Realty Income Corporation (O) holds a strong A- credit rating from S&P, positioning it three levels above the BBB- investment-grade boundary. This robust rating underpins the company’s attractive 5.3% dividend yield, signaling financial stability and appeal for income-focused investors.
Healthy Payout Ratio Ensures Dividend Security
The company’s adjusted funds from operations (AFFO) payout ratio for the third quarter of 2025 stands at 75%. This leaves a solid 10-point margin before approaching the 85% threshold, which could signal potential risks to dividend sustainability. Such a buffer highlights Realty Income’s capacity to maintain and potentially grow its payouts amid varying economic conditions.
Strong Portfolio Performance Drives Stability
Realty Income’s portfolio boasts an impressive 98.7% occupancy rate, reflecting high demand from tenants. Recent rent renewals have increased by 3.5%, underscoring resilient leasing activity and steady cash flow generation. These metrics demonstrate the company’s ability to navigate market challenges while preserving revenue streams.
Conservative Leverage Supports Long-Term Viability
With a leverage ratio of 5.4 times debt to EBITDA, Realty Income operates well below the 6.5 times level that might pressure its credit rating or dividend reliability. This prudent balance sheet management reinforces the company’s investment-grade status and provides flexibility for future growth initiatives.
