Passive Income: How Much Would You Need to Invest in Realty Income (O) Stock to Collect $1,000 in Annual Dividends?

Investors give Realty Income (O -0.90%) a closer look because of its dividend income. Given the right amount of initial investment, the stock could easily generate $1,000 or more annually. But is Realty Income a high-quality stock that deserves your money? I think so.

It’s important to know that Realty Income is a real estate investment trust (REIT), which is a kind of company that owns many real estate properties, leasing them out to tenants, and collects rents that it then uses to buy more properties and pay out most of its net profits to shareholders.

Realty Income does this effectively because it relies on “triple-net leases” with its tenants, where the tenants are responsible for real estate taxes, insurance, and operating expenses on the property (not the owner). Operating this way keeps things simpler for Realty Income.

Image source: The Motley Fool.

Realty Income’s portfolio, meanwhile, is hefty, featuring more than 15,500 properties leased under long-term contracts to more than 1,700 clients. It’s focused on retail, industrial, and agricultural clients, representing about 90-plus industries.

Here’s a clear sign of its quality: The company’s overall occupancy level for its properties is 98.8% and never falls below 96%. That reflects stability and helps it maintain a dependable dividend.

As for the dividend, it’s paid monthly rather than quarterly. And the dividend yield at the moment is a sizeable 5.2%. For context, the S&P 500‘s dividend yield is only 1.04%. Realty Income’s payout has been growing consistently for 31 years, too!

Today’s Change

(-0.90%) $-0.57

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Current Price

$62.60

Key Data Points

Market Cap

$59BMarket cap calculated using publicly traded shares outstanding only. Does not include unlisted, private, or dual-class non-traded shares. Implied market cap may vary.

Day’s Range

$62.50 – $63.40

52wk Range

$55.86 – $67.94

Volume

4.1M

Avg Vol

5.9M

Gross Margin

50.82%

Dividend Yield

5.18%

So, how many shares of Realty Income do you need if you’re seeking $1,000 in annual income? Each share recently delivered $0.271 per month ($3.252 over the trailing 12 months), so you need about 308 shares. With shares trading around $63, you would need $19,400 to buy in now and get $1,000 annually.

The stock isn’t a fast grower, but it is likely to keep delivering meaningful income to you. And it’s expanding it property segments to boost its growth — including data centers. Take a closer look if you’re intrigued.