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 5 out of 10. We evaluated O against 129 industry peers in the Diversified REITs industry. There are concerns on the financial health of O while its profitability can be described as average. O is valied quite expensively at the moment, while it does show a decent growth rate. Finally O also has an excellent dividend rating.
1. Profitability
1.1 Basic Checks
In the past year O was profitable.
O had a positive operating cash flow in the past year.
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 Return On Assets value of 1.27%, O perfoms like the industry average, outperforming 59.52% of the companies in the same industry.
With a Return On Equity value of 2.25%, O perfoms like the industry average, outperforming 53.97% of the companies in the same industry.
Looking at the Return On Invested Capital, with a value of 2.62%, O is in line with its industry, outperforming 49.21% of the companies in the same industry.
Measured over the past 3 years, the Average Return On Invested Capital for O is in line with the industry average of 3.11%.
The 3 year average ROIC (2.20%) for O is below the current ROIC(2.62%), indicating increased profibility in the last year.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 1.27% | ||
| ROE | 2.25% | ||
| ROIC | 2.62% |
ROA(3y)1.36%
ROA(5y)1.67%
ROE(3y)2.37%
ROE(5y)3.04%
ROIC(3y)2.2%
ROIC(5y)2.59%
1.3 Margins
With a decent Profit Margin value of 17.31%, O is doing good in the industry, outperforming 73.02% of the companies in the same industry.
In the last couple of years the Profit Margin of O has declined.
O's Operating Margin of 44.65% is amongst the best of the industry. O outperforms 88.10% of its industry peers.
O's Operating Margin has declined in the last couple of years.
The Gross Margin of O (92.75%) is better than 95.24% of its industry peers.
O's Gross Margin has been stable in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 44.65% | ||
| PM (TTM) | 17.31% | ||
| GM | 92.75% |
OM growth 3Y-3.17%
OM growth 5Y-1.81%
PM growth 3Y-3.79%
PM growth 5Y-4.82%
GM growth 3Y-0.51%
GM growth 5Y-0.59%
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.
O has more shares outstanding than it did 5 years ago.
O has a worse debt/assets ratio than last year.
2.2 Solvency
O has an Altman-Z score of 1.01. This is a bad value and indicates that O is not financially healthy and even has some risk of bankruptcy.
O has a Altman-Z score of 1.01. This is in the better half of the industry: O outperforms 73.02% of its industry peers.
The Debt to FCF ratio of O is 89.56, which is on the high side as it means it would take O, 89.56 years of fcf income to pay off all of its debts.
Looking at the Debt to FCF ratio, with a value of 89.56, O is in line with its industry, outperforming 52.38% of the companies in the same industry.
O has a Debt/Equity ratio of 0.68. This is a neutral value indicating O is somewhat dependend on debt financing.
O has a better Debt to Equity ratio (0.68) than 76.98% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.68 | ||
| Debt/FCF | 89.56 | ||
| Altman-Z | 1.01 |
ROIC/WACC0.36
WACC7.26%
2.3 Liquidity
O has a Current Ratio of 1.11. This is a normal value and indicates that O is financially healthy and should not expect problems in meeting its short term obligations.
O has a Current ratio (1.11) which is in line with its industry peers.
O has a Quick Ratio of 1.11. This is a normal value and indicates that O is financially healthy and should not expect problems in meeting its short term obligations.
O has a Quick ratio (1.11) which is in line with its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.11 | ||
| Quick Ratio | 1.11 |
3. Growth
3.1 Past
The earnings per share for O have decreased strongly by -20.45% in the last year.
The Revenue has grown by 28.67% in the past year. This is a very strong growth!
The Revenue has been growing by 25.16% on average over the past years. This is a very strong growth!
EPS 1Y (TTM)-20.45%
EPS 3Y2.5%
EPS 5Y0%
EPS Q2Q%-9.09%
Revenue 1Y (TTM)28.67%
Revenue growth 3Y35.29%
Revenue growth 5Y25.16%
Sales Q2Q%28.08%
3.2 Future
The Earnings Per Share is expected to grow by 8.06% on average over the next years. This is quite good.
O is expected to show quite a strong growth in Revenue. In the coming years, the Revenue will grow by 10.80% yearly.
EPS Next Y-3.87%
EPS Next 2Y13.24%
EPS Next 3Y10.43%
EPS Next 5Y8.06%
Revenue Next Year29.99%
Revenue Next 2Y17.29%
Revenue Next 3Y13.33%
Revenue Next 5Y10.8%
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 estimated forward Revenue growth is still strong, although it is decreasing when compared to the stronger growth in the past years.
4. Valuation
4.1 Price/Earnings Ratio
The Price/Earnings ratio is 54.37, which means the current valuation is very expensive for O.
Compared to the rest of the industry, the Price/Earnings ratio of O is on the same level as its industry peers.
When comparing the Price/Earnings ratio of O to the average of the S&P500 Index (29.63), we can say O is valued expensively.
With a Price/Forward Earnings ratio of 35.33, O can be considered very expensive at the moment.
72.22% of the companies in the same industry are more expensive than O, based on the Price/Forward Earnings ratio.
O is valuated expensively when we compare the Price/Forward Earnings ratio to 22.68, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 54.37 | ||
| Fwd PE | 35.33 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, O is valued a bit more expensive than the industry average as 69.05% of the companies are valued more cheaply.
O's Price/Free Cash Flow ratio is in line with the industry average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 171.15 | ||
| EV/EBITDA | 16.71 |
4.3 Compensation for Growth
The decent profitability rating of O may justify a higher PE ratio.
PEG (NY)N/A
PEG (5Y)N/A
EPS Next 2Y13.24%
EPS Next 3Y10.43%
5. Dividend
5.1 Amount
O has a Yearly Dividend Yield of 5.77%, which is a nice return.
Compared to an average industry Dividend Yield of 18.48, O has a dividend in line with its industry peers.
Compared to an average S&P500 Dividend Yield of 2.29, O pays a better dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 5.77% |
5.2 History
The dividend of O has a limited annual growth rate of 2.91%.
O has paid a dividend for at least 10 years, which is a reliable track record.
O has not decreased their dividend for at least 10 years, which is a reliable track record.
Dividend Growth(5Y)2.91%
Div Incr Years27
Div Non Decr Years27
5.3 Sustainability
295.81% of the earnings are spent on dividend by O. This is not a sustainable payout ratio.
The dividend of O is growing, but earnings are growing more, so the dividend growth is sustainable.
DP295.81%
EPS Next 2Y13.24%
EPS Next 3Y10.43%
57.09
+0.57 (+1.01%)
Chartmill FA Rating
GICS SectorReal Estate
GICS IndustryGroupEquity Real Estate Investment Trusts (REITs)
GICS IndustryDiversified REITs
Earnings (Last)
Earnings (Next)
Inst Owners78.71%
Inst Owner Change-0.08%
Ins Owners0.1%
Ins Owner Change-4.44%
Market Cap49.97B
Analysts71.03
Price Target62.56 (9.58%)
Short Float %2.13%
Short Ratio3.71
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 5.77% |
Yearly Dividend2.99
Dividend Growth(5Y)2.91%
DP295.81%
Div Incr Years27
Div Non Decr Years27
Ex-Date
Surprises & Revisions
EPS beat(2)0
Avg EPS beat(2)-20.4%
Min EPS beat(2)-21.75%
Max EPS beat(2)-19.05%
EPS beat(4)0
Avg EPS beat(4)-27.45%
Min EPS beat(4)-59.78%
Max EPS beat(4)-9.22%
EPS beat(8)2
Avg EPS beat(8)-14.04%
EPS beat(12)3
Avg EPS beat(12)-18.86%
EPS beat(16)3
Avg EPS beat(16)-17.21%
Revenue beat(2)2
Avg Revenue beat(2)3.53%
Min Revenue beat(2)1.75%
Max Revenue beat(2)5.3%
Revenue beat(4)4
Avg Revenue beat(4)3.22%
Min Revenue beat(4)1.75%
Max Revenue beat(4)5.3%
Revenue beat(8)8
Avg Revenue beat(8)3.11%
Revenue beat(12)10
Avg Revenue beat(12)2.75%
Revenue beat(16)13
Avg Revenue beat(16)2.39%
PT rev (1m)-3.14%
PT rev (3m)-5.82%
EPS NQ rev (1m)0.88%
EPS NQ rev (3m)2.69%
EPS NY rev (1m)-2.93%
EPS NY rev (3m)-5%
Revenue NQ rev (1m)-0.15%
Revenue NQ rev (3m)-0.98%
Revenue NY rev (1m)-0.06%
Revenue NY rev (3m)0.04%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 54.37 | ||
| Fwd PE | 35.33 | ||
| P/S | 9.98 | ||
| P/FCF | 171.15 | ||
| P/OCF | 14.86 | ||
| P/B | 1.3 | ||
| P/tB | 1.86 | ||
| EV/EBITDA | 16.71 |
EPS(TTM)1.05
EY1.84%
EPS(NY)1.62
Fwd EY2.83%
FCF(TTM)0.33
FCFY0.58%
OCF(TTM)3.84
OCFY6.73%
SpS5.72
BVpS43.94
TBVpS30.76
PEG (NY)N/A
PEG (5Y)N/A
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 1.27% | ||
| ROE | 2.25% | ||
| ROCE | 3.32% | ||
| ROIC | 2.62% | ||
| ROICexc | 2.64% | ||
| ROICexgc | 3.42% | ||
| OM | 44.65% | ||
| PM (TTM) | 17.31% | ||
| GM | 92.75% | ||
| FCFM | 5.83% |
ROA(3y)1.36%
ROA(5y)1.67%
ROE(3y)2.37%
ROE(5y)3.04%
ROIC(3y)2.2%
ROIC(5y)2.59%
ROICexc(3y)2.21%
ROICexc(5y)2.63%
ROICexgc(3y)2.71%
ROICexgc(5y)3.05%
ROCE(3y)2.78%
ROCE(5y)3.28%
ROICexcg growth 3Y-5.51%
ROICexcg growth 5Y-4.01%
ROICexc growth 3Y-7.96%
ROICexc growth 5Y-5.64%
OM growth 3Y-3.17%
OM growth 5Y-1.81%
PM growth 3Y-3.79%
PM growth 5Y-4.82%
GM growth 3Y-0.51%
GM growth 5Y-0.59%
F-Score6
Asset Turnover0.07
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.68 | ||
| Debt/FCF | 89.56 | ||
| Debt/EBITDA | 5.81 | ||
| Cap/Depr | 135.55% | ||
| Cap/Sales | 61.31% | ||
| Interest Coverage | 2.42 | ||
| Cash Conversion | 74.7% | ||
| Profit Quality | 33.68% | ||
| Current Ratio | 1.11 | ||
| Quick Ratio | 1.11 | ||
| Altman-Z | 1.01 |
F-Score6
WACC7.26%
ROIC/WACC0.36
Cap/Depr(3y)557.19%
Cap/Depr(5y)523.1%
Cap/Sales(3y)257.37%
Cap/Sales(5y)230.58%
Profit Quality(3y)N/A
Profit Quality(5y)N/A
High Growth Momentum
Growth
EPS 1Y (TTM)-20.45%
EPS 3Y2.5%
EPS 5Y0%
EPS Q2Q%-9.09%
EPS Next Y-3.87%
EPS Next 2Y13.24%
EPS Next 3Y10.43%
EPS Next 5Y8.06%
Revenue 1Y (TTM)28.67%
Revenue growth 3Y35.29%
Revenue growth 5Y25.16%
Sales Q2Q%28.08%
Revenue Next Year29.99%
Revenue Next 2Y17.29%
Revenue Next 3Y13.33%
Revenue Next 5Y10.8%
EBIT growth 1Y34.69%
EBIT growth 3Y31.01%
EBIT growth 5Y22.9%
EBIT Next Year182.99%
EBIT Next 3Y47.89%
EBIT Next 5Y28.35%
FCF growth 1Y105.44%
FCF growth 3YN/A
FCF growth 5YN/A
OCF growth 1Y47.1%
OCF growth 3Y38.42%
OCF growth 5Y25.76%