REALTY INCOME CORP (O) Stock Fundamental Analysis
USA - New York Stock Exchange - NYSE:O - US7561091049 - REIT
58.89 USD
+0.72 (+1.24%)
58.82 USD
-0.07 (-0.12%)
O gets a fundamental rating of 4 out of 10. The analysis compared the fundamentals against 126 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
In the past year O was profitable.
In the past year O had a positive cash flow from operations.
Each year in the past 5 years O has been profitable.
In the past 5 years O always reported a positive cash flow from operatings.
1.2 Ratios
With a Return On Assets value of 1.35%, O perfoms like the industry average, outperforming 54.76% of the companies in the same industry.
With a Return On Equity value of 2.46%, O perfoms like the industry average, outperforming 53.17% of the companies in the same industry.
O has a Return On Invested Capital (2.83%) which is in line with its industry peers.
The Average Return On Invested Capital over the past 3 years for O is in line with the industry average of 3.06%.
The last Return On Invested Capital (2.83%) for O is above the 3 year average (2.51%), which is a sign of increasing profitability.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 1.35% | ||
| ROE | 2.46% | ||
| ROIC | 2.83% |
ROA(3y)1.5%
ROA(5y)1.45%
ROE(3y)2.62%
ROE(5y)2.58%
ROIC(3y)2.51%
ROIC(5y)2.49%
1.3 Margins
O's Profit Margin of 17.18% is fine compared to the rest of the industry. O outperforms 65.08% of its industry peers.
In the last couple of years the Profit Margin of O has declined.
Looking at the Operating Margin, with a value of 44.42%, O belongs to the top of the industry, outperforming 89.68% of the companies in the same industry.
O's Operating Margin has declined in the last couple of years.
O has a Gross Margin of 92.56%. This is amongst the best in the industry. O outperforms 94.44% of its industry peers.
O's Gross Margin has been stable in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 44.42% | ||
| PM (TTM) | 17.18% | ||
| GM | 92.56% |
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.
Compared to 5 years ago, O has more shares outstanding
The debt/assets ratio for O is higher compared to a year ago.
2.2 Solvency
Based on the Altman-Z score of 0.99, we must say that O is in the distress zone and has some risk of bankruptcy.
O has a Altman-Z score of 0.99. This is in the better half of the industry: O outperforms 76.19% of its industry peers.
O has a Debt/Equity ratio of 0.73. This is a neutral value indicating O is somewhat dependend on debt financing.
The Debt to Equity ratio of O (0.73) is better than 78.57% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.73 | ||
| Debt/FCF | N/A | ||
| Altman-Z | 0.99 |
ROIC/WACC0.4
WACC7.1%
2.3 Liquidity
A Current Ratio of 0.81 indicates that O may have some problems paying its short term obligations.
O has a Current ratio (0.81) which is in line with its industry peers.
O has a Quick Ratio of 0.81. This is a bad value and indicates that O is not financially healthy enough and could expect problems in meeting its short term obligations.
O has a Quick ratio (0.81) which is in line with its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.81 | ||
| Quick Ratio | 0.81 |
3. Growth
3.1 Past
The Earnings Per Share has been growing slightly by 2.86% over the past year.
The Earnings Per Share has been decreasing by -6.62% on average over the past years.
The Revenue has grown by 11.88% in the past year. This is quite good.
O shows a strong growth in Revenue. Measured over the last years, the Revenue has been growing by 28.78% yearly.
EPS 1Y (TTM)2.86%
EPS 3Y1.4%
EPS 5Y-6.62%
EPS Q2Q%16.67%
Revenue 1Y (TTM)11.88%
Revenue growth 3Y36.33%
Revenue growth 5Y28.78%
Sales Q2Q%10.49%
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 13.63% yearly.
The Revenue is expected to grow by 6.67% on average over the next years.
EPS Next Y33.33%
EPS Next 2Y27.13%
EPS Next 3Y20.05%
EPS Next 5Y13.63%
Revenue Next Year8.54%
Revenue Next 2Y7.11%
Revenue Next 3Y6.84%
Revenue Next 5Y6.67%
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
The Price/Earnings ratio is 54.53, which means the current valuation is very expensive for O.
O's Price/Earnings is on the same level as the industry average.
Compared to an average S&P500 Price/Earnings ratio of 27.25, O is valued quite expensively.
Based on the Price/Forward Earnings ratio of 37.18, the valuation of O can be described as expensive.
Based on the Price/Forward Earnings ratio, O is valued a bit cheaper than the industry average as 68.25% of the companies are valued more expensively.
O is valuated expensively when we compare the Price/Forward Earnings ratio to 23.98, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 54.53 | ||
| Fwd PE | 37.18 |
4.2 Price Multiples
O's Enterprise Value to EBITDA is on the same level as the industry average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | N/A | ||
| EV/EBITDA | 16.36 |
4.3 Compensation for Growth
The PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a correct valuation of the company.
The decent profitability rating of O may justify a higher PE ratio.
O's earnings are expected to grow with 20.05% in the coming years. This may justify a more expensive valuation.
PEG (NY)1.64
PEG (5Y)N/A
EPS Next 2Y27.13%
EPS Next 3Y20.05%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 5.56%, O is a good candidate for dividend investing.
Compared to an average industry Dividend Yield of 6.86, 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 1.92.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 5.56% |
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 298.20% 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.
DP298.2%
EPS Next 2Y27.13%
EPS Next 3Y20.05%
58.89
+0.72 (+1.24%)
Chartmill FA Rating
GICS SectorReal Estate
GICS IndustryGroupEquity Real Estate Investment Trusts (REITs)
GICS IndustryDiversified REITs
Earnings (Last)
Earnings (Next)
Inst Owners81.1%
Inst Owner Change0.08%
Ins Owners0.1%
Ins Owner Change-4.76%
Market Cap54.17B
Revenue(TTM)5.60B
Net Income(TTM)962.12M
Analysts68.67
Price Target63.86 (8.44%)
Short Float %4.97%
Short Ratio7.39
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 5.56% |
Yearly Dividend3.28
Dividend Growth(5Y)4.2%
DP298.2%
Div Incr Years0
Div Non Decr Years0
Ex-DateN/A
Surprises & Revisions
EPS beat(2)0
Avg EPS beat(2)-21.28%
Min EPS beat(2)-38.76%
Max EPS beat(2)-3.79%
EPS beat(4)0
Avg EPS beat(4)-26.76%
Min EPS beat(4)-41.01%
Max EPS beat(4)-3.79%
EPS beat(8)0
Avg EPS beat(8)-27.11%
EPS beat(12)2
Avg EPS beat(12)-18.28%
EPS beat(16)3
Avg EPS beat(16)-20.83%
Revenue beat(2)2
Avg Revenue beat(2)3.81%
Min Revenue beat(2)2.87%
Max Revenue beat(2)4.74%
Revenue beat(4)4
Avg Revenue beat(4)3.1%
Min Revenue beat(4)1.46%
Max Revenue beat(4)4.74%
Revenue beat(8)8
Avg Revenue beat(8)3.16%
Revenue beat(12)12
Avg Revenue beat(12)3.11%
Revenue beat(16)14
Avg Revenue beat(16)2.83%
PT rev (1m)-0.3%
PT rev (3m)0.78%
EPS NQ rev (1m)2.94%
EPS NQ rev (3m)-12.74%
EPS NY rev (1m)-0.93%
EPS NY rev (3m)-5.5%
Revenue NQ rev (1m)1.12%
Revenue NQ rev (3m)1.97%
Revenue NY rev (1m)0.19%
Revenue NY rev (3m)0.73%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 54.53 | ||
| Fwd PE | 37.18 | ||
| P/S | 9.67 | ||
| P/FCF | N/A | ||
| P/OCF | 14.4 | ||
| P/B | 1.39 | ||
| P/tB | 1.92 | ||
| EV/EBITDA | 16.36 |
EPS(TTM)1.08
EY1.83%
EPS(NY)1.58
Fwd EY2.69%
FCF(TTM)-1.19
FCFYN/A
OCF(TTM)4.09
OCFY6.95%
SpS6.09
BVpS42.45
TBVpS30.72
PEG (NY)1.64
PEG (5Y)N/A
Graham Number32.12
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 1.35% | ||
| ROE | 2.46% | ||
| ROCE | 3.58% | ||
| ROIC | 2.83% | ||
| ROICexc | 2.85% | ||
| ROICexgc | 3.39% | ||
| OM | 44.42% | ||
| PM (TTM) | 17.18% | ||
| GM | 92.56% | ||
| FCFM | N/A |
ROA(3y)1.5%
ROA(5y)1.45%
ROE(3y)2.62%
ROE(5y)2.58%
ROIC(3y)2.51%
ROIC(5y)2.49%
ROICexc(3y)2.52%
ROICexc(5y)2.53%
ROICexgc(3y)3.04%
ROICexgc(5y)3.01%
ROCE(3y)3.17%
ROCE(5y)3.15%
ROICexgc growth 3Y12.51%
ROICexgc growth 5Y-1.36%
ROICexc growth 3Y14.65%
ROICexc growth 5Y-3.26%
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 | 0.73 | ||
| Debt/FCF | N/A | ||
| Debt/EBITDA | 5.71 | ||
| Cap/Depr | 194.59% | ||
| Cap/Sales | 86.68% | ||
| Interest Coverage | 2.37 | ||
| Cash Conversion | 75.51% | ||
| Profit Quality | N/A | ||
| Current Ratio | 0.81 | ||
| Quick Ratio | 0.81 | ||
| Altman-Z | 0.99 |
F-Score6
WACC7.1%
ROIC/WACC0.4
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)2.86%
EPS 3Y1.4%
EPS 5Y-6.62%
EPS Q2Q%16.67%
EPS Next Y33.33%
EPS Next 2Y27.13%
EPS Next 3Y20.05%
EPS Next 5Y13.63%
Revenue 1Y (TTM)11.88%
Revenue growth 3Y36.33%
Revenue growth 5Y28.78%
Sales Q2Q%10.49%
Revenue Next Year8.54%
Revenue Next 2Y7.11%
Revenue Next 3Y6.84%
Revenue Next 5Y6.67%
EBIT growth 1Y11.31%
EBIT growth 3Y34%
EBIT growth 5Y25.67%
EBIT Next Year116.05%
EBIT Next 3Y35.53%
EBIT Next 5Y21.07%
FCF growth 1Y86.09%
FCF growth 3YN/A
FCF growth 5YN/A
OCF growth 1Y33.04%
OCF growth 3Y39.29%
OCF growth 5Y27.3%
REALTY INCOME CORP / O FAQ
Can you provide the ChartMill fundamental rating for REALTY INCOME CORP?
ChartMill assigns a fundamental rating of 4 / 10 to O.
Can you provide the valuation status for REALTY INCOME CORP?
ChartMill assigns a valuation rating of 2 / 10 to REALTY INCOME CORP (O). This can be considered as Overvalued.
What is the profitability of O stock?
REALTY INCOME CORP (O) has a profitability rating of 6 / 10.
What is the financial health of REALTY INCOME CORP (O) stock?
The financial health rating of REALTY INCOME CORP (O) is 2 / 10.
Can you provide the expected EPS growth for O stock?
The Earnings per Share (EPS) of REALTY INCOME CORP (O) is expected to grow by 33.33% in the next year.