Mulzar.com

I like Realty Income and I would definately buy realty income shares if it traded at a bargain price. That’s the problem, I don’t like the idea of buying shares in good companies when they’re expensive. Even if they are solid companies if they are highly priced you won’t see a good annual return because the company’s strong market position is already baked in to the stock price. I’m not going to spend anytime talking about the effective market theory in this article but I am going to talk more about this subject in a future article.

Back to realty income. What do they do? They own commercial properties and rent it out and reward their shareholders with monthly dividends. They have a growing and relatively secure income from their properties. The main reason for that is that they own commercial properties in central spots around in the US and they negotiate deals for the long term. The leases are almost always several years long.

Realty Income, key statistics:

Price per share: $31.08.

Dividend: 5.60%.  $0.143 Dividend per month.

I would buy if it dropped below $25 without a doubt, in my opinion it would be undervalued if hit dropped below $25 per share. I’m fairly certain with some market worries Realty Income will drop quite fast. It’s in the real estate sector so the drop will be harder because of the media bashing. Beware realty income investors. However, Realty income is a great long term dividend stock with a fairer price.

Tags: realty income dividend stock, realty income overvalued, realty income stock, realty income undervalued

This entry was posted on Monday, May 24th, 2010 at 4:01 pm and is filed under Value Investments. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.