"O" Realty Income Corp

[orchid]

Bought some "O" common (REIT) at close of market as it dipped below $40 today.

Yield approx 5.5%, this is a monthly payer.

Also own some of their O-F, Preferred with a yield of about 6.8%, not a Dividend Grower but this is also a monthly payer.

FWIW

Orchid

[InspBudget]

Hi, Orchid. nice to see you and Alex on this forum. I recently joined up.

Also own O-F, bought ( unfortunately ), at quite a bit above par. But holding on as the income stream is very dependable.

Looking to buy O if it goes to the low $35 range.

I am sure you are following CHSCO, are you not? Xot is very positive on it. I bought another lot at $27.30, my average cost is now $26.85. I like the financials, and the yield. I think this one's a keeper. But since this one does not have dividend growth which is what this forum is all about, I'll not say more.

IB

[orchid]

Hi Inspector Budget:

Looking at the Chart covering "O" common suggests that the 52 week low was in the $37 range and that took place last November 2012.

There was a dip just below $39 earlier this September otherwise the $40 bracket seems to be the home for Realty Income common. Of course in this market and given the problems that surround us - anything can happen.

But I decided to take a chance and buy a small quantity as the price broke below $40 today, my purchase was at $39.73.

Regards from Orchid

[hendi_alex]

Hi guys. Am enjoying this forum which is very simple to navigate and otherwise is user friendly. Posters also have a manner that is easy to like.

I bought O on 8/29 at $39.42, just 100 shares in my small cash account. Am hoping for it to become a long term holding, even accumulating when both cash availability and share price cooperate.

[Kerim]

Hello Orchid and InspBudget -- thanks for joining up and welcome to the forum!

I've had O on my watch list for a while now, and I often look at it longingly. I'm not interested in upping my REIT allocation right now, but when I am (or if O goes on a deep sale), I may pick up a bit. I've been under the impression that O is one of those stocks that usually carries a quality premium.

[Horace Cugle]

I'm 62 and retired, not taking any money from IRA's until RMD's kick in. O would probably be a good stock for me to start getting into.

I'm having some trouble with it though because I'm not drawing income from my investments yet. Yes it's had 25% knocked off the price and that makes it attractive but you need a microscope to see the dividend growth, and if it's in an IRA you can't spend the big dividend anyway. Regardless, it's on sale and it's a quality company, I just don't think it's suitable for investors who value DG over yield.

One other thing....I would imagine there might be some heavy tax loss selling as we approach year's end. Maybe something to think about.

[ChadR]

The hope for some heavy tax loss selling is the reason I'm starting to conserve cash and wait for purchases until closer to the end of the year. Hopefully this strategy doesn't hurt me this year. It has been a proven strategy in prior years for me.

[InspBudget]

(10-01-2013, 11:01 AM)Horace Cugle Wrote: I'm 62 and retired, not taking any money from IRA's until RMD's kick in. O would probably be a good stock for me to start getting into.

I'm having some trouble with it though because I'm not drawing income from my investments yet. Yes it's had 25% knocked off the price and that makes it attractive but you need a microscope to see the dividend growth, and if it's in an IRA you can't spend the big dividend anyway. Regardless, it's on sale and it's a quality company, I just don't think it's suitable for investors who value DG over yield.

One other thing....I would imagine there might be some heavy tax loss selling as we approach year's end. Maybe something to think about.

Horace,

You are absolutely correct in that DG is small with O. however, look at the years where the dividend has been sustained, with many of those years seeing small increases. They add up over time.

O has a strong tenant base, and is well positioned as their locations are in good, high traffic areas for the most part.

The most recent glitch where one of their larger customers, a chain of Buffet Restaurants, went bust was a year ago, and even then O recovered pretty fast, and the small DG was not affected.

If you hold O, you can rest assured there will be little risk of a dividend cut. And small but accretive divy increases over time.

The selloff has created a great opportunity, I hold some O now, but really looking to add.

As you have said, there may be tax loss selling later this year. I hope to get more at around $35-$37.

[fiveoh]

(10-01-2013, 11:36 AM)InspBudget Wrote:

(10-01-2013, 11:01 AM)Horace Cugle Wrote: I'm 62 and retired, not taking any money from IRA's until RMD's kick in. O would probably be a good stock for me to start getting into.

I'm having some trouble with it though because I'm not drawing income from my investments yet. Yes it's had 25% knocked off the price and that makes it attractive but you need a microscope to see the dividend growth, and if it's in an IRA you can't spend the big dividend anyway. Regardless, it's on sale and it's a quality company, I just don't think it's suitable for investors who value DG over yield.

One other thing....I would imagine there might be some heavy tax loss selling as we approach year's end. Maybe something to think about.

Horace,

You are absolutely correct in that DG is small with O. however, look at the years where the dividend has been sustained, with many of those years seeing small increases. They add up over time.

O has a strong tenant base, and is well positioned as their locations are in good, high traffic areas for the most part.

The most recent glitch where one of their larger customers, a chain of Buffet Restaurants, went bust was a year ago, and even then O recovered pretty fast, and the small DG was not affected.

If you hold O, you can rest assured there will be little risk of a dividend cut. And small but accretive divy increases over time.

The selloff has created a great opportunity, I hold some O now, but really looking to add.

As you have said, there may be tax loss selling later this year. I hope to get more at around $35-$37.

I like O but wouldn't buy above $36 currently. I'm guessing we might see some more REIT pain once the fed starts tapering.

[Horace Cugle]

I'm keeping an eye on it, but really I need to dig a little deeper and learn more about the company since I've only been following it a few months, and don't really follow real estate much any way. At $36 it'll yield 6%.

The DG really bothers me though, after 20 years at 1.5% DGR the YOC isn't even to 7.50%. All things equal, a 3.0% yield 10% DGR does that in about 9 years, then it's all gravy (on paper at least).

It just depends on what you're looking for; if you need a big payout now, O is great. If you want a big payout 10-20 years down the road, O is decent, but we can do better.

[hendi_alex]

One thing that a person needs to consider is that with those 10-20 year's worth of 6% dividends, lots of shares of faster dividend growing stocks can be purchased. IMO a few cash cows (high yield but slower growing) in the portfolio provide a great cash flow that can be used for timely purchases of bargains as they appear. Sometimes fresh funding is hard to come by, but the cash cows will continue to give a steady stream of investment cash. A person may not want to be too overweight in higher yielding, slower growing stocks, not in a dividend growth portfolio, but 20%-30% weighting could aid in the overall objective of building a high growth portfolio. That is especially true during deep market contractions, when the dividends can buy 2X or more shares per investment dollar as compared to buying during an up market.

[orchid]

Of course we each have different needs, different risk tolerances and different goals. I am 81 years of age and so my goal is to earn 5% to 7% on my investments and I have a shorter time horizon when considering those investments..

One of the goals I considered in my earlier investing days was Total Return, sum total of dividends plus increase in share price.

The common stock of Realty Income "O" was at about $24 - 5 years ago and closed yesterday at $40.65. I have not done the calculation but perhaps that possible Total Return helps and is worth considering when weighing the value and worth of having Realty Income in ones Portfolio.

Regards to you and to all from Orchid