Taking everything into account, O scores 4 out of 10 in our fundamental rating. O was compared to 124 industry peers in the Diversified REITs industry. O has a medium profitability rating, but doesn't score so well on its financial health evaluation. O is quite expensive at the moment. It does show a decent growth rate.

Quickly go to:

1. Profitability

2. Health

3. Growth

4. Valuation

5. Dividend

1. Profitability

1.1 Basic Checks

In the past year O was profitable.
O had a positive operating cash flow in the past year.
In the past 5 years O has always been profitable.
O had a positive operating cash flow in each of the past 5 years.

1.2 Ratios

O has a Return On Assets (1.35%) which is comparable to the rest of the industry.
Looking at the Return On Equity, with a value of 2.46%, O is in line with its industry, outperforming 52.80% of the companies in the same industry.
O's Return On Invested Capital of 2.83% is in line compared to the rest of the industry. O outperforms 52.80% of its industry peers.
The Average Return On Invested Capital over the past 3 years for O is in line with the industry average of 3.05%.
The 3 year average ROIC (2.51%) for O is below the current ROIC(2.83%), indicating increased profibility in the last year.

		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

The Profit Margin of O (17.18%) is better than 64.80% of its industry peers.
In the last couple of years the Profit Margin of O has declined.
The Operating Margin of O (44.42%) is better than 89.60% of its industry peers.
O's Operating Margin has declined in the last couple of years.
With an excellent Gross Margin value of 92.56%, O belongs to the best of the industry, outperforming 94.40% of the companies in the same industry.
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	44.42%
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%

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ROA

ROE

ROIC

Operating and Profit Margin

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2. Health

2.1 Basic Checks

With a Return on Invested Capital (ROIC) below the Cost of Capital (WACC), O is destroying value.
Compared to 1 year ago, O has more shares outstanding
The number of shares outstanding for O has been increased compared to 5 years ago.
O has a worse debt/assets ratio than last year.

2.2 Solvency

Based on the Altman-Z score of 1.03, we must say that O is in the distress zone and has some risk of bankruptcy.
O has a Altman-Z score of 1.03. This is in the better half of the industry: O outperforms 75.20% of its industry peers.
A Debt/Equity ratio of 0.73 indicates that O is somewhat dependend on debt financing.
O has a Debt to Equity ratio of 0.73. This is in the better half of the industry: O outperforms 79.20% of its industry peers.

		Industry Rank	Sector Rank
Debt/Equity	0.73
Debt/FCF	N/A
Altman-Z	1.03

ROIC/WACC0.39

WACC7.18%

2.3 Liquidity

O has a Current 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.
With a Current ratio value of 0.81, O perfoms like the industry average, outperforming 44.80% of the companies in the same industry.
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.
The Quick ratio of O (0.81) is comparable to the rest of the industry.

		Industry Rank	Sector Rank
Current Ratio	0.81
Quick Ratio	0.81

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WACC

Debt/Equity

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Altman-Z score

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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.
O shows quite a strong growth in Revenue. In the last year, the Revenue has grown by 11.88%.
Measured over the past years, O shows a very strong growth in Revenue. The Revenue has been growing by 28.78% on average per year.

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

Based on estimates for the next years, O will show a quite strong growth in Earnings Per Share. The EPS will grow by 13.63% on average per year.
The Revenue is expected to grow by 6.67% on average over the next years.

EPS Next Y32.96%

EPS Next 2Y28.87%

EPS Next 3Y20.41%

EPS Next 5Y13.63%

Revenue Next Year9.6%

Revenue Next 2Y7.72%

Revenue Next 3Y7.03%

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.
When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is decreasing.

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4. Valuation

4.1 Price/Earnings Ratio

The Price/Earnings ratio is 56.24, which means the current valuation is very expensive for O.
O's Price/Earnings ratio is in line with the industry average.
When comparing the Price/Earnings ratio of O to the average of the S&P500 Index (27.21), we can say O is valued expensively.
A Price/Forward Earnings ratio of 37.32 indicates a quite expensive valuation of O.
O's Price/Forward Earnings ratio is a bit cheaper when compared to the industry. O is cheaper than 68.00% of the companies in the same industry.
The average S&P500 Price/Forward Earnings ratio is at 25.98. O is valued slightly more expensive when compared to this.

		Industry Rank	Sector Rank
PE	56.24
Fwd PE	37.32

4.2 Price Multiples

O's Enterprise Value to EBITDA ratio is a bit more expensive when compared to the industry. O is more expensive than 64.80% of the companies in the same industry.

		Industry Rank	Sector Rank
P/FCF	N/A
EV/EBITDA	16.84

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 20.41% in the coming years.

PEG (NY)1.71

PEG (5Y)N/A

EPS Next 2Y28.87%

EPS Next 3Y20.41%

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5. Dividend

5.1 Amount

O has a Yearly Dividend Yield of 5.32%, which is a nice return.
O's Dividend Yield is comparable with the industry average which is at 6.82.
Compared to an average S&P500 Dividend Yield of 1.81, O pays a better dividend.

		Industry Rank	Sector Rank
Dividend Yield	5.32%

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 2Y28.87%

EPS Next 3Y20.41%

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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 32.96% in the next year.