Recent Buy – O

A new month, a new purchase.

REITs have been on the decline for months, but I wasn’t really looking to add to my REIT holdings unless the price was right.  With the recent market declines in this first week of February, one REIT I hold dipped low enough for me to want to add more shares.  Like my previous stock purchase in January, this one wasn’t large, but it brings more dividend income into the Portfolio, and monthly dividend income at that.

Today, I added to my existing position in Realty Income. (O).  O is known as The Monthly Dividend Company.  Many dividend growth investors are familiar with O, so I won’t go into all the details here.  Just know that O is a commercial retail REIT that generates rental income from its 5,000+ freestanding commercial properties thanks to long-term net lease agreements it has negotiated with its tenants.

O has been the purchase target of many dividend growth investors in the past few weeks as the price has declined.  In fact, O started the year at a shade over $57/share, and has dropped ~13% in 5 weeks.  Shares of O haven’t traded this low since the end of 2015.

Here are my purchase details…

 

O

On 2/6/18, I purchased 32 shares at $49.639/sh, for a total of $1,588.45.

The yield on these additional shares is nearly 5.3%.

I now hold 115.014 shares of O.  This purchase results in an additional $84.10 in annual forward dividend income, bringing my forward dividend total for O to $302.26.  Thus, I’m now looking at $25/mo. in dividends from O.

O now sits side-by-side with Crown Castle International (CCI) as the largest REIT position in my Portfolio.

While O’s price may remain depressed in the near-term thanks to concerns about rising interest rates and their impact on REITs, long-term I think O can deliver 5% growth.  Couple that with the nice 5% yield, and the total return looks terrific to me.

 

Any thoughts on my O purchase price?  If you already bought O recently, are you looking at possibly adding more?  Are there other REITs you like more at this time?  Are you looking at additions in other sectors instead?  Utilities perhaps?  Please comment!

12 thoughts on “Recent Buy – O

  1. I doubled my position in O yesterday by adding 13 shares @ 50. Great minds think a like and all that. Indeed the entire community seems to be pouncing on O 🙂

    1. You may get the chance to add more, Tom, as O just continues to drift lower. I just see better long-term value each day it drops. Of course, you’d get paid a nice dividend while you wait for the price to recover.

  2. Congrats on this purchase ED. This REIT is very well-managed and should provide you with good steady income for years to come. I think the interest rate threat is overblown with a yield that is over 5%, and the large number of long term leases will ensure predictable cash flow for the foreseeable future.

    I am tapped out right now, and thus I cannot take advantage of this opportunity. But if prices stay this low, my next infusion of capital will be into this stock.

    Congrats again on the excellent purchase.

    1. Hi, DF. I’m with you on O. In this instance, I was able to set a price target and wait. I don’t always have the patience to let that happen, but given the near-term headwinds and overall market action, I figured I’d hold off until I got a price that I was very happy with. We’ll see what happens from here. Thanks for sharing your thoughts!

  3. Hey ED, I’ve read a bit about O over the past couple of months from other blogs – sounds like a good buy. If we had more favourable tax circumstances from buying international stocks it would be on my watchlist too!

    1. How prohibitive is the Australian taxation on international stocks, Frankie? I know there’s a foreign tax that U.S. investors have to pay, but I haven’t looked into too much. I’ve stuck to U.S. investments inside my Portfolio, as there are lots of U.S. stocks to choose from.

    1. Hey Matthew, O has been a popular add these days. I’m sure you’ll enjoy the monthly dividend income O will provide, just like me. I saw you recently added some other U.S. stocks as well. JNJ is an excellent choice… I’ve been a long-time shareholder of JNJ. I hope all the recent buys work out well for you.

  4. You know I am a big fan of this purchase. That is some position you hold now. $25 a month for one company, nice. That was my entire January for 5 companies lol. Although that should pick up quickly. Looking forward to seeing the growth in your portfolio from this buy.

    1. I’m a fan, too. Yeah, $25/mo. from O is great. The beauty of the dividend payments from quality companies is that they get stronger with time. I suspect your next January will blow away this one, DD. Thanks for dropping by and commenting!

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