Recent Buy – Realty Income (O)…Again

2018 is off to a roaring start. The stock market continues to rise and companies are announcing dividend increases and share buyback programs left and right.  Dividend investors everywhere are feeling a nice jolt, that’s for sure.  Outside of dividend increases, January has been a busy month for me.  It has been a long, long time since I have done this.  But last week, I purchased Realty Income (O) for the second time in January.

In my last purchase article, I provided detail about my purchase and ultimately why I purchased shares in Realty Income (O) the first time.  So I will not bore you all with the details again.  However, to quickly summarize, I am a huge fan of O’s diversification of properties, geography, and tenants.  Further, the company’s dividend history is great and The Monthly Dividend Company is on the verge of becoming a Aristocrat.  On top of it, the company just announced a 3% dividend increase and their last earnings report was pretty darn solid.  Honestly, there is a lot to like about the REIT.

In my last article, I also mentioned that I am trying to expand the positions I currently own in my portfolio.   Rather than using small sums of capital to initiate a new position, I am going to use small capital purchases to grow my current positions, increase the dividend I receive from each company, and ultimately, the dividend re-investment.   O was my #1 target for this strategy as I entered 2018 only owning 42 shares of O.  That definitely has changed!

There was one other factor that influenced my purchase.  My last purchase consisted of 18 shares at $54.96 per share.  And guess what, the price immediately fell after my purchase.  While I wasn’t able to transfer funds into my Roth IRA in time to catch the stock while their price was in the high $52 per share and mid $53 per share range, I was able to capture additional shares at a lower price.

This week, I was able to add 10 more shares of Realty Income (O) at $54.14 per share!  This purchase added $26.28 to my forward dividend income.  Now, I own 70.1082 shares of The Monthly Dividend Company, which produces $146.40 in dividend income.   What’s cool is that I should add ~.67 shares of Realty Income each quarter!   The best part is that this may not be my last purchase if the price continues to fall.   But now, I am thrilled with my purchase and the position I am slowly amassing.

What are your thoughts about my second purchase of Realty Income?  Would you have purchased Realty or a different company?  What stocks are on your watch list here in the next couple of weeks?

Bert

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43 thoughts on “Recent Buy – Realty Income (O)…Again

  1. I added to O earlier this month below $52. I know the disappointing feeling when you buy and the stock immediately drops. Happened to me when I added to D in January. Bought at $78 and it dropped to around $75. Can’t second guess yourself. To answer your question, I like your purchase of O. I think any price below $55 is reasonable for a long term buy and hold investor. Tom

    • Tom,

      You know what’s funny, this is the second time this has happened to me with O this month. Twice now, I have purchased shares only to watch the stock price fall $2-$3 per share the following day. You’re right though, you can’t be upset and get beat up over it. You were comfortable with it at the price you purchased the stock at, so enjoy the purchase. There is no crystal ball and the stock could have jumped up just as easily as it fell. Use the information you used at the time of the purchase. Congrats on the D purchase by the way!!

      Bert

  2. The yield of Realty Income has reached 5% and that’s definitely a buy zone in my opinion. If the share price stays this low for while i think about adding some more shares. Realty Income has proven over a long time period that they can generate profits in any environment. The significant price decline has no specific reason within the company. – Conclusion: it’s a “gift” from Mr. Market and i’ll take it.

    Cheers,
    DividendSolutions

    • DS,

      The company is still well in the buying zone for me and I may add yet again if the price continues to fall. You’re right, this is a gift and I need to take advantage of the gift while I can. Glad we are taking advantage here.

      Bert

  3. (O) is the one in my list of positions that always irks me. It’s been a great and interesting dividend provider with it’s monthly dividend, but it’s the one on my list that is always in the red. I purchased high, I think around $57.10 and it’s been under since. In the back of my mind, I think about selling it if it gets near $57 again, and repurchasing when it drops to around 52-54 just so I can see some growth. Is this rational, or should I just hold?

    • Brian,

      I’m never a fan of trying to time a purchase. I’ve considered loss harvesting before and then rebuying the stock after 30 days. But ultimately, I decided against trying to time the market. I know people that have done it, but it isn’t my cup of tea. Personally, I’ll just continue to enjoy the monthly dividend from the company. Plus, the difference between 52-54 and 57 isn’t that large, if that helps. Ultimately though, you’ll have to let us know what you decide.

      Bert

    • Doug,

      Thanks! I would love to continue adding more if the price continues to fall here. How nice would it be to see this position increase to 100! Do you have a price point that you are waiting for to buy?

      Bert

    • Stockles,

      93 shares! That’s amazing. One day I’ll get there and I will keep adding if the stock continues to stay in this range. You’ll be close to 100 in no time with the dividend re-investment at these lower prices.

      Bert

  4. O is a power name for many dividend income investors, though it’s not in my portfolio. I have been buying into the health REITs in January with HCN and LTC as the whole sector has been beaten silly to start 2018. Looking forward I still like the REITs and some utility names too. Nice pick up and love the fact the the buying is continuing. Consistent buying and staying in the game will make you a winner in the long run!

    • DivHut,

      I cannot believe that REITs have decreased so much in January. I’m glad to see that you are taking advantage of the decreases and building your healthcare REIT positions. Those are some strong names in the industry. Hopefully the buying will continue throughout 2018 as we continue to unlock cashflow in our household. I appreciate the motivation and keep on pushing me to keep my dividend investing going strong.

      Bert

    • MDD,

      Thank you very much. Congrats to you as well with the purchase and receiving that first dividend. You better get used to it, because you will have 10 more to collect in 2018. Man do I love this company.

      Bert

  5. I think buying O under $55 is a great trade. Interest rate concerns are putting short-term price pressure on every REIT, but I don’t believe higher interest rates will negatively affect O’s business.

  6. Solid buy. I will be looking to add as well after I decide what to do with my options on FB and AAPL. I thought I read awhile back you use capital one? What are your thoughts on the conversion to etrade? I was very comfortable with capital one now looks like I’ll be researching other brokers.

    • Robert,

      Thank you! I do use Capital One. I have to do a full re-evaluation of my brokerage and now bank account. Unfortunately, I switched to banking exclusively with Capital One since I held my investment accounts there. It was so nice having my bank accounts and my investment accounts under only one umbrella rather than two to three. Now though, that changes. Capital One was a great brokerage and I know Etrade doesn’t offer some of the perks that I really enjoyed with Capital One. Oh well. But I am now deciding between either switching to a one stop shop (Ally Bank) or a brick and mortar bank plus investment account like Fidelity option. Do you use Capital One?

      Bert

      • Yes my smaller taxable account it with capital one. Enjoyed it so far but like you I have to research other brokers now. I bank with BOA so I might look into Merrill edge since they offer free trades for those with checking accounts with BOA.

        • Robert,

          From this capital one experience, I can tell you that it has been nice having everything under one roof. IT’ll be hard to do now and I may have to change my banking/investing habits slightly; however, if I were you, I would give that option some serious consideration.

          Bert

  7. Well I’m all for it. Imagine when you can own enough O such that the dividends you earn are enough to buy you one whole share of the stock! Right now I invest enough into O every month to purchase one whole share. At the time of this writing, the stock price is $51.59. Very enticing.

    • Dividend Portfolio,

      I appreciate the support here! Man that is a sweet, sweet vision. It would be awesome to be able to receive one share a quarter. However, my position would have to grow significantly haha

      Bert

  8. I like it! Picked up some O myself.I can’t wait to add it to next months dividend income report, and then the month after that, and then the month after that. You get it! Great buy!

    • Yes! Glad you took advantage of the price decreases. I’m pumped to read your next monthly dividend income report as well. That is the beauty of owning shares in “The Monthly Dividend Company!” Man investing is sweet!

      Bert

  9. Never a bad thing to pick up more of a monthly dividend payer. I was thinking about it myself since it is getting close to the $51 mark. But no capital left after the last purchase. Too bad.

    • Thank you very much Seedling! The price keeps on getting better as well. I’ve enjoyed averaging down my cost basis with each subsequent purchase of $O. Looks like you added some as well based on your tweet.

      Bert

  10. Great buy Bert, I recently purchased a few shares of O aswell and would love to expand my position even further now they are approaching the $50 mark! Great way to keep your portfolio growing, keep the updates coming!

    DI

  11. I like O, and ready to add more, whenever price goes closer to $45 or lower. I think reits are under heavy pressure and there is some more selling to come in wake of interest rate rise; some investors are finding safer harbors in 10 yrs treasuries. Its solid company but, final down slide climax has not occurred yet 🙂

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