Dividend Payers:

O @ $61.24

Realty Income Corporation (O)

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This is a R.E.I.T (Real Estate Investment Trust) and it pays an unqualified dividend.

This is best held on a ROTH IRA.

Don’t let the 3.91% dividend yield fool you. This stock has never missed a dividend and they raise the dividend every year. Plus they pay monthly. Put this on a drip to take advantage of compounded interest.

The company has paid uninterrupted dividends since 1970. Realty Income reorganized as a publicly traded REIT in 1994 and has increased its dividend payments for 73 consecutive quarters.

The company’s top 5 tenants by percent of revenue are Walgreen’s (6.9% of revenue), FedEx (5.2% of revenue), Dollar General (4.6% of revenue), LA Fitness (4.2% of revenue) and Dollar Tree/Family Dollar (4.2% of revenue).

Realty Income uses triple net leases to protect its cash flow.

Triple net leases make operating expenses such as taxes, maintenance and insurance the responsibility of the tenant rather than the company. This protects Realty Income from maintenance issues and rising taxes and insurance rates.

Investors in Realty Income should expect growth of between 7% and 9% a year when the U.S. economy is growing and stagnation when the United States is in a recession. Overall, shareholders should expect total returns of about 10% a year from dividends (4%) and earnings-per-share growth of 6%.