Micro Blog #8: O Say Can You See, What A Wonderful Value Is O


With the recent market turmoil, the Monthly Dividend company, The Reality Income Corporation (ticker O) is on sale.

All you have to do is look at the 20 year FastGraphs chart below and decide for yourself.

The black line is the stock price. The orange line is the fair value line. When ever black line (stock price) touches the orange line, the stock is considered at fair value. If price goes below the black line, the stock is considered trading at below fair value.

The dark green area represents FFO (Funds-From-Operation). FFO is a better earnings metric for REITs than EPS. The light green area represents the amount of dividend paid.

The two large boxes, along with red line represents stock price decline from its highest point in July 2016 till yesterday's price, showing a 30% discount from its recent highs. This results in a 5.1% dividend yield, which is considered a gift from gods for such a quality REIT.

Hope you are able to take advantage of the recent pull-back. If not, don't worry as it seems volatility is here to stay for a while, and there will be more opportunities to grab O and other high quality stocks.

Disclosure: I'm very long O and continue to add on big discounts.


  1. I will be watching this one. I should probably go for something geared more towards growth but the monthly dividend payer is attractive.

    1. For those who don't need income now, can think of O as a Monthly Cash Flow Company. The cash flow you get every month can be used for income or reinvestment in other growth stocks. Choice is yours ;)

    2. Kind of like a mother goose that keeps laying golden eggs I reckon.

    3. Exactly! Sometimes people pay too much attention to stock price appreciation, not realizing that their gains are only on the paper (unless they sell) that Mr. Market can take away anytime without any warning.

      With dividends, I get paid now, no matter what the stock price does today, tomorrow, or next year. It's real cash in my pocket.

  2. I have owned O for a while and agree that now may be a good time to add to our investment. The REITs may continue to underperform in the coming months given expectations for higher interest rates, but I wouldn’t mind locking in a nice dividend yield, that will likely continue to grow in the coming years, for the long term.

    1. Well if your goal is to outperform the market then REIT is probably not the right place to be in coming years, but if you are like me and want to grow cash flow and don’t care about beating the market then REITs and Utilities provide great opportunities.

  3. Mr. ATM, I liked O below 55 when I last reviewed it and I like it better at or below 50. Added to my holding in January and may do so again. Tom

    1. O did go slightly below 50 yesterday but recovered a bit. I would buy a little today as it hovers around 50.

  4. Big fan. Picked up a some in January when the price was around $53. It is sitting just above $49 now. Can't beat a 5% yielding company that pays monthly.


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