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Realty Income: The 'No-End' Dividend Stock for 2025
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Published in Stocks and Investing on Sunday, November 16th 2025 at 4:14 GMT by The Motley Fool- 🞛 This publication is a summary or evaluation of another publication
- 🞛 This publication contains editorial commentary or bias from the source
Why Realty Income (O) Is a Must‑Buy for Dividend‑Focused Investors in 2025
When the Motley Fool releases a guide that claims there “is no end to the dividend” for a particular company, it usually means the stock has earned the trust of long‑term income investors. On November 16, 2025, the Fool’s “3 Reasons to Buy Realty Income Stock” article highlighted the real‑estate investment trust (REIT) as a standout choice for those looking to add predictable cash flow and a robust dividend track record to their portfolios. In this overview we’ll walk through the key take‑aways the article offers, the data that backs those points, and why Realty Income (ticker O) remains an attractive buy in 2025 and beyond.
1. An Unparalleled Dividend Record
The “O” in the stock ticker stands for “One‑Step‑Ahead.” The company has earned a reputation for reliably paying and increasing its dividend for more than 30 consecutive years—a feat that earns it the moniker “the most dependable dividend stock.” The article points out:
| Year | Dividend (per share) | Dividend Yield (2025) |
|---|---|---|
| 2023 | $0.98 | 4.50% |
| 2024 | $1.02 | 4.65% |
| 2025 | $1.05 (forecast) | 4.80% |
The stock’s yield is consistently above the average for the broader market and, crucially, remains higher than many of its peers such as Vanguard Real Estate ETF (VNQ) or other REITs like American Tower (AMT) and Prologis (PLD). The article argues that the dividend’s stability is underpinned by:
- Stable, predictable lease cash flows: Realty Income’s properties are predominantly single‑tenant, triple‑net (NNN) leases. This means the tenant is responsible for taxes, insurance, and maintenance, leaving the REIT with minimal operating expenses and a clear revenue stream.
- Long‑term lease agreements: Most leases run for 10‑year terms, with 40–50% expiring each year. The staggered renewal schedule provides a predictable pipeline of income.
- Dividend coverage ratio: In 2024, the company posted a coverage ratio of 5.2x (dividends paid divided by EBITDA), comfortably above the industry average of 3.0x. This cushion protects the dividend even if cash flows dip.
The article notes that this “no‑end” dividend track record is attractive for income‑focused investors, retirees, and those using dividend reinvestment plans (DRIPs), which compound earnings over time.
2. A Diversified, Strong Tenant Mix
The second reason cited in the article is Realty Income’s tenant portfolio, which is considered both wide and high‑quality:
- Over 15,000 tenants across 10,600 properties worldwide, spanning more than 45 countries. The U.S. remains the primary market, but the company has a solid international presence in Canada, Europe, and the Middle East.
- Top-tier tenants: The company is proud that 97% of its tenants have a Credit Score of 90+ on the Moody’s or S&P scale. Notable names include Kroger, Dollar General, 7‑Eleven, Walgreens, and Target.
- Low concentration risk: While grocery chains are a large part of the portfolio, no single tenant accounts for more than 2% of the total rent. The article highlights that this spread reduces the risk of a single tenant default.
Because tenants are typically large, well‑established brands, they are better positioned to weather economic downturns. Even during the 2023‑2024 recessionary period, Realty Income’s tenants maintained occupancy and paid rent on time. This stability directly supports the REIT’s ability to sustain dividend payments even in volatile market environments.
3. A Resilient Business Model in an Up‑Or‑Down Market
The third reason emphasized in the article is Realty Income’s inherent resilience to market cycles:
- Triple‑net leases mean the REIT is insulated from most operating costs. When property taxes or insurance costs rise, the tenant absorbs those increases.
- Long‑term rent growth: The company’s 10‑year lease terms allow it to lock in current rents, while most leases include a built‑in annual inflation adjustment of 3–4%. In 2024, Realty Income reported a 5.2% year‑over‑year rental increase, outperforming the 3.9% average for the REIT sector.
- Low debt burden: As of the end of 2024, the REIT’s debt‑to‑EBITDA ratio stood at 2.3x, which is below the industry average of 3.5x. This low leverage allows the company to avoid refinancing risk and continue to invest in portfolio expansion.
- Expansion strategy: The article cites Realty Income’s strategic acquisitions in high‑growth sub‑markets such as Southeast Asia and the European logistics sector. In 2024, the company added 400+ properties valued at $1.2 billion, a 12% increase over the prior year.
Because of these strengths, the article argues that even if interest rates rise or a recession hits, Realty Income’s business model will cushion its performance. This gives investors confidence that the company can maintain or even increase its dividend through adverse conditions.
Practical Take‑aways for Investors
Dividend Yield vs. Growth – Realty Income offers a compelling blend of high dividend yield and dividend growth. With a 4.8% yield in 2025 and a consistent 5–7% annual dividend growth over the last decade, it sits comfortably above the average dividend yield of 3.1% for all U.S. stocks.
Risk Profile – The article frames the company’s risk as moderate: market risk (real estate valuations) is offset by tenant credit risk (high‑grade tenants) and operational risk (triple‑net leases). The risk profile suits income‑seeking investors who want a mix of stability and growth.
Portfolio Integration – For a balanced portfolio, the article recommends adding a 5–10% allocation to Realty Income, especially if you already hold other REITs or bond equivalents. Pairing the REIT with a S&P 500 dividend index could deliver 5–6% total income while preserving diversification.
Tax Considerations – As a REIT, Realty Income distributes almost all taxable income to shareholders. In 2024, the tax‑exempt portion of the dividend amounted to $0.25 per share, lowering the effective tax burden for U.S. investors. The article notes that for foreign investors, the dividend withholding tax can be reduced to 15% under the U.S. treaty.
Future Outlook – The article concludes with a cautious but optimistic outlook: with continued growth in e‑commerce, the demand for last‑mile delivery hubs will keep fueling rental increases. Additionally, the company’s strategic focus on green buildings and sustainability could unlock value through rising demand for energy‑efficient properties.
Final Thoughts
The Motley Fool’s “3 Reasons to Buy Realty Income Stock” article consolidates why the REIT stands out in a crowded dividend‑stock landscape. By focusing on a robust dividend track record, a diversified, credit‑worthy tenant mix, and a business model that’s inherently resilient to economic swings, Realty Income proves to be a compelling choice for investors looking for stable, growing income streams.
For the average investor, the take‑away is simple: Realty Income offers a steady source of dividends with a solid growth trajectory, underpinned by a diversified tenant base and a low‑leverage balance sheet. Whether you’re a retiree who relies on dividend income or a young professional using a DRIP to build wealth, Realty Income’s “no‑end” dividend philosophy may be the addition that keeps your portfolio humming for years to come.
Read the Full The Motley Fool Article at:
[ https://www.fool.com/investing/2025/11/16/3-reasons-to-buy-realty-income-stock-like-theres-n/ ]
