Realty Income (NYSE:O) changed the way people think about real estate investment trusts (REITS). Although they are highly sought after by income investors for their dividends that typically support higher than average yields, Realty Income did them one better by making its payout every month.

Billing itself “The Monthly Dividend Company,” the REIT blazed a new path in the field that numerous other REITs now follow. The track record of payments for O stick is remarkable.

Realty Income has declared over 650 consecutive monthly dividend payments. Since listing on the NYSE in 1994, the REIT has increased its dividend every quarter for 108 straight quarters. The dividend yields 5.39% annually.

Having raised the payout for 30 consecutive years, Realty Income is a Dividend Aristocrat, or a stock that is part of the S&P 500 index that has increased its dividend for 25 or more years.

Since its IPO three decades ago, Realty Income has been a phenomenal stock to own, providing investors with an astounding 5,110% total return. In comparison, the S&P 500 has returned less than 2,200%. In other words, $10,000 invested in O in 1994 would be worth over $521,000 today with reinvested dividends.

The question is, where does Realty Income stock go from here. 24/7 Wall Street offers readers insights into our assumptions about the stock’s prospects, what sort of growth we see in O stock for the next several years, and our best estimates for Reality Income stock price each year through 2030.

24/7 Wall St. Insights:

• Realty Income (O) is the premiere dividend REIT that pays shareholders monthly.
• While the high interest rate environment of the past two years was a substantial headwind for the industry, the outlook markedly improves as rates return to historical levels.
• Sit back and let dividends do the heavy lifting for a simple, steady path to serious wealth creation over time. Grab a free copy of “2 Legendary High-Yield Dividend Stocks“ now.

Realty Income’s recent stock headwinds

Here’s a table summarizing the performance in share price, revenues, and adjusted funds from operations (AFFO) of O stock from 2019 to 2024:

	Stock Price	Revenue	Adjusted Funds From Operations (AFFO)
2019	$71.30	$1,488,163	$1,050,000
2020	$60.20	$1,647,087	$1,172,600
2021	$71.59	$2,080,463	$1,488,800
2022	$63.43	$3,343,681	$2,401,400
2023	$57.42	$4,078,993	$2,774,900
TTM	$57.89	$5,007,100	$3,430,500

_{Revenue and AFFO in thousands. Data source: Realty Income SEC filings.}

The REIT ended 2019 on a high note, closing out the year with a 21% total return, but like the rest of the market, the next year would be turned upside down due to the pandemic. O stock ended 2020 with a greater than 11% loss.

While Realty Income would bounce back sharply in 2022 with a 24% gain, it was a rally that could not be sustained due to rapidly rising inflation and a Federal Reserve determined to tame it. The central bank’s unprecedented 11 consecutive hikes in the federal funds rate would send the REIT market into a tailspin.

That’s because REITs borrow money to invest in new real estate and the dramatically higher rates they pay hit their bottom line hard. Realty Income tried to mitigate that by hitting the equity markets. From 2013 to 2020, O’s shares outstanding rose at a fairly consistent 8.8% annually.

The onset of inflation and spiraling interest rates saw the REITs stock issuance surge to a 26% compound annual growth rate from 2020 to 2023. The Fed started to lower rates this year, but as inflation flared anew, the rate-easing policy seems to be on hold. 

Through it all, however, Realty Income was able to continue increasing revenue and AFFO. It used those funds to continue rewarding shareholders with dividend hikes.

Key drivers of O’s stock performance

1. Global pandemic. Despite the headwinds it faced, Realty Income has held up well in adversity. The first shock to the share price was the pandemic, which caused the market and REITS to plummet. Government stimulus spending, however, ignited rampant inflation that rose to its highest levels in 40 years. The Fed’s attempt to rein in the spike by raising interests to their highest levels since 2001.
2. Quality tenants. Although the shock to the system was significant, Realty Income was able to withstand the stress test due to the quality of its tenant base. It counts dozens of top-shelf retail outlets amongst its tenants, including Amazon (NASDAQ:AMZN), Starbucks (NASDAQ:SBUX), and Chipotle Mexican Grill (NYSE:CMG).
3. Diversification. Its three largest tenants by space leased are Dollar General (NYSE:DG), Walgreens Boots Alliance (NASDAQ:WBA), and Dollar Tree (NASDAQ:DLTR). Although the dollar stores and pharmacy chain are encountering headwinds of their own, none represents more than 3% of the total portfolio, meaning its broad diversification reduces the impact any one tenant will have. It has also expanded into industrial markets, gaming, and data centers, as well as having a growing geographical footprint.

Realty Income (O) stock price forecast for 2025

The current Wall Street consensus one-year price target of Realty Income stock is $63.85 per share, which is 10.29% higher than today’s price of $58.20. Of the 14 analysts covering Realty Income stock, the current rating is a “Buy” with one-year price targets as high as $71 per share and as low as $57 per share.

24/7 Wall Street sets its one-year price target at $64.96 per share. If we compare O’s price-to-AFFO versus its peers, such as Agree Realty (NYSE:ADC) or Simon Property Group (NYSE:SPG), we see they trade at an average P/AFFO of 12.31 while O goes for 10.52.

Similarly, over the past 10 years, Realty Income has itself traded at an average price-to-funds from operation (P/FFO) of 21.59, but today it sits at just 11.63.

And running O through a dividend discount model, I get a fair value of $62.19 per share. So averaging the valuation of AFFO multiple and its DDM intrinsic value, we arrive at a price just below $65 per share.

Realty Income’s share price estimates 2026 to 2030

Valuing Realty Income’s stock price for the coming years, we will take a look at expected revenue and AFFO and give our best estimate of the market value of the company by assigning a price-to-AFFO multiple.

Year	Revenue	AFFO
2026	$3,876,879	$3,263,247
2027	$4,652,255	$3,837,579
2028	$5,582,706	$4,512,992
2029	$6,699,248	$5,307,279
2030	$8,039,097	$6,241,360

_{Revenue and AFFO in thousands.}

How Realty Income’s next 5 years could play out

Realty Income has grown its average AFFO per share at around 5.3% for the past 20 years. Its dividend has grown at a CAGR of 4.3% since its IPO with a yield of 6%, giving shareholders a better than 11% total return.

In 2026, with an estimated $3.2 billion in AFFO and a P/AFFO of 12.34, we arrive at a stock price of $68.61. This is based on O’s continued ability to produce strong revenue and AFFO growth despite interest rates remaining elevated.

In 2027, with AFFO of $3.8 billion and assigning a P/AFFO of 13.09, we get a share price of $72.40, as O continues to issue stock to raise cash and offset high borrowing costs.

Heading into 2028, we have AFFO of $4.5 billion, and P/AFFO continues to rise, it gives us a stock price of $76.35 per share. 

By this point, interest rates have declined to historical levels helping to significantly lift profitability. With $5.3 billion in AFFO in 2029 and a P/AFFO of 14.69, O stock will hit $80.44 per share.

Realty Income stock price target for 2030

Although Realty Income’s stock has steadily risen as the interest rate environment improved and because it no longer needs to to issue significant amounts of stock to offset borrowing costs, the REIT has continued to increase its dividend every quarter for the past six years. Its total return handily surpasses that of the S&P 500.

For 2030, we estimate AFFO reaches $6.2 billion with a P/AFFO of around 16, still well below its 10-year average, but more in line with many of its peers. That give us a price target of $84.74 per share.

Year	Price Target	% Change from Today
2025	$64.96	Upside of 11.62%
2026	$68.61	Upside of 17.89%
2027	$72.40	Upside of 24.40%
2028	$76.35	Upside of 31.19%
2029	$80.44	Upside of 38.21%
2030	$84.74	Upside of 45.60%

 

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