Realty Income Corporation
Realty Income Corporation Fundamental Analysis
Realty Income Corporation (O) shows moderate financial fundamentals with a PE ratio of 55.07, profit margin of 18.41%, and ROE of 2.70%. The company generates $5.9B in annual revenue with strong year-over-year growth of 29.23%.
Key Strengths
Areas of Concern
The stock receives a Fundamental Health Score of 57.1/100 based on profitability, valuation, growth, and balance sheet metrics. The C grade reflects average fundamentals, with notable risks in certain areas.
Fundamental Health Score
We analyze O's fundamental strength across five key dimensions:
Efficiency Score
WeakO struggles to generate sufficient returns from assets.
Valuation Score
WeakO trades at a premium to fair value.
Growth Score
ModerateO shows steady but slowing expansion.
Financial Health Score
ModerateO shows balanced financial health with some risks.
Profitability Score
ExcellentO achieves industry-leading margins.
Key Financial Metrics
Is O Expensive or Cheap?
P/E Ratio
O trades at 55.07 times earnings. This suggests a premium valuation.
PEG Ratio
When adjusting for growth, O's PEG of 6.61 indicates potential overvaluation.
Price to Book
The market values Realty Income Corporation at 1.48 times its book value. This may indicate undervaluation.
EV/EBITDA
Enterprise value stands at 6.76 times EBITDA. This is generally considered low.
How Well Does O Make Money?
Net Profit Margin
For every $100 in sales, Realty Income Corporation keeps $18.41 as profit after all expenses.
Operating Margin
Core operations generate 28.30 in profit for every $100 in revenue, before interest and taxes.
ROE
Management delivers $2.70 in profit for every $100 of shareholder equity.
ROA
Realty Income Corporation generates $1.45 in profit for every $100 in assets, demonstrating efficient asset deployment.
Following the Money - Real Cash Generation
Operating Cash Flow
Realty Income Corporation generates strong operating cash flow of $4.12B, reflecting robust business health.
Free Cash Flow
Realty Income Corporation generates strong free cash flow of $3.98B, providing ample flexibility for dividends, buybacks, or growth.
FCF Per Share
Each share generates $4.27 in free cash annually.
FCF Yield
O converts 6.42% of its market value into free cash.
Financial Ratios Analysis
Valuation Ratios
P/E Ratio
Price to earnings ratio
55.07
vs 25 benchmark
PEG Ratio
Price/earnings to growth ratio
6.61
vs 25 benchmark
P/B Ratio
Price to book value ratio
1.48
vs 25 benchmark
P/S Ratio
Price to sales ratio
10.45
vs 25 benchmark
Financial Health
Debt/Equity
Total debt to shareholders' equity
0.83
vs 25 benchmark
Current Ratio
Current assets to current liabilities
0.51
vs 25 benchmark
Efficiency Ratios
ROE
Return on equity percentage
0.03
vs 25 benchmark
ROA
Return on assets percentage
0.01
vs 25 benchmark
ROCE
Return on capital employed
0.02
vs 25 benchmark
How O Stacks Against Its Sector Peers
| Metric | O Value | Sector Average | Performance |
|---|---|---|---|
| P/E Ratio | 55.07 | 23.43 | Worse (Expensive) |
| ROE | 2.70% | 685.00% | Weak |
| Net Margin | 18.41% | 2002.00% | Weak |
| Debt/Equity | 0.83 | -21.97 (disorted) | Distorted |
| Current Ratio | 0.51 | 11.11 | Weak Liquidity |
| ROA | 1.45% | 166.00% | Weak |
O outperforms its industry in 0 out of 6 key metrics, but lagging in P/E Ratio.
Historical Growth Performance
5-Year Growth Trajectory
This section reviews Realty Income Corporation's 5-year compound annual growth rate (CAGR) and compares its performance against the typical investment style of its industry.
Revenue CAGR
28.12%
Industry Style: Income, Inflation Hedge, REIT
High GrowthEPS CAGR
-28.67%
Industry Style: Income, Inflation Hedge, REIT
DecliningFCF CAGR
20.91%
Industry Style: Income, Inflation Hedge, REIT
High Growth