Our founders, William and Joan Clark, started with a simple idea – to use the rent collected from commercial properties held under long-term leases to support monthly dividends to shareholders. Today, we continue to maintain that same commitment to the dividend.
Dividend Amount and Track Record
(as of 3/16/15 and since our 1994 NYSE listing, except as noted)
• 536 consecutive monthly dividends paid (since our founding in 1969)
• 80 dividend increases
• 70 consecutive quarterly increases
• Dividend growth of 152.7%
• Compound average annual dividend growth rate of approximately 5%
|Monthly Dividend Amount (for shareholders of record on 4/1/15)||$0.1895|
|Annualized Dividend Amount (for shareholders of record on 4/1/15)||$2.274|
Why Get Dividends from Us?
- Monthly dividends. Realty Income pays cash dividends monthly, rather than quarterly. The predictability of our business model’s underlying revenue stream affords us the ability to deliver more frequent dividend payments to shareholders.
- Growth. Since our public listing in 1994, our dividend has grown at a compound average annual growth rate of approximately 5%. We have increased our cash dividend for 70 consecutive quarters.
- Stability. Dividend income we provide to our shareholders tends to be reliable since it is supported by long-term leases with tenants we have determined can be relied upon to make lease payments. Throughout our operating history, we have never decreased the amount of our regular monthly dividend payment.
How Often are Dividends Increased?
Dividends are increased when and if declared by our Board of Directors after a review of our financial condition to determine whether or not a dividend increase is supported by increases in our cash flow. Historically, we have generally increased the dividend each quarter. However, we cannot guarantee that this trend will continue into the future.
How Do I Measure Realty Income’s Dividend-Paying Capacity?
Typically, investors look at a company’s dividend payout ratio to determine the sustainability of the dividend payment. This ratio is usually calculated based on net income. As a real estate company, there is a supplemental measure called “adjusted funds from operations”, or “AFFO”, that better reflects the company’s ability to generate cash flow to pay the dividend. Most research analysts use AFFO to assess dividend-paying ability. The AFFO calculation removes the non-cash impact of real estate depreciation and amortization and property sale gains or losses to net income, while adjusting for other unique revenue and expense items that are not pertinent to measuring ongoing operating performance.
Why net income is an improper measure to determine dividend-paying capacity:
- If net income is the only measure used to assess operating performance and dividend-paying ability for a real estate company, it appears that most of these companies pay out more in dividends than they earn. This is because depreciation expense is a significant non-cash charge for companies whose assets are primarily real estate.
- The net income calculation also includes non-recurring gains or losses from the sale of properties, which can cause net income to vary materially.
How depreciation works:
- Companies are typically required to estimate the “life” of their buildings and equipment and depreciate them over their estimated useful lives. Based on these estimated lives, they are required to record depreciation charges each period.
- Real estate assets, on the other hand, are long-lived, income-producing assets and, in many cases, may actually appreciate in value over time.
- This depreciation charge is usually the largest expense on the REIT income statement, particularly if the REIT (such as Realty Income) owns a very large real estate portfolio.
How we calculate AFFO:
You can learn more about how AFFO is calculated by viewing our Adjusted Funds from Operations calculation from our most recent earnings release.
Dividend Payment Information
Here you will find information on our common and preferred stock declared dividends, our payment history, current yield and tax information in our Investors section.
See the latest information
Past performance is not a reliable indicator of future performance. There is risk that dividends will not always increase, that dividends will not be declared according to past history, or that dividends will be declared at all.