Invest in Realty Income Stock Immediately for These 3 Compelling Reasons
Realty Income Corporation, a leading net lease real estate investment trust (REIT), is embarking on a new growth strategy that emphasizes international expansion, particularly in Europe, and a focus on adjacent growth verticals such as private capital. The company has set a $5 billion investment volume target for 2025, with a significant portion of new investments earmarked for Europe, marking a strategic move beyond its traditional U.S. net lease retail properties.
European Expansion
The company has significantly increased its investments in Europe, where the market is more fragmented and offers a larger addressable market. Europe accounted for 76% of its $1.2 billion second-quarter 2025 investments, and the region now constitutes about 17% of its annualized base rent. Realty Income views Europe as a key growth driver for its global platform.
Private Capital and Adjacent Verticals
In addition to real estate acquisitions, Realty Income is focusing on adjacent growth verticals such as private capital, enabling the company to leverage financial solutions beyond direct property ownership and potentially participate in a broader set of investment opportunities.
Full-service Capital Solutions
Realty Income offers credit solutions and full-service capital, facilitating more diverse deal executions and positioning itself within the global $14 trillion net lease market.
Continued U.S. Portfolio Optimization
While expanding internationally, Realty Income remains selective in the U.S., focusing on higher-quality assets and maintaining a strong rent recapture rate, supported by predictive analytics for asset management.
The company's growth strategy balances traditional net lease retail with diversified geographic expansion, particularly in Europe, and financial innovation through private capital and credit solutions.
Large Size and Attractive Cost of Capital
Realty Income's large size gives it easy access to capital markets and an attractive cost of capital due to its investment-grade-rated balance sheet.
Reliable Dividend Stock
Realty Income's reliability as a dividend stock is a good attribute, especially in the context of its slow and steady growth. The company's expansion into new investment areas may help it maintain its dividend yield, which is currently significantly higher than the average REIT and the S&P 500 index.
Diversification and Resilience
Realty Income's diversification into non-traditional investments (casinos, data centers, loans, and investment management) may help it weather market fluctuations better. The company's portfolio consists of over 15,600 properties, with a heavy focus on net lease retail properties and exposure to industrial assets.
The REIT sector is currently out of favor due to the rise in interest rates, making it an opportunity for long-term dividend investors to pick up attractive yields such as Realty Income's. With a current dividend yield around 5.6%, significantly higher than the average REIT (4.1%) and the S&P 500 index (1.2%), Realty Income's focus on diversification and growth strategies may make it a more resilient investment choice in the long term.
[1] CNBC. (2021). Realty Income Corp. (O). MarketWatch. https://www.marketwatch.com/investing/stock/o
[2] Seeking Alpha. (2021). Realty Income Corporation Q2 2021 Earnings Call Transcript. Seeking Alpha. https://seekingalpha.com/news/3729541-realty-income-corporation-q2-2021-earnings-call-transcript
Investing in Europe is a significant part of Realty Income Corporation's growth strategy, accounting for 76% of its second-quarter 2025 investments and 17% of its annualized base rent.
Realty Income is also focusing on financial solutions beyond direct property ownership, such as private capital, to enable leverage in a broader set of investment opportunities.
Realty Income's large size gives it easy access to capital markets and an attractive cost of capital due to its investment-grade-rated balance sheet, making it an attractive choice for long-term investors.
