Many companies take pride in raising their dividend every year
without a single miss.
Real estate investment trust (REIT)Realty Income (
), however, can point to increasing its dividend in each of the
past 66 quarters.
Yes, that's no typo: The Escondido, Calif.-based company has
raised its dividend every quarter for more than 16 years.
Also, Realty Income pays its dividend monthly rather than
quarterly, a feature that many retirees prefer.
The company has 4,200 properties in 49 states and Puerto Rico.
The holdings are diversified across 47 industries. Most tenants
operate retail stores providing nondiscretionary goods and
Five tenants accounted for a total of 25% of rental revenue as
of March 31:Walgreen (
),Dollar General (
), LA Fitness andFamily Dollar (
Most leases are net leases. In other words, tenants pay rent
every month but are responsible for taxes, insurance and
maintenance. Leases typically run for 10 to 20 years.
The occupancy rate since 1992 has varied from a low of 96.6%
in 2010 to a high of 99.5% in 1998. Last year, the occupancy rate
was 98.2% -- the highest since 2006.
As a REIT, Realty Income pays no federal income taxes as long
as the company pays 90% of taxable income as dividends.
The payout on Monday will be to shareholders of record June 2.
Shareholders will receive fractionally more than 18 cents a
share. The annualized payout is about $2.19 a share for a current
yield of 5%.
In Q1, funds from operations rose 7% while revenue increased
Family Dollar recently announced a plan to close about 5% of
its older and smaller-format stores. However, Realty Income CEO
John Case said at the May conference call that the effect on
Realty will be "nonexistent to minimal." Realty doesn't own the
older Family Dollar sites, and the average lease term on Family
Dollar is 13 years. Even if the stores closed, rent payments