REALTY INCOME CORP (O) Stock Fundamental Analysis
USA - NYSE:O - US7561091049 - REIT
59.29 USD
-0.17 (-0.29%)
59.14 USD
-0.15 (-0.25%)
Overall O gets a fundamental rating of 4 out of 10. We evaluated O against 129 industry peers in the Diversified REITs industry. While O is still in line with the averages on profitability rating, there are concerns on its financial health. O is quite expensive at the moment. It does show a decent growth rate.
1. Profitability
1.1 Basic Checks
In the past year O was profitable.
O had a positive operating cash flow in the past year.
Each year in the past 5 years O has been profitable.
Each year in the past 5 years O had a positive operating cash flow.
1.2 Ratios
With a Return On Assets value of 1.27%, O perfoms like the industry average, outperforming 55.04% of the companies in the same industry.
With a Return On Equity value of 2.32%, O perfoms like the industry average, outperforming 53.49% of the companies in the same industry.
Looking at the Return On Invested Capital, with a value of 2.71%, O is in line with its industry, outperforming 49.61% of the companies in the same industry.
Measured over the past 3 years, the Average Return On Invested Capital for O is in line with the industry average of 3.01%.
The last Return On Invested Capital (2.71%) for O is above the 3 year average (2.52%), which is a sign of increasing profitability.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 1.27% | ||
| ROE | 2.32% | ||
| ROIC | 2.71% |
ROA(3y)1.5%
ROA(5y)1.45%
ROE(3y)2.62%
ROE(5y)2.58%
ROIC(3y)2.52%
ROIC(5y)2.5%
1.3 Margins
O's Profit Margin of 16.63% is fine compared to the rest of the industry. O outperforms 67.44% of its industry peers.
In the last couple of years the Profit Margin of O has declined.
The Operating Margin of O (44.08%) is better than 89.15% of its industry peers.
In the last couple of years the Operating Margin of O has declined.
O's Gross Margin of 92.63% is amongst the best of the industry. O outperforms 96.12% of its industry peers.
In the last couple of years the Gross Margin of O has remained more or less at the same level.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 44.08% | ||
| PM (TTM) | 16.63% | ||
| GM | 92.63% |
OM growth 3Y-1.7%
OM growth 5Y-2.42%
PM growth 3Y-2.35%
PM growth 5Y-11.32%
GM growth 3Y-0.27%
GM growth 5Y-0.26%
2. Health
2.1 Basic Checks
O has a Return on Invested Capital (ROIC), which is below the Cost of Capital (WACC), which means it is destroying value.
O has more shares outstanding than it did 1 year ago.
The number of shares outstanding for O has been increased compared to 5 years ago.
O has a worse debt/assets ratio than last year.
2.2 Solvency
Based on the Altman-Z score of 1.02, we must say that O is in the distress zone and has some risk of bankruptcy.
With a decent Altman-Z score value of 1.02, O is doing good in the industry, outperforming 74.42% of the companies in the same industry.
O has a Debt/Equity ratio of 0.72. This is a neutral value indicating O is somewhat dependend on debt financing.
The Debt to Equity ratio of O (0.72) is better than 77.52% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.72 | ||
| Debt/FCF | N/A | ||
| Altman-Z | 1.02 |
ROIC/WACC0.39
WACC7.01%
2.3 Liquidity
A Current Ratio of 1.47 indicates that O should not have too much problems paying its short term obligations.
The Current ratio of O (1.47) is better than 62.79% of its industry peers.
A Quick Ratio of 1.47 indicates that O should not have too much problems paying its short term obligations.
Looking at the Quick ratio, with a value of 1.47, O is in the better half of the industry, outperforming 63.57% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.47 | ||
| Quick Ratio | 1.47 |
3. Growth
3.1 Past
The earnings per share for O have decreased by -4.63% in the last year.
Measured over the past years, O shows a decrease in Earnings Per Share. The EPS has been decreasing by -6.62% on average per year.
The Revenue has grown by 15.84% in the past year. This is quite good.
Measured over the past years, O shows a very strong growth in Revenue. The Revenue has been growing by 28.78% on average per year.
EPS 1Y (TTM)-4.63%
EPS 3Y1.4%
EPS 5Y-6.62%
EPS Q2Q%-24.14%
Revenue 1Y (TTM)15.84%
Revenue growth 3Y36.33%
Revenue growth 5Y28.78%
Sales Q2Q%5.3%
3.2 Future
The Earnings Per Share is expected to grow by 13.63% on average over the next years. This is quite good.
Based on estimates for the next years, O will show a small growth in Revenue. The Revenue will grow by 6.48% on average per year.
EPS Next Y41.09%
EPS Next 2Y25.9%
EPS Next 3Y19.45%
EPS Next 5Y13.63%
Revenue Next Year7.76%
Revenue Next 2Y6.2%
Revenue Next 3Y5.53%
Revenue Next 5Y6.48%
3.3 Evolution
The EPS growth rate is accelerating: in the next years the growth will be better than in the last years.
When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is decreasing.
4. Valuation
4.1 Price/Earnings Ratio
The Price/Earnings ratio is 57.56, which means the current valuation is very expensive for O.
The rest of the industry has a similar Price/Earnings ratio as O.
O's Price/Earnings ratio indicates a rather expensive valuation when compared to the S&P500 average which is at 27.29.
With a Price/Forward Earnings ratio of 38.17, O can be considered very expensive at the moment.
Compared to the rest of the industry, the Price/Forward Earnings ratio of O indicates a somewhat cheap valuation: O is cheaper than 66.67% of the companies listed in the same industry.
Compared to an average S&P500 Price/Forward Earnings ratio of 22.85, O is valued quite expensively.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 57.56 | ||
| Fwd PE | 38.17 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, O is valued a bit more expensive than the industry average as 68.22% of the companies are valued more cheaply.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | N/A | ||
| EV/EBITDA | 16.78 |
4.3 Compensation for Growth
The PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a correct valuation of the company.
The decent profitability rating of O may justify a higher PE ratio.
O's earnings are expected to grow with 19.45% in the coming years. This may justify a more expensive valuation.
PEG (NY)1.4
PEG (5Y)N/A
EPS Next 2Y25.9%
EPS Next 3Y19.45%
5. Dividend
5.1 Amount
O has a Yearly Dividend Yield of 5.51%, which is a nice return.
Compared to an average industry Dividend Yield of 6.99, O has a dividend in line with its industry peers.
Compared to an average S&P500 Dividend Yield of 2.38, O pays a better dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 5.51% |
5.2 History
The dividend of O has a limited annual growth rate of 4.20%.
O has been paying a dividend for at least 10 years, so it has a reliable track record.
Dividend Growth(5Y)4.2%
Div Incr Years0
Div Non Decr Years0
5.3 Sustainability
310.62% of the earnings are spent on dividend by O. This is not a sustainable payout ratio.
O's earnings are growing more than its dividend. This makes the dividend growth sustainable.
DP310.62%
EPS Next 2Y25.9%
EPS Next 3Y19.45%
59.29
-0.17 (-0.29%)
Chartmill FA Rating
GICS SectorReal Estate
GICS IndustryGroupEquity Real Estate Investment Trusts (REITs)
GICS IndustryDiversified REITs
Earnings (Last)
Earnings (Next)
Inst Owners80.2%
Inst Owner Change0.01%
Ins Owners0.1%
Ins Owner Change0.38%
Market Cap54.21B
Analysts69.66
Price Target63.37 (6.88%)
Short Float %4.25%
Short Ratio7.35
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 5.51% |
Yearly Dividend3.28
Dividend Growth(5Y)4.2%
DP310.62%
Div Incr Years0
Div Non Decr Years0
Ex-Date
Surprises & Revisions
EPS beat(2)0
Avg EPS beat(2)-31.12%
Min EPS beat(2)-38.76%
Max EPS beat(2)-23.48%
EPS beat(4)0
Avg EPS beat(4)-30.57%
Min EPS beat(4)-41.01%
Max EPS beat(4)-19.05%
EPS beat(8)1
Avg EPS beat(8)-26.29%
EPS beat(12)3
Avg EPS beat(12)-17.27%
EPS beat(16)3
Avg EPS beat(16)-21.62%
Revenue beat(2)2
Avg Revenue beat(2)3.1%
Min Revenue beat(2)2.87%
Max Revenue beat(2)3.33%
Revenue beat(4)4
Avg Revenue beat(4)2.35%
Min Revenue beat(4)1.46%
Max Revenue beat(4)3.33%
Revenue beat(8)8
Avg Revenue beat(8)2.83%
Revenue beat(12)11
Avg Revenue beat(12)2.71%
Revenue beat(16)14
Avg Revenue beat(16)2.67%
PT rev (1m)0.4%
PT rev (3m)1.89%
EPS NQ rev (1m)0%
EPS NQ rev (3m)20.64%
EPS NY rev (1m)-0.73%
EPS NY rev (3m)-4.34%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)1.3%
Revenue NY rev (1m)0.09%
Revenue NY rev (3m)1.48%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 57.56 | ||
| Fwd PE | 38.17 | ||
| P/S | 9.92 | ||
| P/FCF | N/A | ||
| P/OCF | 14.8 | ||
| P/B | 1.38 | ||
| P/tB | 1.92 | ||
| EV/EBITDA | 16.78 |
EPS(TTM)1.03
EY1.74%
EPS(NY)1.55
Fwd EY2.62%
FCF(TTM)-1.14
FCFYN/A
OCF(TTM)4
OCFY6.75%
SpS5.97
BVpS42.82
TBVpS30.83
PEG (NY)1.4
PEG (5Y)N/A
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 1.27% | ||
| ROE | 2.32% | ||
| ROCE | 3.43% | ||
| ROIC | 2.71% | ||
| ROICexc | 2.74% | ||
| ROICexgc | 3.54% | ||
| OM | 44.08% | ||
| PM (TTM) | 16.63% | ||
| GM | 92.63% | ||
| FCFM | N/A |
ROA(3y)1.5%
ROA(5y)1.45%
ROE(3y)2.62%
ROE(5y)2.58%
ROIC(3y)2.52%
ROIC(5y)2.5%
ROICexc(3y)2.53%
ROICexc(5y)2.53%
ROICexgc(3y)3.06%
ROICexgc(5y)3.02%
ROCE(3y)3.19%
ROCE(5y)3.16%
ROICexcg growth 3Y13.03%
ROICexcg growth 5Y-1.09%
ROICexc growth 3Y15.09%
ROICexc growth 5Y-3.03%
OM growth 3Y-1.7%
OM growth 5Y-2.42%
PM growth 3Y-2.35%
PM growth 5Y-11.32%
GM growth 3Y-0.27%
GM growth 5Y-0.26%
F-Score6
Asset Turnover0.08
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.72 | ||
| Debt/FCF | N/A | ||
| Debt/EBITDA | 5.82 | ||
| Cap/Depr | 190.73% | ||
| Cap/Sales | 86.1% | ||
| Interest Coverage | 2.35 | ||
| Cash Conversion | 75.13% | ||
| Profit Quality | N/A | ||
| Current Ratio | 1.47 | ||
| Quick Ratio | 1.47 | ||
| Altman-Z | 1.02 |
F-Score6
WACC7.01%
ROIC/WACC0.39
Cap/Depr(3y)369.18%
Cap/Depr(5y)430.26%
Cap/Sales(3y)177.32%
Cap/Sales(5y)195.09%
Profit Quality(3y)N/A
Profit Quality(5y)N/A
High Growth Momentum
Growth
EPS 1Y (TTM)-4.63%
EPS 3Y1.4%
EPS 5Y-6.62%
EPS Q2Q%-24.14%
EPS Next Y41.09%
EPS Next 2Y25.9%
EPS Next 3Y19.45%
EPS Next 5Y13.63%
Revenue 1Y (TTM)15.84%
Revenue growth 3Y36.33%
Revenue growth 5Y28.78%
Sales Q2Q%5.3%
Revenue Next Year7.76%
Revenue Next 2Y6.2%
Revenue Next 3Y5.53%
Revenue Next 5Y6.48%
EBIT growth 1Y14.86%
EBIT growth 3Y34%
EBIT growth 5Y25.67%
EBIT Next Year114.2%
EBIT Next 3Y34.44%
EBIT Next 5Y21.07%
FCF growth 1Y86.53%
FCF growth 3YN/A
FCF growth 5YN/A
OCF growth 1Y32.03%
OCF growth 3Y39.29%
OCF growth 5Y27.3%