O
O
ACCUMULATE 2026-03-07
Model
DDM
Price at Report
$65.00
Base IV
$64.06
Bear IV
$54.82
Bull IV
$75.62
Entry Zone: 58-59 · Sell Above: 64
Bore Family Office
Valuation Report — Realty Income (O) • March 7, 2026
3-Stage DDM (Ke) • Discount Rate: 7.80% • Current Price: $65.00
Prepared by Lurch • Bore Family Office • Data: Finnhub, StockAnalysis.com, S&P Global Market Intelligence
🏢 Business Overview
Realty Income Corporation (NYSE: O) was founded in 1969 and went public in 1994 under the iconic brand "The Monthly Dividend Company." It is the largest publicly traded net-lease REIT by market cap (~$59B). As of Q4 2025, Realty Income owns approximately 15,500 properties across the United States, United Kingdom, Spain, France, Germany, Italy, Ireland, and Portugal — making it the first major U.S. net-lease REIT to build a significant European presence. The portfolio spans retail, industrial, gaming, and office properties, all leased under net leases (tenants pay taxes, insurance, maintenance). Average lease term is ~9.7 years remaining. Occupancy is consistently 98-99%. Investment-grade credit rating (Moody's Baa1, S&P BBB+). The Spirit Realty merger closed January 2024, adding 2,000+ properties, primarily in retail net-lease and driving ~30% share count dilution — AFFO/share growth has been muted as a result. Top tenants: Dollar General (3.9%), Walgreens (3.4%), Dollar Tree/Family Dollar (3.2%), 7-Eleven (2.8%), EG Group/Circle K (2.7%), Home Depot, Walmart, FedEx, and 250+ others.📊 Financial Snapshot
| Metric | FY2021 | FY2022 | FY2023 | FY2024 | FY2025 |
|---|---|---|---|---|---|
| Revenue ($M) | $2,080 | $3,344 | $4,079 | $5,271 | $5,749 |
| EBITDA ($M) | $1,643 | $2,939 | $3,516 | $4,194 | $2,098 |
| Operating Income ($M) | $746 | $1,269 | $1,621 | $1,799 | $2,098 |
| Net Income ($M) | $359 | $869 | $872 | $848 | $1,059 |
| EPS (diluted) | $0.87 | $1.42 | $1.26 | $0.98 | $1.17 |
| Free Cash Flow ($M) | — | — | — | $189 | — |
| Annual DPS | $2.845 | $2.969 | $3.059 | $3.133 | $3.219 |
| Total Debt ($M) | — | — | — | — | — |
| Rev YoY Growth | — | +60.8% | +22.0% | +29.2% | +9.1% |
📈 DDM Scenarios
$55
🔴 Bear
$64
📊 Base
$76
🚀 Bull
$65.00
Current Price
$65
Analyst Avg PT
📋 Full 10-Year Projection Tables
Bear Scenario
| Period | Stage | DPS / Dist. | PV of DPS | Cumulative IV |
|---|---|---|---|---|
| Year 1 | Stage 1 | $3.289 | $3.051 | $3.05 |
| Year 2 | Stage 1 | $3.338 | $2.872 | $5.92 |
| Year 3 | Stage 1 | $3.388 | $2.704 | $8.63 |
| Year 4 | Stage 1 | $3.439 | $2.546 | $11.17 |
| Year 5 | Stage 1 | $3.490 | $2.398 | $13.57 |
| Year 6 | Stage 2 | $3.543 | $2.258 | $15.83 |
| Year 7 | Stage 2 | $3.596 | $2.126 | $17.95 |
| Year 8 | Stage 2 | $3.650 | $2.001 | $19.96 |
| Year 9 | Stage 2 | $3.705 | $1.884 | $21.84 |
| Year 10 | Stage 2 | $3.760 | $1.774 | $23.61 |
| Terminal | — | TV=$66.13 | PV(TV)=$31.20 (57% of IV) |
Base Scenario
| Period | Stage | DPS / Dist. | PV of DPS | Cumulative IV |
|---|---|---|---|---|
| Year 1 | Stage 1 | $3.337 | $3.096 | $3.10 |
| Year 2 | Stage 1 | $3.437 | $2.958 | $6.05 |
| Year 3 | Stage 1 | $3.540 | $2.826 | $8.88 |
| Year 4 | Stage 1 | $3.647 | $2.700 | $11.58 |
| Year 5 | Stage 1 | $3.756 | $2.580 | $14.16 |
| Year 6 | Stage 2 | $3.850 | $2.453 | $16.61 |
| Year 7 | Stage 2 | $3.946 | $2.333 | $18.95 |
| Year 8 | Stage 2 | $4.045 | $2.218 | $21.16 |
| Year 9 | Stage 2 | $4.146 | $2.109 | $23.27 |
| Year 10 | Stage 2 | $4.250 | $2.005 | $25.28 |
| Terminal | — | TV=$82.19 | PV(TV)=$38.78 (61% of IV) |
Bull Scenario
| Period | Stage | DPS / Dist. | PV of DPS | Cumulative IV |
|---|---|---|---|---|
| Year 1 | Stage 1 | $3.386 | $3.141 | $3.14 |
| Year 2 | Stage 1 | $3.538 | $3.045 | $6.19 |
| Year 3 | Stage 1 | $3.697 | $2.951 | $9.14 |
| Year 4 | Stage 1 | $3.864 | $2.861 | $12.00 |
| Year 5 | Stage 1 | $4.038 | $2.774 | $14.77 |
| Year 6 | Stage 2 | $4.179 | $2.663 | $17.43 |
| Year 7 | Stage 2 | $4.325 | $2.557 | $19.99 |
| Year 8 | Stage 2 | $4.477 | $2.455 | $22.45 |
| Year 9 | Stage 2 | $4.633 | $2.357 | $24.80 |
| Year 10 | Stage 2 | $4.795 | $2.263 | $27.07 |
| Terminal | — | TV=$102.90 | PV(TV)=$48.56 (64% of IV) |
🔲 Sensitivity Table
| Ke \ gT | 1.5% | 2.0% | 2.5% | 3.0% | 3.5% |
|---|---|---|---|---|---|
| 5.8% | $85 | $93 | $103 | $117 | $137 |
| 6.3% | $76 | $82 | $89 | $99 | $112 |
| 6.8% | $69 | $73 | $79 | $86 | $96 |
| 7.3% | $63 | $66 | $71 | $76 | $83 |
| 7.8% | $58 | $61 | $64 | $68 | $74 |
| 8.3% | $53 | $56 | $59 | $62 | $66 |
| 8.8% | $50 | $52 | $54 | $57 | $60 |
| 9.3% | $46 | $48 | $50 | $52 | $55 |
| 9.8% | $43 | $45 | $46 | $48 | $50 |
Green = >10% above current price. Red = >10% below. Gold = within ±10%.
📉 Long-Term Price Trend Channel
Log-linear trend fitted to full price history. ±1.5σ bands. Green shaded zone = bottom 25% of historical range — historically attractive entry.
🏦 Comparable Valuation
| Ticker | Company | P/AFFO | Div Yield | Lease Type | Rating |
|---|---|---|---|---|---|
| O | Realty Income (current) | 15.2x | 4.98% | Net Lease | Baa1 |
| NNN | NNN REIT | 13.7x | 5.33% | Net Lease | Baa1 |
| VICI | VICI Properties | 12.8x | 5.8% | Net Lease | Baa3 |
| WPC | W.P. Carey | 11.5x | 6.0% | Net Lease | BBB |
| ADC | Agree Realty | 17.5x | 4.0% | Net Lease | BBB |
| O | 5-yr avg (own history) | 16.0x | 4.5% | — | — |
💰 Dividend / Distribution Analysis
| Metric | Value |
|---|---|
| Annual DPS | $3.240 |
| Current Yield | 4.98% |
| Consecutive Growth Years | 22 |
| 1-yr DPS CAGR | +2.7% |
| 3-yr DPS CAGR | +3.0% |
| 5-yr DPS CAGR | +3.1% |
| 10-yr DPS CAGR | +4.0% |
| Payout Ratio (DPS/EPS) | 276.9% ⚠️ |
| FCF Payout Ratio | 75.0% |
| Sustainability Verdict | Safe ✅ |
Realty Income — "The Monthly Dividend Company" — has raised its monthly dividend 22 years in a row and has never cut its dividend in its history as a public company since 1994. The GAAP payout ratio of 277% is meaningless for REITs (D&A inflates reported losses relative to cash earnings). AFFO payout of ~75% is healthy and well within sustainable range. The Spirit Realty merger (2024) expanded the portfolio to ~15,500 properties with minimal overlap. Tenant diversification is exceptional: top tenants include Dollar General, Walgreens, Dollar Tree, 7-Eleven, and hundreds of others — no single tenant >4% of rent. Dividend is Safe. ~3%/yr growth expected going forward in line with AFFO growth.
🔮 Analyst Forecast Section
(a) EPS Consensus
| Year | Low / Actual | Avg | High | # Analysts | Type |
|---|---|---|---|---|---|
| FY2023 | $1.26 | — | — | — | Actual |
| FY2024 | $0.98 | — | — | — | Actual |
| FY2025 | $1.17 | — | — | — | Actual |
| FY2026E | $1.49 | $1.67 | $1.90 | 10 | Estimate |
| FY2027E | $1.57 | $1.76 | $2.10 | 9 | Estimate |
(b) Revenue Consensus
| Year | Low / Actual | Avg | High | # Analysts | Type |
|---|---|---|---|---|---|
| FY2023 | $4.1B | — | — | — | Actual |
| FY2024 | $5.3B | — | — | — | Actual |
| FY2025 | $5.7B | — | — | — | Actual |
| FY2026E | $5.4B | $6.1B | $6.6B | 10 | Estimate |
| FY2027E | $5.5B | $6.5B | $7.2B | 9 | Estimate |
(c) Individual Analyst Price Targets
Consensus: Avg $64.83 | Range $60–$70
| Analyst | Firm | Rating | PT | Upside |
|---|---|---|---|---|
| Brad Heffern | RBC Capital | Buy | $70 | +7.7% |
| Jay Kornreich | Cantor Fitzgerald | Hold | $68 | +4.6% |
| Nicholas Yulico | Scotiabank | Buy | $67 | +3.1% |
| James Kammert | Evercore ISI | Hold | $65 | — |
| Ronald Kamdem | Morgan Stanley | Hold | $65 | — |
| Bear Analyst | Various | Sell | $60 | -7.7% |
(d) Earnings Surprise History
| Quarter | EPS Act vs Est | EPS Beat/Miss | Rev Act vs Est | Rev Beat/Miss | Guidance |
|---|---|---|---|---|---|
| Q2 FY2025 | $0.30 vs $0.29 | +$0.01 ✅ | $1.3B vs $1.3B | +$0.0B ✅ | Maintained |
| Q3 FY2025 | $0.31 vs $0.30 | +$0.01 ✅ | $1.3B vs $1.3B | +$0.0B ✅ | Raised |
| Q4 FY2025 | $0.30 vs $0.31 | $-0.01 ❌ | $1.4B vs $1.4B | +$0.0B ✅ | Maintained |
| Q1 FY2026 | $0.29 vs $0.29 | +$0.00 ✅ | $1.3B vs $1.3B | +$0.0B ✅ | Affirmed |
(e) Confidence Band Commentary
Analyst coverage is strong (12 analysts). The 2/10 Buy vs Hold split signals the market sees fair value near current price. Wide EPS range ($1.49–$1.90 for FY2026) reflects GAAP complexity from D&A and acquisition accounting — analysts are more aligned on AFFO ($4.40–$4.60 range). EPS surprises have been minimal (±$0.01) — net-lease cash flows are highly predictable. The key variable is acquisition volume and cap rate environment in 2026.
⚖️ DDM Verdict: ACCUMULATE — Realty Income (O)
Current price: $65.00 | Analyst Avg PT: $64.83
$55
🔴 Bear
$64
📊 Base
$76
🚀 Bull
| Tier | Price | Action |
|---|---|---|
| Tier 1 — Starter | ≤$59 | Begin position |
| Tier 2 — Add | ≤$59 | Add on weakness |
| Tier 3 — Full | ≤$58 | Full allocation |
| Sell Alert | ≥$64 | Above fair value — consider trimming |
📂 Current Position Summary
| Metric | Value |
|---|---|
| Shares Held | 3,820.3 |
| Average Cost Basis | $54.61 |
| Current Market Value | $248,320 |
| Unrealized P&L | $+39,693 (+19.0%) |
| Annual Dividend Income | $0/yr |
| Yield on Cost | 0.00% |
| vs Target Position (~$200K) | $248,320 vs $200,000 (124% of target) |
Bore Family Office • Analysis generated by Lurch • Not investment advice.