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Realty Income Corp. (NYSE:O), known as The Monthly Dividend Company, is a reliable real estate investment trust (REIT) and an S&P 500 Dividend Aristocrat.
It has a proven history of paying monthly dividends and increasing them annually.
If you had invested $10,000 in Realty Income at an adjusted stock price of $42.05 per share (reflecting a 1032:1000 stock split in November 2021), you would have purchased about 237.81 shares. At that time, the monthly dividend was $0.1825 per share, giving you an initial monthly income of about $43.40.
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Your investment will look different as of November 2024 depending on whether you reinvested your dividends.
If you had reinvested your dividends over the past 10 years, your initial shares would have grown to 373.98 and your total return would be 100.87%. Your investment value would be $20,086.82.
With Realty Income’s current monthly dividend of $0.2635 per share, your monthly dividend income would now be about $98.54 – more than double what you started with 10 years ago.
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If you collected your dividends as cash instead of reinvesting them, your total return over the past 10 years would be 41.26%, but your number of shares would have remained constant at 237.81.
Based on the current monthly dividend of $0.2635 per share, your monthly dividend would be $62.66. While this is a significant increase from the initial $43.40, it’s considerably less than what you would have earned by reinvesting your dividends.
These examples illustrate the potent combination of dividend reinvestment and compound interest. You can acquire additional shares by reinvesting dividends without requiring any extra cash outlay. This strategy has the potential to significantly amplify your total return and dividend income over the long term, as demonstrated by the Realty Income example.
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While Realty Income remains a reliable choice for investors prioritizing consistent monthly dividend income, it’s essential to acknowledge the inherent market volatility associated with publicly traded stocks. Real estate investing platforms like Arrived present a compelling alternative for those aiming to diversify their income streams and potentially mitigate exposure to market fluctuations.
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