Real estate income overview: company grows faster S&P 500 и Nasdaq

Обзор Realty Income: компания растет быстрее S&P 500 и Nasdaq

Realty Income (NYSE: O) is a real estate investment fund (REIT), founded in 1969 and operating in the US and Europe. The company owns more than 7 thousand real estate objects as of the end of September 2021, out of which 98,8% buildings are leased.

About company

Основная деятельность Realty Income — это покупка и сдача в аренду собственных торговых, industrial, office and agricultural properties. Активы фонд приобретает за счет заработанной прибыли, выпуска новых обыкновенных или привилегированных акций и большого количества долговых бумаг. Annual rates for them vary greatly, ranging from 0,75 to 5,875% depending on maturity, наличия или отсутствия обеспечения и многих других параметров.

Sectoral asset diversification Realty Income:

  1. Retail - 83,7%.
  2. Industry - 12,2%.
  3. Offices - 2,6%.
  4. Сельское хозяйство — 1,5%.

Ключевой рынок для Realty Income — это США, which account for more 90% income. Except North America, The fund has been operating since 2019 in the UK and from the third quarter of 2021 in Spain. In the first country, the company owns more than 100 properties, а второй — всего семь.

Realty Income management sees the EU market as very promising due to its larger size and fewer competitors. European REITs take less than 1% from its common market, в то время как в США этот показатель равен 4%.

Total market size:

  1. The US real estate market is $4 trillion.
  2. EU real estate market - 8 trillion dollars.

Самые прибыльные штаты США Realty Income на конец 2020 года:

  1. Техас — 10,5%.
  2. Калифорния — 8,8%.
  3. Иллинойс — 5,8%.
  4. Флорида — 5,3%.
  5. Нью-Йорк — 4,2%.

Great Britain as a region brings 6,2% from the company's revenue.

Обзор Realty Income: компания растет быстрее S&P 500 и Nasdaq

Profit distribution

Основная цель Realty Income — это выплата надежных растущих дивидендов. The company distributes to its shareholders at least 90% from taxable income, за исключением дохода от прироста капитала. Payment frequency - 12 once a year. Monthly dividends are distributed through a large and stable cash flow, which receives REIT through long-term lease agreements for its own properties.

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For the past two years, the management of Realty Income has adhered to the following dividend principle: growth in monthly payments occurred every quarter, after three identical distributions followed by an increase. The company's last announced dividend in 2021 was 0,2465 $, if we conservatively assume, that in 2022 management will leave their payments unchanged, then the annual dividend will be 12 × 0,2465 $ = 2,958 $, which corresponds to the dividend yield 4,1%.

Annual dynamics of dividend payments

2011 1,738 $
2012 1,778 $
2013 2,178 $
2014 2,193 $
2015 2,279 $
2016 2,403 $
2017 2,537 $
2018 2,639 $
2019 2,717 $
2020 2,801 $
2021 2,845 $

1,738 $

Current results and forecasts

Realty Income is well known to investors for more than just its high dividend payouts., but double digit growth: since 2016, the financial performance of REITs has grown by an average of 10,63%.

Even in a difficult 2020, the company managed to increase its own results thanks to a low negative effect, который COVID-19 оказал на основных арендаторов фонда — ретейлеров. Почти все их магазины работали, и на товары был повышенный спрос, из-за чего проблем с платежами за аренду не было.

По итогам третьего квартала 2021 года менеджмент Realty Income актуализировал свой прогноз финансовых результатов на 2021 год и раскрыл некоторые расчетные данные 2022 года, основной прогноз на следующий год компания своим акционерам опубликует по итогам четвертого квартала 2021 года.

Прогноз Realty Income на 2021—2022 годы

Прошлый прогноз на 2021 year Новый прогноз на 2021 year Forecast of 2022 year
Net income per share 1,32—1,41 $ 1,39—1,44 $
Амортизация и обесценение недвижимости на акцию 2,11 $ 2,06 $
Прибыль от продажи недвижимости на акцию −0,09 $ −0,10 $
Дополнительные расходы на акцию 0,03 $ 0,08 $
FFO на акцию 3,37—3,46 $ 3,43—3,48 $
AFFO на акцию 3,53—3,59 $ 3,55—3,60 $ 3,84—3,97 $
Real estate percentage, которая находится в аренде 98% 98%
Денежные расходы на общие и административные нужды, в процентах от выручки 4,5% 4—4,5% 3,5—4%
property expenses, в процентах от выручки 1,5—1,8% 1,5—1,8%
Расходы по подоходному налогу 25 million dollars 30 million dollars
Volume of new acquisitions 4,5 billion dollars 5 billion dollars 5 billion dollars
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Comparison with competitors

EV / EBITDA P / E net debt / EBITDA
Realty Income 23,31 61,30 5,40
Simon Property Group 21,58 26,14 6,97
Kimco Realty Corporation 31,21 16,16 9,85
Digital Realty Trust 29,18 75,23 6,27
Alexandria Real Estate Equities 30,25 37,49 6,19
AvalonBay Communities 24,51 35,01 4,27

Financial results of the company at the end of the period, billion dollars

Revenue EBITDA Net profit net debt
2016 1,103 1,027 0,288 5,840
2017 1,216 1,115 0,301 6,111
2018 1,328 1,237 0,363 6,489
2019 1,492 1,424 0,436 7,847
2020 1,652 1,497 0,395 7,992
9м2021 1,399 1,242 0,355 8,732

Arguments for

Growth better than the market. Realty Income promotions for the last 26 лет смогли показать более впечатляющую динамику в сравнении с основными американскими индексами, overtaking S&P 500 and Nasdaq в два-три раза.

Если бы обычный инвестор в 1994 году вложил по 100 $ into the REIT in question and into the main market benchmarks, then by the end of 2020 its current share was estimated:

  • в Realty Income — 3331 $;
  • в Nasdaq — 1711 $;
  • в Dow Jones — 1454 $;
  • в S&P 500 — 1350 $;
  • в Equity REIT Index — 1261 $.

The total average annual return of Realty Income and market benchmarks from 1994 to 2020

Realty Income 15,3%
Nasdaq 11,4%
Dow Jones 10,7%
S&P 500 10,4%
Equity REIT Index 10,1%


Profit distribution. Realty Income is included in 65 America's Dividend Aristocrats. Dividend aristocrats include businesses, who have more 25 years in a row, annual dividend payments to shareholders have grown. The current result of Realty Income is — 27 years. С 1995 по 2021 год годовое распределение компании увеличилось с 0,6425 $ до текущего значения 2,845 $, it means, что дивиденды в среднем ежегодно росли на 5,89%.

Sustainability. A large diversification of clients allows the management of Realty Income to approve, that REITs are resilient to economic downturns and successfully counter the impact of the e-commerce sector. Currently, more than 650 companies from 60 отраслей, the largest share of all kinds of retailers more 80%.

10 крупнейших клиентов Realty Income, доля в общих результатах

7-Eleven 5,7%
Walgreens 5,0%
Dollar General 4,2%
FedEx 3,4%
Dollar Tree / Family Dollar 3,3%
Sainsbury’s 3,2%
L.A. Fitness 2,8%
AMC Theaters 2,5%
Regal Cinemas 2,4%
Wal-Mart / Sam’s Club 2,3%
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Defensive asset. REIT is a safe asset for those investors, who want to protect their savings during periods of high inflation, because its growth usually leads to a gradual increase in the value of real estate and rent, which means, to the growth of financial results and dividends of these real estate investment funds.

Tax incentives. REIT has long been called a tax haven, because these funds are exempt in the United States from federal taxes. Under President Trump, their conditional status has been somewhat shaken by tax cuts from 35 to 21%, но при Байдене все должно вернуться на круги своя: the current leader of the United States decided to raise taxes.

Arguments against

Growth rates. In mid-December 2021, chapters FED Said, that they plan to raise rates three times in 2022 due to record inflation in the US. Rising inflation will have a negative impact on companies with a lot of debt, это приведет к увеличению процентных платежей по кредитам и займам. На текущий момент чистый долг Realty Income составляет 8,732 млрд долларов, а мультипликатор «чистый долг / EBITDA» находится на уровне 5,4.

Increase the authorized capital. In the fourth quarter of 2021, the company will issue new shares on the occasion of the merger: Realty Income buys VEREIT for $11bn. Under the terms of the deal, VEREIT shareholders will receive 0.705 Realty Income shares for each of their shares.. Wherein, if we consider the merger itself, it is more positive. Оно укрепит положение объединенной компании в отрасли: портфель объектов недвижимости по итогу вырастет с 7 тысяч зданий до более чем 10 тысяч.

What's the bottom line?

Realty Income — это крупный инвестиционный фонд недвижимости, which should appeal to long-term investors. Компания растет быстрее рынка и выплачивает своим акционерам ежегодно дивидендную доходность 4%. The prospective valuation for purchases is EV / EBITDA 20 and below. At such levels, Realty Income descended into 2016, 2017, 2018, 2020 and early 2021. The current price target for this valuation is 59 $ and below.

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