 3.35% | ||
| OM | 44.35% | ||
| PM (TTM) | 17.96% | ||
| GM | 92.67% | ||
| FCFM | N/A |
ROA(3y)1.5%
ROA(5y)1.45%
ROE(3y)2.62%
ROE(5y)2.58%
ROIC(3y)2.52%
ROIC(5y)2.5%
ROICexc(3y)2.53%
ROICexc(5y)2.53%
ROICexgc(3y)3.06%
ROICexgc(5y)3.02%
ROCE(3y)3.19%
ROCE(5y)3.16%
ROICexcg growth 3Y13.03%
ROICexcg growth 5Y-1.09%
ROICexc growth 3Y15.09%
ROICexc growth 5Y-3.03%
OM growth 3Y-1.7%
OM growth 5Y-2.42%
PM growth 3Y-2.35%
PM growth 5Y-11.32%
GM growth 3Y-0.27%
GM growth 5Y-0.26%
F-Score6
Asset Turnover0.08
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.69 | ||
| Debt/FCF | N/A | ||
| Debt/EBITDA | 5.63 | ||
| Cap/Depr | 166.92% | ||
| Cap/Sales | 75.04% | ||
| Interest Coverage | 2.36 | ||
| Cash Conversion | 74.4% | ||
| Profit Quality | N/A | ||
| Current Ratio | 0.8 | ||
| Quick Ratio | 0.8 | ||
| Altman-Z | 1.04 |
F-Score6
WACC7.24%
ROIC/WACC0.38
Cap/Depr(3y)369.18%
Cap/Depr(5y)430.26%
Cap/Sales(3y)177.32%
Cap/Sales(5y)195.09%
Profit Quality(3y)N/A
Profit Quality(5y)N/A
High Growth Momentum
Growth
EPS 1Y (TTM)1.85%
EPS 3Y1.4%
EPS 5Y-6.62%
EPS Q2Q%75%
EPS Next Y45.51%
EPS Next 2Y28.16%
EPS Next 3Y20.23%
EPS Next 5Y16.14%
Revenue 1Y (TTM)22.66%
Revenue growth 3Y36.33%
Revenue growth 5Y28.78%
Sales Q2Q%9.52%
Revenue Next Year6.09%
Revenue Next 2Y5.57%
Revenue Next 3Y4.66%
Revenue Next 5Y3.99%
EBIT growth 1Y23.18%
EBIT growth 3Y34%
EBIT growth 5Y25.67%
EBIT Next Year112.05%
EBIT Next 3Y33.51%
EBIT Next 5Y21.23%
FCF growth 1Y92.71%
FCF growth 3YN/A
FCF growth 5YN/A
OCF growth 1Y28.78%
OCF growth 3Y39.29%
OCF growth 5Y27.3%