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    How Realty Income’s Latest Dividend Bump and AFFO Coverage Will Impact Realty Income (O) Investors

    Simply Wall St·12/19/2025 03:36:34
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    • Earlier this month, Realty Income Corporation increased its monthly common stock cash dividend to US$0.2700 per share from US$0.2695, payable on January 15, 2026 to shareholders of record as of December 31, 2025, lifting the annualized payout to US$3.240 per share.
    • This latest raise, although small, reinforces Realty Income’s multi-decade pattern of consistent dividend growth, supported by expanding European investments, high-profile property deals, and a dividend payout backed by adjusted funds from operations.
    • Next, we’ll examine how this incremental dividend increase, underpinned by solid AFFO coverage, shapes Realty Income’s existing investment narrative.

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    Realty Income Investment Narrative Recap

    To own Realty Income, you need to believe in the durability of its triple net, necessity based retail model and its ability to keep funding growth even when capital is expensive. This tiny dividend bump does not materially change that thesis in the near term, nor does it meaningfully alter the key short term swing factor, which remains the cost and availability of debt, or the biggest risk, which is the growing exposure to European markets and currencies.

    The most relevant recent update alongside this dividend increase is Realty Income’s continued European expansion, which now accounts for a large share of new investments and is being funded partly with sterling denominated debt. That same international push is a potential earnings catalyst if rental income and financing costs stay well aligned, but it also introduces more moving parts for AFFO coverage and dividend sustainability than the company had in its earlier, more domestically focused years.

    Yet even with a long record of monthly dividends, investors should be aware of how rising European exposure could...

    Read the full narrative on Realty Income (it's free!)

    Realty Income's narrative projects $6.2 billion revenue and $1.6 billion earnings by 2028. This requires 4.1% yearly revenue growth and an earnings increase of about $700 million from $908.1 million today.

    Uncover how Realty Income's forecasts yield a $63.38 fair value, a 12% upside to its current price.

    Exploring Other Perspectives

    O 1-Year Stock Price Chart
    O 1-Year Stock Price Chart

    Eighteen members of the Simply Wall St Community currently see Realty Income’s fair value between US$55 and about US$97, with several clustering in the low US$60s. Set those views against the growing European investment concentration, and you can start to judge for yourself how that expansion might influence the company’s long term cash flows and risk profile.

    Explore 18 other fair value estimates on Realty Income - why the stock might be worth just $55.00!

    Build Your Own Realty Income Narrative

    Disagree with existing narratives? Create your own in under 3 minutes - extraordinary investment returns rarely come from following the herd.

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    This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.