Realty Income diversifies with gaming properties, facing challenges in growth and performance

From Investing.: 2024-06-14 09:03:00

Realty Income (NYSE: O) ventures slightly beyond its core competency with acquisitions of gaming properties, but it only makes up 2.9% of the portfolio and offers additional diversification. However, the 5.9% cap rate may be a concern in the current environment. O preferred shares from SRC offer great credit quality but a low rate, trading over $24, making them less attractive. Interest rates play a significant role in O’s performance, impacting net lease REITs more than most others. With challenges in sustaining past growth rates due to size and competition, O’s future success remains uncertain. Consider other net lease REITs like Agree Realty (NYSE: ADC) and National Retail Properties (NYSE: NNN) as potential alternatives.



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