REALTY INCOME CORP (O) Stock Fundamental Analysis
NYSE:O - US7561091049 - REIT
58.13 USD
-0.08 (-0.14%)
58.28 USD
+0.15 (+0.26%)
We assign a fundamental rating of 4 out of 10 to O. O was compared to 129 industry peers in the Diversified REITs industry. O has a medium profitability rating, but doesn't score so well on its financial health evaluation. O is quite expensive at the moment. It does show a decent growth rate.
1. Profitability
1.1 Basic Checks
O had positive earnings in the past year.
In the past year O had a positive cash flow from operations.
In the past 5 years O has always been profitable.
In the past 5 years O always reported a positive cash flow from operatings.
1.2 Ratios
O has a Return On Assets of 1.27%. This is comparable to the rest of the industry: O outperforms 55.04% of its industry peers.
The Return On Equity of O (2.32%) is comparable to the rest of the industry.
O's Return On Invested Capital of 2.71% is in line compared to the rest of the industry. O outperforms 49.61% of its industry peers.
The Average Return On Invested Capital over the past 3 years for O is in line with the industry average of 3.06%.
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 has a better Profit Margin (16.63%) than 67.44% of its industry peers.
O's Profit Margin has declined in the last couple of years.
O has a Operating Margin of 44.08%. This is amongst the best in the industry. O outperforms 89.15% of its industry peers.
O's Operating Margin has declined in the last couple of years.
O has a Gross Margin of 92.63%. This is amongst the best in the industry. O outperforms 96.12% of its industry peers.
O's Gross Margin has been stable in the last couple of years.
| 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
The Return on Invested Capital (ROIC) is below the Cost of Capital (WACC), so O is destroying value.
The number of shares outstanding for O has been increased compared to 1 year ago.
O has more shares outstanding than it did 5 years ago.
O has a worse debt/assets ratio than last year.
2.2 Solvency
Based on the Altman-Z score of 1.00, we must say that O is in the distress zone and has some risk of bankruptcy.
The Altman-Z score of O (1.00) is better than 73.64% of its industry peers.
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 78.29% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.72 | ||
| Debt/FCF | N/A | ||
| Altman-Z | 1 |
ROIC/WACC0.38
WACC7.14%
2.3 Liquidity
A Current Ratio of 1.47 indicates that O should not have too much problems paying its short term obligations.
O has a Current ratio of 1.47. This is in the better half of the industry: O outperforms 62.02% of its industry peers.
A Quick Ratio of 1.47 indicates that O should not have too much problems paying its short term obligations.
With a decent Quick ratio value of 1.47, O is doing good in the industry, outperforming 62.79% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.47 | ||
| Quick Ratio | 1.47 |
3. Growth
3.1 Past
O shows a slight negative growth in Earnings Per Share. In the last year, the EPS has decreased by -4.63%.
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.
Looking at the last year, O shows a quite strong growth in Revenue. The Revenue has grown by 15.84% in the last year.
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 16.14% 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 3.99% on average per year.
EPS Next Y42.13%
EPS Next 2Y27.3%
EPS Next 3Y20.44%
EPS Next 5Y16.14%
Revenue Next Year7.26%
Revenue Next 2Y6.1%
Revenue Next 3Y5.39%
Revenue Next 5Y3.99%
3.3 Evolution
When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.
The Revenue growth rate is decreasing: in the next years the growth will be less than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
Based on the Price/Earnings ratio of 56.44, the valuation of O can be described as expensive.
Compared to the rest of the industry, the Price/Earnings ratio of O is on the same level as its industry peers.
O is valuated expensively when we compare the Price/Earnings ratio to 27.08, which is the current average of the S&P500 Index.
The Price/Forward Earnings ratio is 36.60, which means the current valuation is very expensive for O.
O's Price/Forward Earnings ratio is a bit cheaper when compared to the industry. O is cheaper than 67.44% of the companies in the same industry.
O is valuated expensively when we compare the Price/Forward Earnings ratio to 22.67, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 56.44 | ||
| Fwd PE | 36.6 |
4.2 Price Multiples
68.99% of the companies in the same industry are cheaper than O, based on the Enterprise Value to EBITDA ratio.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | N/A | ||
| EV/EBITDA | 16.56 |
4.3 Compensation for Growth
The PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a correct valuation of the company.
O has a very decent profitability rating, which may justify a higher PE ratio.
O's earnings are expected to grow with 20.44% in the coming years. This may justify a more expensive valuation.
PEG (NY)1.34
PEG (5Y)N/A
EPS Next 2Y27.3%
EPS Next 3Y20.44%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 5.42%, O is a good candidate for dividend investing.
O's Dividend Yield is comparable with the industry average which is at 6.31.
O's Dividend Yield is rather good when compared to the S&P500 average which is at 2.34.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 5.42% |
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
O pays out 310.62% of its income as dividend. 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 2Y27.3%
EPS Next 3Y20.44%
58.13
-0.08 (-0.14%)
Chartmill FA Rating
GICS SectorReal Estate
GICS IndustryGroupEquity Real Estate Investment Trusts (REITs)
GICS IndustryDiversified REITs
Earnings (Last)
Earnings (Next)
Inst Owners79.19%
Inst Owner Change1.21%
Ins Owners0.1%
Ins Owner Change-1.78%
Market Cap53.15B
Analysts69.29
Price Target62.7 (7.86%)
Short Float %3.78%
Short Ratio6.44
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 5.42% |
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)0.72%
PT rev (3m)1%
EPS NQ rev (1m)1.9%
EPS NQ rev (3m)-2.5%
EPS NY rev (1m)-2.32%
EPS NY rev (3m)-5.82%
Revenue NQ rev (1m)0.72%
Revenue NQ rev (3m)0.22%
Revenue NY rev (1m)1.1%
Revenue NY rev (3m)1.25%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 56.44 | ||
| Fwd PE | 36.6 | ||
| P/S | 9.73 | ||
| P/FCF | N/A | ||
| P/OCF | 14.52 | ||
| P/B | 1.36 | ||
| P/tB | 1.89 | ||
| EV/EBITDA | 16.56 |
EPS(TTM)1.03
EY1.77%
EPS(NY)1.59
Fwd EY2.73%
FCF(TTM)-1.14
FCFYN/A
OCF(TTM)4
OCFY6.89%
SpS5.97
BVpS42.82
TBVpS30.83
PEG (NY)1.34
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 |
F-Score6
WACC7.14%
ROIC/WACC0.38
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 Y42.13%
EPS Next 2Y27.3%
EPS Next 3Y20.44%
EPS Next 5Y16.14%
Revenue 1Y (TTM)15.84%
Revenue growth 3Y36.33%
Revenue growth 5Y28.78%
Sales Q2Q%5.3%
Revenue Next Year7.26%
Revenue Next 2Y6.1%
Revenue Next 3Y5.39%
Revenue Next 5Y3.99%
EBIT growth 1Y14.86%
EBIT growth 3Y34%
EBIT growth 5Y25.67%
EBIT Next Year112.34%
EBIT Next 3Y33.52%
EBIT Next 5Y21.23%
FCF growth 1Y86.53%
FCF growth 3YN/A
FCF growth 5YN/A
OCF growth 1Y32.03%
OCF growth 3Y39.29%
OCF growth 5Y27.3%