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Realty Income Corp. (NYSE:O), known as The Monthly Dividend Company, is a trusted real estate investment trust (REIT) and an S&P 500 Dividend Aristocrat.
It has a proven history of paying monthly dividends and increasing them annually.
If you had invested $10,000 in Realty Income at an adjusted stock price of $42.05 per share (which reflects a 1032:1000 stock split in November 2021), you would have purchased approximately 237.81 shares. At that time, the monthly dividend was $0.1825 per share, giving you an initial monthly income of approximately $43.40.
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Your investment will look different from November 2024 depending on whether you have reinvested your dividends.
If you had reinvested your dividends over the past ten years, your initial shares would have grown to 373.98 and your total return would be 100.87%. Your investment value would be $20,086.82.
With Realty Income’s current monthly dividend of $0.2635 per share, your monthly dividend income would now be about $98.54 – more than double what you started with a decade ago.
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If you received your dividends in cash instead of reinvesting them, your total return over the past 10 years would be 41.26%, but your number of shares would have remained constant at 237.81.
Based on the current monthly dividend of $0.2635 per share, your monthly dividend would be $62.66. While this is a significant increase from the original $43.40, it is significantly less than what you would have earned by reinvesting your dividends.
These examples illustrate the powerful combination of dividend reinvestment and compound interest. You can acquire additional shares by reinvesting dividends without having to spend any additional money. This strategy has the potential to significantly increase your total returns and dividend income over the long term, as shown in the Realty Income example.
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While Realty Income remains a reliable choice for investors who prioritize consistent monthly dividend income, it is essential to recognize the inherent market volatility that comes with publicly traded stocks. Real estate investment platforms like Arrivald provide an attractive alternative for those looking to diversify their income streams and potentially limit exposure to market fluctuations.
