Realty Income Recovers Slowly, But Dividend Aristocrats Still Face Real Risks

Realty Income (NYSE:O) stock has rebounded over the past two weeks, climbing from a low of $53 to $56. The bounce has helped recover part of the decline that began in July, when the shares fell from $66.20 to a low of $53.15 earlier this month. Still, the company faces risks as interest rates continue to rise.

Realty Income Stock Rebounds Amid Dip Buying

Realty Income, a top dividend aristocrat, has come under pressure in the past few months as interest rates soared. After peaking at $66.20 earlier this year, the stock retreated to a low of $53.15. 

Realty Income is sensitive to high interest rates because it relies on debt to finance its property acquisitions. As yields rise, its borrowing costs rise with them. In its latest earnings report, the company said interest expense increased to $312 million from $283 million a year earlier. For the first half of the year, interest expense climbed to $604 million from $552 million.

US bond yields have been in a strong upward trend this year, with the ten-year rising to a 20-year high of 5.3%. Some analysts, including PIMCO’s Dan Ivascyn, believe that the yield could jump to 6% this year. As such, some investors have sold REITs like Realty Income and rotated to the bond market. 

Recently, however, Realty Income stock has crawled back as bond yields have cooled. The ten-year has dropped from 5.37% earlier this month to 5.08%, while the ten-year has moved from 4.96% to 4.715%. 

Realty Income’s Core Business is Doing Well

On the positive side, Realty Income’s core business is doing well, with its revenue continuing to rise. Its last earnings report showed that its revenue rose to $1.54 billion in the second quarter from $1.41 billion in the same period last year. Its six-month revenue rose to $3.09 billion from $2.7 billion. 

The annual revenue metrics are expected to keep growing in the coming years. Analysts predict that it will hit $5.78 billion this year, up by 6.3% from last year. 

Most notably, the company’s occupancy rate was 98.8%, a slight decrease from 98.9% in March this year. This is a good occupancy rate that demonstrates that its tenants are doing well.

Realty Income Stock Faces Technical Risks

On the charts, Realty Income stock bottomed at $53.40 this month. A closer look shows that this level coincided with its lowest level in November and December 2025 and January last year. It is common for stocks to bounce back after hitting a crucial support level.

The stock has formed a death cross pattern, suggesting that more downside is possible. It also remains below the Ichimoku Cloud indicator. Therefore, there is a risk that this rebound is a bull trap, suggesting that it may resume the downward trend, potentially to $53.30. 

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