Realty Income Stock Tumbles as Dividend Giant Hits Rough Patch
Realty Income (NYSE: O ) stock has been in a freefall, mirroring the performance of other top companies in the real estate investment trust (REIT) industry. It ended the week at $55, down sharply from the year-to-date high of $66.53. Notably, it has slumped in the last five consecutive weeks, its worst losing streak in years. Realty Income Stock is Falling as Risks Rise Realty Income is one of the most popular dividend companies in the world. It is a dividend aristocrat that has hiked its payouts in the last 31 years. The company uses a relatively simple business model, where it acquires commercial properties, often in the retail and industrial sector. It then leases the buildings to tenants on a long-term basis and then collects rent from its customers. It uses the triple net lease approach, where its tenants pay most of the costs, including taxes and maintenance. Realty Income boasts an occupancy rate of over 96%. Read Also: SCHD ETF Loses Momentum as Key Indicators Point to More Downside The stock has plunged because of the rising Treasury yields. The ten-year yield jumped to 5.12%, its highest level in nearly 20 years. Notably, short-term Treasury Bills have seen their yields j
Realty Income (NYSE: O ) stock has been in a freefall, mirroring the performance of other top companies in the real estate investment trust (REIT) industry. 53. Notably, it has slumped in the last five consecutive weeks, its worst losing streak in years. Realty Income Stock is Falling as Risks Rise Realty Income is one of the most popular dividend companies in the world.
It is a dividend aristocrat that has hiked its payouts in the last 31 years. The company uses a relatively simple business model, where it acquires commercial properties, often in the retail and industrial sector. It then leases the buildings to tenants on a long-term basis and then collects rent from its customers. It uses the triple net lease approach, where its tenants pay most of the costs, including taxes and maintenance.
Realty Income boasts an occupancy rate of over 96%. Read Also: SCHD ETF Loses Momentum as Key Indicators Point to More Downside The stock has plunged because of the rising Treasury yields. 12%, its highest level in nearly 20 years. 1%.
8%. Realty Income’s business is also being affected by the rising yields because of its huge debt load. Its interest expense has jumped from $283 million in the second quarter of last year to $312 million in the last quarter. This growth will continue in the future, especially if interest rates remain this elevated.
These risks explain why analysts have started to change their outlooks for the stock. Scotiabank recently downgraded the stock from sector outperform to sector perform, with its price target moving from $67 to $58. Analysts at Evercore, Mizuho, and Barclays have also reduced their targets. O Stock Formed a Double-Top Pattern Realty Income stock chart | Source: TradingView The weekly chart shows that Realty Income shares have also formed a risky chart pattern.
29, its lowest level in March this year. 2% Fibonacci Retracement level and the double-top’s neckline. It has also plunged below the 50-week moving average and the Supertrend indicators. 7% from the current level.
8% retracement level of $49. Read Also: Oracle Stock Pressured as "Project Jupiter" Woes Mount Image: Shutterstock