One Of The Most Reliable Income Stocks On The Market

The Dividend Aristocrats club just initiated its newest member.

This is one of the investment world’s most elite groups. Eligibility requires a minimum of 25 consecutive years of dividend hikes, without interruption.

It can be tough just to maintain dividends year after year (especially during recessions) – let alone increase them. One slip and a prospective candidate must start back over at zero.

Realty Income (NYSE: O) became just the third real estate company to make the cut.

One of the biggest winners in my High-Yield Investing premium newsletter portfolio, Realty Income traces its origins back to 1969 when its founders purchased their first property (leased to a Taco Bell). By the time it went public in 1994, the portfolio had increased in size to 630 properties worth $450 million.

Today Realty has amassed a real estate empire spread from coast to coast, encompassing more than 5,900 commercial properties with a book value of $17 billion. Those buildings are full of reliable tenants who are largely immune to the likes of Amazon. We’re talking about tenants like Taco Bell, Walgreens, Circle K, Sam’s Club, Dollar General, Home Depot, and more. Occupancy has never once dipped below 96%, even in economic downturns, and remains above 98% currently.

The Monthly Dividend Company

Realty Income likes to refer to itself as the “Monthly Dividend Company.” And it certainly lives up to the billing. Thus far, investors have been treated to 592 consecutive monthly paychecks.

Its dividend track record is second to none. While most others hike their distributions annually, Realty Income does so every quarter. And since its market debut in 1994, dividends have increased 103 times.

With the payout ratcheting upwards every 90 days, an investor who bought the stock at its IPO is now collecting a yield-on-cost of 26%. Including share price appreciation, the stock has delivered an impressive compound annual return of 16.5% over that span.

Make no mistake, this company was built for a single purpose: to throw off a rising stream of tax-advantaged rental income. Because the company is a REIT, every penny of profit is exempt from the tax bite of Uncle Sam. That leaves more cash on the table divvy up. And distributions are paid out monthly, which means your interest compounds even faster.

To keep dividends moving forward, Realty Income has invested more than $3 billion over the past year, acquiring 51 properties last quarter alone. Meanwhile, adjusted funds from operation (AFFO) has risen by 12%.

Action To Take

Qualifying for the Dividend Aristocrats isn’t, by itself, an actionable event. But Realty Income remains one of my favorite income-producing stocks. It’s easy to see why… We’re up by more than 140% on our position in High-Yield Investing. (The S&P 500, meanwhile, has returned 107% during that time.) And we’re also earning a yield of nearly 7% based on our entry price.

Thanks to a rising share price, you’re “only” getting around 3.5% if you buy today. But if history is any guide, the dividend will continue rising. That’s because not one company in a thousand has paid dependable monthly income for as long as Realty Income. It is quite simply one of the best and most reliable dividend stocks around.

All of this reaffirms my long-term “Buy” rating on this reliable portfolio anchor.

P.S. If you’re looking for more ideas to boost your income, then consider checking out our latest research over at High-Yield Investing. We search every corner of the market to find the highest, safest yields the market has to offer — allowing subscribers to earn thousands in extra income each month. If you’d like to learn more, go here right now.