REALTY INCOME CORP (O) Stock Fundamental Analysis
USA - NYSE:O - US7561091049 - REIT
56.87 USD
+0.54 (+0.96%)
56.9298 USD
+0.06 (+0.11%)
We assign a fundamental rating of 5 out of 10 to O. O was compared to 127 industry peers in the Diversified REITs industry. While O is still in line with the averages on profitability rating, there are concerns on its financial health. O is quite expensive at the moment. It does show a decent growth rate.
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.
In the past 5 years O has always been profitable.
In the past 5 years O always reported a positive cash flow from operatings.
1.2 Ratios
O has a Return On Assets (1.27%) which is in line with its industry peers.
O has a Return On Equity of 2.32%. This is comparable to the rest of the industry: O outperforms 52.76% of its industry peers.
O has a Return On Invested Capital of 2.73%. This is comparable to the rest of the industry: O outperforms 50.39% 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 3.07%.
The last Return On Invested Capital (2.73%) for O is above the 3 year average (2.51%), which is a sign of increasing profitability.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 1.27% | ||
| ROE | 2.32% | ||
| ROIC | 2.73% |
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
Looking at the Profit Margin, with a value of 16.63%, O is in the better half of the industry, outperforming 67.72% of the companies in the same industry.
In the last couple of years the Profit Margin of O has declined.
O has a better Operating Margin (44.06%) than 88.98% of its industry peers.
O's Operating Margin has declined in the last couple of years.
With an excellent Gross Margin value of 92.63%, O belongs to the best of the industry, outperforming 96.06% 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 | 44.06% | ||
| PM (TTM) | 16.63% | ||
| GM | 92.63% |
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
O has a Return on Invested Capital (ROIC), which is below the Cost of Capital (WACC), which means it 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 0.96, we must say that O is in the distress zone and has some risk of bankruptcy.
O has a better Altman-Z score (0.96) than 74.02% 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.
With a decent Debt to Equity ratio value of 0.73, O is doing good in the industry, outperforming 77.17% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.73 | ||
| Debt/FCF | N/A | ||
| Altman-Z | 0.96 |
ROIC/WACC0.39
WACC7%
2.3 Liquidity
O has a Current Ratio of 1.00. This is a normal value and indicates that O is financially healthy and should not expect problems in meeting its short term obligations.
Looking at the Current ratio, with a value of 1.00, O is in line with its industry, outperforming 54.33% of the companies in the same industry.
O has a Quick Ratio of 1.00. 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 (1.00) which is comparable to the rest of the industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1 | ||
| Quick Ratio | 1 |
3. Growth
3.1 Past
The Earnings Per Share has grown by an impressive 72.38% over the past year.
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 29.23%.
O shows a strong growth in Revenue. Measured over the last years, the Revenue has been growing by 28.78% yearly.
EPS 1Y (TTM)72.38%
EPS 3Y1.4%
EPS 5Y-6.62%
EPS Q2Q%260%
Revenue 1Y (TTM)29.23%
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.
O is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 6.48% yearly.
EPS Next Y34.84%
EPS Next 2Y24.7%
EPS Next 3Y18.84%
EPS Next 5Y13.63%
Revenue Next Year7.91%
Revenue Next 2Y6.35%
Revenue Next 3Y5.77%
Revenue Next 5Y6.48%
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 31.42, O can be considered very expensive at the moment.
The rest of the industry has a similar Price/Earnings ratio as O.
When comparing the Price/Earnings ratio of O to the average of the S&P500 Index (25.83), we can say O is valued slightly more expensively.
The Price/Forward Earnings ratio is 37.32, which means the current valuation is very expensive for O.
O's Price/Forward Earnings ratio is a bit cheaper when compared to the industry. O is cheaper than 66.93% of the companies in the same industry.
The average S&P500 Price/Forward Earnings ratio is at 32.68. O is around the same levels.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 31.42 | ||
| Fwd PE | 37.32 |
4.2 Price Multiples
Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of O indicates a slightly more expensive valuation: O is more expensive than 62.99% of the companies listed in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | N/A | ||
| EV/EBITDA | 16.24 |
4.3 Compensation for Growth
O's low PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a rather cheap valuation of the company.
The decent profitability rating of O may justify a higher PE ratio.
O's earnings are expected to grow with 18.84% in the coming years. This may justify a more expensive valuation.
PEG (NY)0.9
PEG (5Y)N/A
EPS Next 2Y24.7%
EPS Next 3Y18.84%
5. Dividend
5.1 Amount
O has a Yearly Dividend Yield of 5.74%, which is a nice return.
Compared to an average industry Dividend Yield of 6.21, 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 2.39.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 5.74% |
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
310.62% of the earnings are spent on dividend by O. This is not a sustainable payout ratio.
O's earnings are growing more than its dividend. This makes the dividend growth sustainable.
DP310.62%
EPS Next 2Y24.7%
EPS Next 3Y18.84%
56.87
+0.54 (+0.96%)
Chartmill FA Rating
GICS SectorReal Estate
GICS IndustryGroupEquity Real Estate Investment Trusts (REITs)
GICS IndustryDiversified REITs
Earnings (Last)
Earnings (Next)
Inst Owners80.2%
Inst Owner Change-0.95%
Ins Owners0.1%
Ins Owner Change0.56%
Market Cap52.00B
Revenue(TTM)5.27B
Net Income(TTM)908.13M
Analysts69.33
Price Target63.88 (12.33%)
Short Float %4.24%
Short Ratio7.36
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 5.74% |
Yearly Dividend3.28
Dividend Growth(5Y)4.2%
DP310.62%
Div Incr Years0
Div Non Decr Years0
Ex-Date
Surprises & Revisions
EPS beat(2)0
Avg EPS beat(2)-31.12%
Min EPS beat(2)-38.76%
Max EPS beat(2)-23.48%
EPS beat(4)0
Avg EPS beat(4)-30.57%
Min EPS beat(4)-41.01%
Max EPS beat(4)-19.05%
EPS beat(8)1
Avg EPS beat(8)-26.29%
EPS beat(12)3
Avg EPS beat(12)-17.27%
EPS beat(16)3
Avg EPS beat(16)-21.62%
Revenue beat(2)2
Avg Revenue beat(2)3.1%
Min Revenue beat(2)2.87%
Max Revenue beat(2)3.33%
Revenue beat(4)4
Avg Revenue beat(4)2.35%
Min Revenue beat(4)1.46%
Max Revenue beat(4)3.33%
Revenue beat(8)8
Avg Revenue beat(8)2.83%
Revenue beat(12)11
Avg Revenue beat(12)2.71%
Revenue beat(16)14
Avg Revenue beat(16)2.67%
PT rev (1m)0.92%
PT rev (3m)2.63%
EPS NQ rev (1m)-2.06%
EPS NQ rev (3m)18.15%
EPS NY rev (1m)-1.89%
EPS NY rev (3m)-4.86%
Revenue NQ rev (1m)0.07%
Revenue NQ rev (3m)1.3%
Revenue NY rev (1m)0%
Revenue NY rev (3m)1.57%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 31.42 | ||
| Fwd PE | 37.32 | ||
| P/S | 9.52 | ||
| P/FCF | N/A | ||
| P/OCF | 14.2 | ||
| P/B | 1.33 | ||
| P/tB | 1.84 | ||
| EV/EBITDA | 16.24 |
EPS(TTM)1.81
EY3.18%
EPS(NY)1.52
Fwd EY2.68%
FCF(TTM)-1.14
FCFYN/A
OCF(TTM)4
OCFY7.04%
SpS5.97
BVpS42.82
TBVpS30.83
PEG (NY)0.9
PEG (5Y)N/A
Graham Number41.76
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 1.27% | ||
| ROE | 2.32% | ||
| ROCE | 3.46% | ||
| ROIC | 2.73% | ||
| ROICexc | 2.76% | ||
| ROICexgc | 3.3% | ||
| OM | 44.06% | ||
| PM (TTM) | 16.63% | ||
| GM | 92.63% | ||
| 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 | 5.83 | ||
| Cap/Depr | 190.73% | ||
| Cap/Sales | 86.1% | ||
| Interest Coverage | 2.35 | ||
| Cash Conversion | 75.15% | ||
| Profit Quality | N/A | ||
| Current Ratio | 1 | ||
| Quick Ratio | 1 | ||
| Altman-Z | 0.96 |
F-Score6
WACC7%
ROIC/WACC0.39
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)72.38%
EPS 3Y1.4%
EPS 5Y-6.62%
EPS Q2Q%260%
EPS Next Y34.84%
EPS Next 2Y24.7%
EPS Next 3Y18.84%
EPS Next 5Y13.63%
Revenue 1Y (TTM)29.23%
Revenue growth 3Y36.33%
Revenue growth 5Y28.78%
Sales Q2Q%10.49%
Revenue Next Year7.91%
Revenue Next 2Y6.35%
Revenue Next 3Y5.77%
Revenue Next 5Y6.48%
EBIT growth 1Y14.81%
EBIT growth 3Y34%
EBIT growth 5Y25.67%
EBIT Next Year114.2%
EBIT Next 3Y34.44%
EBIT Next 5Y21.07%
FCF growth 1Y86.53%
FCF growth 3YN/A
FCF growth 5YN/A
OCF growth 1Y32.03%
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 5 / 10 to O.
What is the valuation status for O stock?
ChartMill assigns a valuation rating of 3 / 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 earnings growth outlook for REALTY INCOME CORP?
The Earnings per Share (EPS) of REALTY INCOME CORP (O) is expected to grow by 34.84% in the next year.
Is the dividend of REALTY INCOME CORP sustainable?
The dividend rating of REALTY INCOME CORP (O) is 5 / 10 and the dividend payout ratio is 310.62%.