If everyone was investing based on MF, everyone would be a bankrupt.
> For starters, most companies with dividends pay quarterly, while Realty Income pays monthly. <
Yes, the author made other points. But that seems like a pretty thin reason to buy a stock.
Anyway, thanks for posting. I’ll be watching this thread for other opinions. Like you, I have some money that need to be deployed. I dunno. Right now I’m leaning towards a money market fund until things settle down. But that’s probably the wrong thing to do.
My first thought is that this may no longer be true (easy to release or sell) with the culture changing to work-from-home or hybrid. I know my company is aging off the leases on about 1/3 of our office space and it not replacing any time soon. Is retail going to be any better? It almost sounds like Target and Kohls are going the way of Kmart and Sears.
Still, some numbers will help. Realty Income estimates that if you had purchased the stock on the last day of 2011, your yield would have been around 5%. Thanks to regular dividend hikes, however, your yield on a purchase at the end of March 2022 would have been 8.5%. That’s the power of slow and steady dividend increases.
Not saying this is a bad investment and should/should not be a part of investment but note the above is “cherry picked”.
I’ve bought REITs in the past. You do get good income, but the value of the security dwindles over time, offsetting the income. And you pay tax on the income. Most of these were a net loss, all things considered.
This thread comes dangerously close to shilling for a product. I’ll let the moderators decide.
This is literal rent seeking.
You may get some good dividends for a while, but the real estate market is about to fall through the floor, and if you care about morality in your investments, this is a moral loser. A big part of the reason why things are so distorted in the real estate industry is because of institutional investment in the rental markets. Big companies buy up houses in all cash purchases that individual families otherwise would buy (but can’t compete for prices against a cash rich cpmpany), then rent them out to the same families, skimming profits while the families don’t build up equity or develop a sense of ownership within the community. The hedge funds make out like bandits, but they’re sucking entire regions of the country dry.
Isn’t there a heavy tax penalty with this type of investment? I think it’s taxed at your income rate and not capital gains rates. But I’m no expert...
Thanks for posting American, you are one of the reasons that FreeRepublic is great.
Making thinkers of us all.
My first thought as I was reading this, is what happens when the real estate bubble bursts, and when major communities revisit rent control? We’re going into a recession, what happens to real estate then?
A favorite realty mutual fund of mine is down 19% since April. I’ve been out of it since Brandon got into the WH. I’ll let it go down further before I jump back in.
This assumes retail shopping at physical stores continues, right?
This article reminds me of the old joke:
Q. Do you know how to become a millionaire farmer?
A. Invest two million dollars in a farm.
;-)
Quick! Invest in this company so you too can help end private home ownership, Yay!
If their stock price was in $25 to $35 range, I might buy.
However, its $60+ so I’m passing.
Also PE at 65+ is a little high for my taste.
As noted their dividend is good.
They do have solid institutional investors:
Vanguard
Blackrock
State Street
Cohen & Steers
Bank of America
I just don’t see these guys squeezing out much more on this stock.
The graph conveniently starts are year 2000. In October 2019, the stock had a high of $79.25. Then it dropped to $48.31 in March 2020, and is slowly recovering. It is now at 64.87 per share. The PE Ratio is a staggering 65.86.
REITs + Recession = I’m old enough to have seen how that story ends. And young enough to remember.
And that was without the impact of Work from Home/Hybrid.
Bump
Ping for later.
No thanks.
Bank your funds into cash until the market recovers.
No sense in flushing it away.
This won’t be over for another 2.5+ years.