With the acquisition of ARCT, the company will realize an increase in its portfolio occupancy to 97.6% from 97.2%.
Commenting on the approved acquisition, Chief Executive Officer Tom A. Lewis said, "We are very gratified to have received approval from both Realty Income and ARCT shareholders to complete the acquisition of ARCT. As a result of this transaction, we will significantly advance our strategic objective to increase the overall credit quality of the revenue generated by our tenants. We are also pleased that, due to the significant revenue and earnings growth as a result of this acquisition, we are able to substantially increase our dividend."
Realty Income, also known as "The Monthly Dividend Company," has a long track record for paying and increasing dividends. In fact, the Encindo-based company is one of just eleven equity REITs that were able to maintain and increase dividends during the Great Recession. This year will mark Realty Income's 19th year in a row and the company will be eligible for inclusion into S&P's Dividend Aristocrat organization next year (companies must have 20 years in a row of increased dividends).
I consider Realty Income to be one of the best REITs around and the increased dividend of $.22 per share (in February) will bump the yield north of 5% -- a safe bet in today's low-interest-rate environment. Realty Income shares hit an all-time high last week of $44.35 while shares closed at $44.04.
The investment-grade-rated (BBB by S&P) REIT has a current market cap of $5.877 billion with a year-over-year total return of 28.4%.
At the time of publication the author had no position in any of the stocks mentioned
This article is commentary by an independent contributor, separate from TheStreet's regular news coverage.