Stock Updates

Morning Trending Tickers: Realty Income Corporation (O)

The central principle of investing in stocks is looking at how the business is performing and operating. It is what drives the value of its stock higher. The rest is merely a by-product and a short life-span in the effect of the stock. This “driver” is what named Fundamentals. Moreover, technical analysis is then added to the fundamentals to ensure that the technical and fundamental data converge to increase the probability of your decision. An excellent example of how this would look complete, would be to gauge Realty Income Corporation (NYSE:O).


Fundamental Analysis: (“the driver”)


The Realty Income Corporation is based out of USA. When looking at Realty Income Corporation, it is crucial to find out the sector and industry it belongs too, which is respectively Financial, and REIT – Retail. It helps to provide a relevant benchmark to how the company is performing against others in the industry. Alternatively, you can use the Price-to-Earnings ratio (P/E) to compare against others and to gauge growth potential. However, P/E only paints a small picture of what else could be used to compare against its main competitors. Because 48.61 is isolated for the performance of the stock alone, the 45.83 factors in growth to get a better outlook on its future performance since P/E can present a high-growth stock as overvalued. An increase in the PEG over time shows signs of continued consistent growth. Realty Income Corporation current annual EPS growth is at 3.90%, thus confirming the 45.83 ratio.


The current dividend yield for Realty Income Corporation is 4.46%. The dividend yield expresses to the investor the amount of return to expect against the amount of capital invested in the stock. That is why the dividend yield is directly affected by the current share price. If the yield were to stay constant, but the stock price to decrease, then you would see an increase in the dividend yield. Dividends are paid out to investors from the free cash flow that the company has. Currently, Realty Income Corporation has a free cash flow of 65.43 showing that they can continue to pay dividends without any problems.


It always pays to check deeper than the surface of the usual business metrics. An investor should look at the management end of the company and how their decisions have reflected through the company stock. Check to see if the CEO’s and other directors, officers have a stake in the business which can show confidence inside management. Same goes with institutional ownership which is another spectrum indicating confidence or lack thereof. Realty Income Corporation owner and institutional ownership are respectively 0.30%, and 71.50%.


Technical Analysis:

A trading decision should not be made solely based on its fundamentals. One must always look at what the charts may provide. If not, an investor can expect disastrous consequences, such as buying in an under or over extended market or at, and that’s just one example. There are tons of technical indicators out there, but we will focus on some primary ones. The Realty Income Corporation’s 50 and 200 period moving averages are , and , which can gauge the strength or weakness of a trend against long and short-term outlooks.


The Realty Income Corporation’s average volume is 1547.5. This technical indicator is important to understand the type of liquidity the stock holds. The more volume, the easier it will be to exit a position and vice versa. Moreover, when the average volume increases or decreases, can provide sentiment to the volatility of the stock. Right now, Realty Income Corporation’s volatility for the month is 1.39%. Lastly, more shares traded means less of a spread in between the bid and the ask, which can effect your bottom line. An investor can also look at the weekly volatility to gain greater confirmation to their outlook.


Finishing Up:

Although you have the information necessary from the fundamental and technical side of the stock, it is best to check for any impending catalysts such as earnings, guidance, or any other economic event that can cause the stock to deviate from its current position. More so, be sure to check the company‚Äôs debts and whether they can afford the monthly interest payments. Realty Income Corporation’s debt-to-equity ratio is and its interest coverage is , which will tell you if the company is financially sound enough. Having high debt doesn’t automatically mark a company as poor. A company can have significant amounts of debt, but the return on investments must make it applicable. Take the current research of Realty Income Corporation, and include your metrics to make a sound investing decision. If you don’t like current position of Realty Income Corporation, at least you have the knowledge to duplicate on any other company stock.

About the author

Mark Hines

Leave a Comment