Reviewing Realty Income (O) and Its Rivals
Realty Income (NYSE: O) is one of 77 public companies in the “Commercial REITs” industry, but how does it compare to its peers? We will compare Realty Income to related businesses based on the strength of its valuation, analyst recommendations, risk, institutional ownership, dividends, profitability and earnings.
Insider & Institutional Ownership
70.0% of Realty Income shares are held by institutional investors. Comparatively, 73.2% of shares of all “Commercial REITs” companies are held by institutional investors. 0.3% of Realty Income shares are held by insiders. Comparatively, 7.3% of shares of all “Commercial REITs” companies are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.
Earnings and Valuation
This table compares Realty Income and its peers top-line revenue, earnings per share and valuation.
|Gross Revenue||Net Income||Price/Earnings Ratio|
|Realty Income||$1.10 billion||$315.57 million||45.56|
|Realty Income Competitors||$537.26 million||$100.34 million||404.54|
Realty Income has higher revenue and earnings than its peers. Realty Income is trading at a lower price-to-earnings ratio than its peers, indicating that it is currently more affordable than other companies in its industry.
Realty Income pays an annual dividend of $2.54 per share and has a dividend yield of 4.6%. Realty Income pays out 208.2% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. As a group, “Commercial REITs” companies pay a dividend yield of 4.0% and pay out 93.5% of their earnings in the form of a dividend. Realty Income has raised its dividend for 21 consecutive years.
This table compares Realty Income and its peers’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Realty Income Competitors||53.33%||6.54%||3.83%|
This is a breakdown of current ratings for Realty Income and its peers, as reported by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Realty Income Competitors||637||2602||2240||24||2.30|
Realty Income currently has a consensus price target of $66.60, indicating a potential upside of 19.83%. As a group, “Commercial REITs” companies have a potential upside of 6.65%. Given Realty Income’s higher possible upside, equities research analysts plainly believe Realty Income is more favorable than its peers.
Volatility & Risk
Realty Income has a beta of 0.29, meaning that its stock price is 71% less volatile than the S&P 500. Comparatively, Realty Income’s peers have a beta of 0.77, meaning that their average stock price is 23% less volatile than the S&P 500.
Realty Income peers beat Realty Income on 11 of the 15 factors compared.
About Realty Income
Realty Income Corporation is a real estate investment trust (REIT). The Company is engaged in in-house acquisition, portfolio management, asset management, credit research, real estate research, legal, finance and accounting, information technology and capital markets capabilities. As of December 31, 2016, the Company owned a diversified portfolio of 4,944 properties located in 49 states and Puerto Rico, with over 83.0 million square feet of leasable space leased to 248 different commercial tenants doing business in 47 separate industries. As of December 31, 2016, of the 4,944 properties in the portfolio, 4,920, or 99.5%, were single-tenant properties, and the remaining were multi-tenant properties. As of December 31, 2016, of the 4,920 single-tenant properties, 4,836 were leased with a weighted average remaining lease term (excluding rights to extend a lease at the option of the tenant) of approximately 9.8 years.
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