Realty Income Corp offers reliable monthly dividends with tax advantages for investors.

From Yahoo Finance: 2025-06-19 15:01:00

Realty Income Corp (NYSE: O) is known as The Monthly Dividend Company® with over 660 consecutive monthly dividend payments. Beyond its reliable income, shareholders benefit from depreciation, a tax advantage that allows the company to pay out more in dividends than its taxable income. This strategy can defer taxes and potentially result in lower rates later.

In 2024, Realty Income paid out $3.126 per share in dividends, exceeding its taxable income. This is due to REIT taxation rules that require distributing at least 90% of taxable income to shareholders. The difference between taxable income and cash flow allows for higher dividends without increased tax liability for investors.

Realty Income recently announced its 131st dividend increase, reflecting consistent growth. Analysts remain bullish on the stock, with price targets averaging $60.33 and a 5.61% yield. The company is a favorite among retail investors and large institutional holders like Vanguard, BlackRock, and State Street.

An emerging asset class in real estate is gaining attention, offering investors exposure to rising home values with protection against price drops. Another lucrative market leverages the $34 trillion in home equity Americans hold. Home Equity Agreements (HEAs) are a strategy allowing investors to tap into this growth potential.

A new fund, U.S. Home Equity Fund I, has been launched to provide individual accredited investors access to the growing home equity market. This fund targets a 14%-17% net IRR with a strategy designed to yield positive returns even in market downturns. It aims to capitalize on the vast equity tied up in residential properties.

Read more: How Realty Income Investors Are Benefiting From One Of Real Estate’s Most Overlooked Tax Advantages