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Realty Income Corporation
Real Estate · REIT - Retail · United States · Stock
Score Breakdown
Scored for Speculative Opportunities profile
Sub-scores are 0–20 each; Model Score is weighted by your selected investment goal. How it works →
Why Ranked Here
- The composite score of 58.3/100 reflects solid but not exceptional growth and profitability metrics, including 9.1% revenue growth and a 20.1% operating margin, balanced against structural constraints like a 1.5% return on assets.
- Consistent quarterly revenue and operating income acceleration contributed positively to the momentum factor, supporting the mid-range composite result.
- The absence of a macro theme assignment and the elevated dividend payout ratio of 275.9% both weighed on the overall score, preventing a higher composite result.
Why Not Higher
- The dividend payout ratio of 275.9% in FY2025 — dividends far exceeding GAAP net income — likely constrained the dividend factor score, as the model flagged this as a sustainability concern.
- With no assignment to any of the 24 tracked macro themes, Realty Income received no theme-based score contribution, which held back the composite from reaching a higher level.
Data Confidence
10 / 10
Very High — full data coverage
Why This Score
Grounded in figures from this company's SEC EDGAR filings — not a restatement of the score itself.
Revenue grew from FY2024's $5,271,142,000 to FY2025's $5,749,377,000, a gain of 9.1%. Net income rose 23.0% over the same period, from $860,772,000 to $1,058,590,000, while diluted EPS increased 19.4% from $0.98 in FY2024 to $1.17 in FY2025.
The model rewarded solid double-digit earnings and EPS growth, though the mid-range score suggests the top-line revenue growth rate of 9.1% tempered the overall result relative to higher-growth benchmarks.
In FY2025, Realty Income posted a net margin of 18.4% and an operating margin of 20.1%, while return on assets came in at 1.5%.
The model recognized meaningful operating and net margins, but the very low return on assets of 1.5% in FY2025 — typical of asset-heavy REITs — likely constrained the score from reaching the upper range.
Filing evidence currently available does not support a more specific explanation for this factor.
Revenue showed a consistent upward trend across the most recent four quarters: $1,410,378,000 in 2025Q2, $1,470,552,000 in 2025Q3, $1,487,942,000 in 2025Q4, and $1,548,727,000 in 2026Q1. Operating income similarly accelerated, rising from $223,076,000 in 2025Q2 to $341,498,000 in 2025Q3, $323,436,000 in 2025Q4, and $347,130,000 in 2026Q1.
The model rewarded the steady sequential revenue acceleration and the recovery and expansion in operating income over the trailing four quarters, reflecting improving operational momentum.
Realty Income's dividends per share have grown steadily from $2.967 in FY2022 to $3.051 in FY2023, $3.1255 in FY2024, and $3.217 in FY2025, but the dividend payout ratio in FY2025 stood at 275.9% of net income.
The model acknowledged the consistent dividend growth trend across FY2022–FY2025, but the payout ratio of 275.9% in FY2025 — reflecting dividends far exceeding GAAP net income, a common REIT characteristic — likely weighed on the score as a sustainability concern under the model's framework.
Realty Income is not currently assigned to any of the 24 tracked macro themes in the model.
The absence of a macro theme assignment means the security did not receive any theme-based score contribution under the current methodology; this reflects the model's current classification state and is not an indicator of the company's investment characteristics.
Research Summary
AI-generated analysis reflects data and conditions as of the report date shown above. Verify any specific figures through primary sources before acting on this analysis.
Realty Income Corporation posted solid FY2025 results, with revenue rising 9.1% to $5,749,377,000 and net income climbing 23.0% to $1,058,590,000, while diluted EPS grew 19.4% to $1.17. The company maintains meaningful operating and net margins of 20.1% and 18.4% respectively, though its return on assets of 1.5% reflects the capital-intensive nature of its REIT business model. Quarterly momentum has been consistently positive, with revenue accelerating each of the last four reported quarters and operating income recovering and expanding. The composite score of 58.3/100 with a Medium risk rating and a 'Research Further' label reflects a balanced picture of operational strength tempered by a very high dividend payout ratio and the absence of a macro theme assignment.
Plain English
Realty Income is a large real estate company that grew its earnings and revenue nicely last year and has been steadily increasing its dividend for years, but it pays out far more in dividends than it earns in GAAP profit, and it doesn't fit into any of the model's special investment themes right now — so it scores in the middle of the pack and warrants more research before acting.
Bull Case vs. Bear Case
Bull Case
- Earnings growth has been strong: net income rose 23.0% year-over-year to $1,058,590,000 in FY2025, and diluted EPS increased 19.4% from $0.98 to $1.17, demonstrating meaningful bottom-line improvement.
- Quarterly revenue has accelerated consistently across the last four reported periods — from $1,410,378,000 in 2025Q2 to $1,548,727,000 in 2026Q1 — while operating income has also expanded, signaling improving operational momentum.
- Realty Income has grown its dividends per share every year from $2.967 in FY2022 to $3.217 in FY2025, reflecting a multi-year track record of returning increasing income to shareholders.
Bear Case
- The dividend payout ratio stood at 275.9% of net income in FY2025, meaning dividends paid far exceeded GAAP earnings, raising questions about sustainability under a traditional income-coverage framework.
- Return on assets was only 1.5% in FY2025, reflecting the asset-heavy nature of the REIT business model and limiting the profitability score despite solid margins.
- Realty Income is not assigned to any of the 24 tracked macro themes in the model, meaning it received no theme-based score contribution, which weighed on the composite result.
What Could Change the Picture
Bullish Triggers
- A sustained acceleration in quarterly revenue and operating income beyond the current trend — building on the progression from $1,410,378,000 in 2025Q2 to $1,548,727,000 in 2026Q1 — could signal stronger-than-expected top-line momentum.
- If the model were to assign Realty Income to one or more of its 24 tracked macro themes, the company could receive an additional score contribution that is currently absent.
Bearish Triggers
- A reversal or stagnation in the quarterly operating income trend — which recovered from $223,076,000 in 2025Q2 to $347,130,000 in 2026Q1 — would undermine the momentum case and could pressure the composite score.
- If the dividend payout ratio remains well above 100% of net income without improvement, concerns about long-term dividend sustainability could intensify under the model's framework.
Risk Profile
Medium RiskRealty Income carries a Medium risk rating, supported by a large total asset base of $72,795,612,000 in FY2025 and a consistent upward trend in quarterly revenue and operating income over the last four reported periods. However, the asset-heavy balance sheet typical of REITs and the variability in quarterly net income — ranging from $196,919,000 in 2025Q2 to $315,771,000 in 2025Q3 — suggest investors should monitor earnings consistency carefully.
This report is for educational and research purposes only. It does not constitute financial, investment, legal, or tax advice — always conduct your own due diligence before making investment decisions.