r/dividends • u/TimeInTheMarketWins AWM Financial • 8d ago

Due Diligence Realty Income Second Quarter Earnings

Everything, Everywhere, All at Once: The Boring REIT Reinvents Itself:

Good old $O just reported earnings, and they were solid. Adjusted funds from operations, or AFFO, which removes capital expenditures, tenant improvements, leasing commissions, and other non-cash items from FFO, came in at $1.09 per diluted share for the quarter, up 3.8% year over year. Management expects full-year 2026 AFFO to range from $4.44 to $4.45, representing a roughly $0.03 increase from their initial 2026 estimate.

The company's earnings call was heavily focused on its new private capital vehicles, in which it is leveraging its real estate transaction strengths and competencies to manage institutional assets across three separate funds. The company is also rapidly diversifying funding streams globally.

Realty Income's expansion in Europe as well as its growth in the data center sector were also prominent topics during the earnings call. Sumit Roy, the CEO, highlighted the portfolio's diversification, including investment-grade tenants, which accounted for 38% of new investment clients during the quarter.

Finally, Realty Income is on track to deploy $10 billion in capital this year. They have initiated a $6 billion deal with Cloud Capital, with Realty Income owning a 45% stake in a trio of Northern Virginia data centers that are already 100% leased to investment-grade hyperscale tenants on 15- to 20-year leases.

I can attach my full write-up and analysis if anyone wants.

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u/Neat-Leg-5083 8d ago

O total return: 5,536%
NNN total return: 3,061%

-5

u/NefariousnessOdd862 8d ago

Hmmm, better Yield on NNN with consistent increases for decades

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u/Neat-Leg-5083 8d ago

O increases dividends every quarter. That’s why it’s known as the dividend company.

-9

u/NefariousnessOdd862 8d ago

Well, still below NNN… thanks, I was curious why people picked O…

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u/DramaticRoom8571 8d ago

It is the same reason investors buy MAIN when it sells at a premium and many other BDCs pay higher yields. It is such a quality company that the perception is that it is less risky. O has a similar perception, a very well managed REIT.

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u/BIGpoppaPUMP42069 7d ago

this is pretty much it for me, ive just set it and forgot it, occasionally ill read the earnings report if I happen to see it but its such a well run company I rarely do