Connect with us


If you invested $1,000 in real estate income stocks five years ago, this is how much you would have today




Motley Fool

Passive income investors love it real estate investment funds (REITs) because their dividends are often high-yielding and reliable. REITs are required to pay out 90% of their income as dividends, which can lead to high payments.

Real estate income (NYSE:O) is one of the best. It is a retail REIT and leases its properties to some of the most stable essential retailers so that it reliably gets its rent and pays its dividends. It has the rare feature of also paying monthly dividends, making it even more attractive to some investors. The stock’s most recently declared monthly dividend is $0.2625 per share, which amounts to a forward return of approximately 5.7%.

Let’s see how much money you would have today if you had invested $1,000 five years ago.

The magic is in the dividend

Dividend-paying companies have generally passed the high growth stage. Investors do not expect high profits from the stock itself. Broadly speaking, the higher the dividend yield, the lower the expectation that the share price will rise.

Realty Income shares are down 4% this year. Because yields work inversely with price, yields have risen as Realty Income shares have fallen. The 5.7% yield at the current share price is more than quadruple the S&P500 average.

If you invested $1,000 in Realty Income stock five years ago, you would have $1,040 today if you reinvested the dividends. That includes an 18% drop in share price. The market is not kind to real estate stocks in the high interest rate environment. Realty Incomes’ own stock dividend has risen 16% over the past five years.

The stock is popular with dividend investors because it comes with Realty Income’s rock-solid stability: It has paid a monthly dividend for more than 53 years, with 107 consecutive quarterly increases.

For passive income investors, Realty Income is a great option.

Should you invest €1,000 in real estate income now?

Consider the following before purchasing shares in Realty Income:

The Motley Fool stock advisor The analyst team has just identified what they think is the 10 best stocks for investors to buy now… and Realty Income wasn’t one of them. The ten stocks that survived the cut could deliver monster returns in the coming years.

Think about when Nvidia created this list on April 15, 2005… if you had $1,000 invested at the time of our recommendation, you would have $652,342!*

Stock Advisor provides investors with an easy-to-follow blueprint for success, including portfolio building guidance, regular analyst updates, and two new stock picks per month. The Stock Advisor is on duty more than quadrupled the return of the S&P 500 since 2002*.

View the 10 stocks »

*Stock Advisor returns May 13, 2024

Jennifer Saibil has no position in any of the stocks mentioned. The Motley Fool holds positions in and recommends Realty Income. The Motley Fool has one disclosure policy.

If you invested $1,000 in real estate income stocks five years ago, this is how much you would have today was originally published by The Motley Fool