REALTY INCOME CORP (O)
US7561091049 - REIT
O gets a fundamental rating of 5 out of 10. The analysis compared the fundamentals against 130 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. While showing a medium growth rate, O is valued expensive at the moment. 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.
O had positive earnings in each of the past 5 years.
O had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
O has a Return On Assets (1.27%) which is comparable to the rest of the industry.
O has a Return On Equity of 2.25%. This is comparable to the rest of the industry: O outperforms 55.12% of its industry peers.
The Return On Invested Capital of O (2.62%) is comparable to the rest of the industry.
Measured over the past 3 years, the Average Return On Invested Capital for O is in line with the industry average of 3.10%.
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
O has a Profit Margin of 17.31%. This is in the better half of the industry: O outperforms 73.23% of its industry peers.
O's Profit Margin has declined in the last couple of years.
O has a Operating Margin of 44.65%. This is amongst the best in the industry. O outperforms 88.19% of its industry peers.
O's Operating Margin has declined in the last couple of years.
O has a better Gross Margin (92.75%) than 95.28% 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
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
O has more shares outstanding than it did 5 years ago.
The debt/assets ratio for O is higher compared to a year ago.
2.2 Solvency
Based on the Altman-Z score of 0.93, we must say that O is in the distress zone and has some risk of bankruptcy.
Looking at the Altman-Z score, with a value of 0.93, O is in the better half of the industry, outperforming 71.65% of the companies in the same industry.
O has a debt to FCF ratio of 89.56. This is a negative value and a sign of low solvency as O would need 89.56 years to pay back of all of its debts.
O has a Debt to FCF ratio of 89.56. This is comparable to the rest of the industry: O outperforms 51.18% of its industry peers.
O has a Debt/Equity ratio of 0.68. This is a neutral value indicating O is somewhat dependend on debt financing.
With a decent Debt to Equity ratio value of 0.68, O is doing good in the industry, outperforming 77.95% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.68 | ||
| Debt/FCF | 89.56 | ||
| Altman-Z | 0.93 |
ROIC/WACC0.35
WACC7.4%
2.3 Liquidity
A Current Ratio of 1.11 indicates that O should not have too much problems paying 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.
Looking at the Quick ratio, with a value of 1.11, O is in line with its industry, outperforming 48.03% of the companies in the same industry.
| 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.
Looking at the last year, O shows a very strong growth in Revenue. The Revenue has grown by 28.67%.
Measured over the past years, O shows a very strong growth in Revenue. The Revenue has been growing by 25.16% on average per year.
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
Based on estimates for the next years, O will show a quite strong growth in Earnings Per Share. The EPS will grow by 8.06% on average per year.
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-0.97%
EPS Next 2Y13.27%
EPS Next 3Y10.29%
EPS Next 5Y8.06%
Revenue Next Year30.06%
Revenue Next 2Y17.38%
Revenue Next 3Y13.37%
Revenue Next 5Y10.8%
3.3 Evolution
The EPS growth rate is accelerating: in the next years the growth will be better than in the last years.
Although the future Revenue growth is still strong, it is not able to hold up the even more excellent growth rate of the past years.
4. Valuation
4.1 Price/Earnings Ratio
A Price/Earnings ratio of 49.97 indicates a quite expensive valuation of O.
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 (27.10), we can say O is valued expensively.
The Price/Forward Earnings ratio is 32.46, 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 72.44% of the companies in the same industry.
Compared to an average S&P500 Price/Forward Earnings ratio of 23.41, O is valued a bit more expensive.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 49.97 | ||
| Fwd PE | 32.46 |
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 65.35% of the companies in the same industry.
Compared to the rest of the industry, the Price/Free Cash Flow ratio of O is on the same level as its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 157.3 | ||
| EV/EBITDA | 15.93 |
4.3 Compensation for Growth
O has a very decent profitability rating, which may justify a higher PE ratio.
PEG (NY)N/A
PEG (5Y)N/A
EPS Next 2Y13.27%
EPS Next 3Y10.29%
5. Dividend
5.1 Amount
O has a Yearly Dividend Yield of 6.03%, which is a nice return.
Compared to an average industry Dividend Yield of 15.23, O pays a bit more dividend than its industry peers.
O's Dividend Yield is rather good when compared to the S&P500 average which is at 2.33.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 6.03% |
5.2 History
The dividend of O has a limited annual growth rate of 2.91%.
O has been paying a dividend for at least 10 years, so it has 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
O pays out 295.81% of its income as dividend. 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 2Y13.27%
EPS Next 3Y10.29%
REALTY INCOME CORP
NYSE:O (1/13/2025, 8:04:00 PM)
Premarket: 52.6 +0.13 (+0.25%)52.47
+0.8 (+1.55%)
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-0.03%
Ins Owners0.1%
Ins Owner Change-4.43%
Market Cap45.92B
Analysts71.43
Price Target64.59 (23.1%)
Short Float %1.7%
Short Ratio2.88
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 6.03% |
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)-0.33%
PT rev (3m)-1.8%
EPS NQ rev (1m)0%
EPS NQ rev (3m)3.81%
EPS NY rev (1m)-0.45%
EPS NY rev (3m)-5.82%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)1.46%
Revenue NY rev (1m)0.12%
Revenue NY rev (3m)0.48%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 49.97 | ||
| Fwd PE | 32.46 | ||
| P/S | 9.17 | ||
| P/FCF | 157.3 | ||
| P/OCF | 13.66 | ||
| P/B | 1.19 | ||
| P/tB | 1.71 | ||
| EV/EBITDA | 15.93 |
EPS(TTM)1.05
EY2%
EPS(NY)1.62
Fwd EY3.08%
FCF(TTM)0.33
FCFY0.64%
OCF(TTM)3.84
OCFY7.32%
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 | 0.93 |
F-Score6
WACC7.4%
ROIC/WACC0.35
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-0.97%
EPS Next 2Y13.27%
EPS Next 3Y10.29%
EPS Next 5Y8.06%
Revenue 1Y (TTM)28.67%
Revenue growth 3Y35.29%
Revenue growth 5Y25.16%
Sales Q2Q%28.08%
Revenue Next Year30.06%
Revenue Next 2Y17.38%
Revenue Next 3Y13.37%
Revenue Next 5Y10.8%
EBIT growth 1Y34.69%
EBIT growth 3Y31.01%
EBIT growth 5Y22.9%
EBIT Next Year182.7%
EBIT Next 3Y47.77%
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%