Key Points
Realty Income holds more than 15,000 properties and has paid a growing dividend for decades.
The stock's high yield can pay $500 in annual income on a $9,500 investment.
Higher interest rates pose a risk, but Realty Income's diversification and impressive roster of clients should reward shareholders.
If you're looking for dividend stocks that can significantly boost your annual income, Realty Income(NYSE: O) might be one of the best to consider in 2026. It currently offers a high yield surpassing 5% and pays dividends every month.
If you want to earn $500 in annual income, you'll need to buy at least 154 shares -- roughly $9,500 -- at the recent $61.60 share price. This is based on the current monthly payout of $0.2710 per share, or $3.252 on a forward-12-month basis.
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Realty Income has increased its dividend at a 4% annualized rate since 1994. If it continues to grow the dividend at the same rate over the next 20 years, that $500 in annual income would grow to about $1,095.
No dividend stock is risk-free. Higher interest rates can be a major headwind for real estate investment trusts (REITs) like Realty Income. Higher rates raise borrowing costs and lower property valuations. This is one reason Realty Income shares have been weighed down over the past few years.
However, there are a few reasons to expect Realty Income to sustain and grow its dividend. It holds a diversified portfolio of more than 15,000 properties. Some of its largest tenants include major companies such as Dollar General, 7-Eleven, and FedEx, which provide Realty Income steady income across economic cycles.
Realty Income also benefits from scale. For example, it reviewed $31 billion in investment opportunities in the first quarter alone. This allows management to be very selective in choosing the best deals. Of those opportunities, it closed deals totaling $2.8 billion at a 7.1% weighted average cash yield.
This is a solid dividend stock that can provide reliable monthly income for potentially decades, as it has for more than 57 years.
Should you buy stock in Realty Income right now?
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John Ballard has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Realty Income. The Motley Fool recommends FedEx. The Motley Fool has a disclosure policy.
