Many companies today (REITs and non-REITs) are hoping to be like Realty Income; however, the well-balanced REIT has become the "gold standard" in the broader net-lease sector. Realty Income owns more than 3,500 stand-alone properties and due to its cost-based advantage, the company has been able to exploit all of the potential cost drivers that allow for greater efficiency in the company's overall value-add proposition.

This company benefits from its low cost of capital, it very experienced management team, its discipline, its history of 19 years of consistent and increased dividends, and its attractive valuation metrics.

With growing demand in REIT-dom, the marketplace is becoming littered with cheap REITs that are trying to be like "The Monthly Dividend Company." Some REITs have already crashed ( TriNet, US Restaurant Properties, CNL) because they had to compromise their balance sheets and underwriting to be competitive. Others are still trying to carve out a niche.

Realty Income has paid dividends every year since going public in 1994, and raised them for 19 years in a row. The company recently raised its monthly dividend by 19% to 18.09 cents a share following the completion of the acquisition on American Realty Capital Trust. This was the highest increase in distributions done by the monthly dividend company. The new annual dividend at the current rate is at $2.171 a share.

Realty Income has a current market cap of $8.90 billion, and the current common share price is $45.90. (The 52-week high was $46.65 on March 5). The company's year-over-year total return is 30.15%, and the current dividend yield is 4.73%.

Source: SNL Financial, FAST Graph.

This article is commentary by an independent contributor, separate from TheStreet's regular news coverage.
Brad Thomas is the owner/editor of The Intelligent REIT Investor. Under no circumstances does this information represent a recommendation to buy, sell or hold any security. Thomas is also a licensed real estate agent with Bull Realty in Atlanta, GA. He is Managing Director where he advises individual and institutional investors on a variety of commercial real estate related acquisitions. dispositions, and capital markets transactions.

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