O

[EricL]

With this morning's drop, Realty Income is now nearly 20% off the 52-week high and has passed the magical 5% yield mark.

I think there could be a bit more of a pullback to go, but at 5% it starts to get interesting.

[daat99]

I prefer to buy it at 6% myself, I hope it'll get there soon

[hendi_alex]

The REITs are nowhere close to bottoming. I'm very slowly accumulating, because no one can really know a market. But my accumulation is very slow. Actually this month I added to a couple of REIT funds, but overall trimmed my overall REIT weighting by about 5% when selling HCP last week.

[Dundey]

You'll see the bottom after the first interest rate increase is announced. After that they will start coming back.
Right now, O and STAG are both buys IMHO. They may fall more but starting or adding here will be a long term winner.

[notexactly]

Novice question here.

O obviously has a very appealing dividend, but why are we so interested if the company has a p/e above 40?

Just curious what the logic is. Someone educate me!

[EricL]

(07-14-2015, 11:31 AM)notexactly Wrote: Novice question here.

O obviously has a very appealing dividend, but why are we so interested if the company has a p/e above 40?

Just curious what the logic is. Someone educate me!

REITs are generally valued based on Fund From Operations (FFO) rather than the traditional Earnings Per Shares (EPS).

[notexactly]

(07-14-2015, 11:38 AM)EricL Wrote:

(07-14-2015, 11:31 AM)notexactly Wrote: Novice question here.

O obviously has a very appealing dividend, but why are we so interested if the company has a p/e above 40?

Just curious what the logic is. Someone educate me!

REITs are generally valued based on Fund From Operations (FFO) rather than the traditional Earnings Per Shares (EPS).

So due to this difference, the P/E ratio is inflated?
If this is so, how do we evaluate a company like O? When do we know it's overvalued?

[EricL]

(07-14-2015, 11:40 AM)notexactly Wrote: So due to this difference, the P/E ratio is inflated?
If this is so, how do we evaluate a company like O? When do we know it's overvalued?

The P/E ratio you show is likely correct, it just isn't very relevant for REITs.

Here is an article I wrote last week about the REIT sector. At the time (O) was trading at about 17 times expected 2015 FFO, which I consider about a 6% premium to its "normal" FFO of 16.

[rnsmth]

Added to O in the past week

[twil]

I really want to jump in on this O train.

Real bad.

Torn between several different companies though as it is in my Roth. Might just hold out a bit and see what happens with everything going on in the world.