Realty Income: 99% Occupancy, 5.1% Yield as Fed Pauses
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- Realty Income owns more than 15,500 single-tenant, net-leased properties and maintained an occupancy rate of almost 99% in 2025, anchored by blue-chip tenants including Dollar General, Wynn Resorts, and Tractor Supply.
- Realty Income invested roughly $6.3 billion in additional properties in 2025 and issued convertible senior notes at rates between 3.375% and 5.125%, securing low-cost capital to fund further expansion despite the Fed's rate-cut pause.
- Realty Income reported 2025 revenue of $5.75 billion (up 9% year-over-year) and net income of $1.06 billion attributable to the company, a 23% increase from the prior year, even as interest costs climbed about 12%.
- Realty Income generated $3.89 billion in funds from operations ($4.25 per diluted share) in 2025, comfortably covering its approximately $3.25 per share annual dividend and producing a 5.1% cash yield versus the S&P 500's 1.2% average.
- Realty Income's 54 P/E ratio looks expensive on the surface, but its price-to-FFO multiple of roughly 15 frames the REIT as a bargain, according to the analysis.
Why it matters: Income investors watching the Fed's pause have a concrete case study: Realty Income covered its 5.1% dividend with FFO of $4.25 per share while investing $6.3 billion in new properties, showing that high-yield REITs can still grow and pay out even when rate cuts are off the table. The price-to-FFO gap (15) versus headline P/E (54) is the kind of valuation mismatch that matters for dividend investors deciding whether to buy the dip.
