As a longtime Fool contributor and senior REIT analyst for our Millionacres real estate brand, I’ve invested in plenty of REITs. In fact, real estate investment trusts account for seven of my 20 largest stock positions. However, Realty Income (NYSE:O) was the very first REIT I ever bought, and it remains one of my largest investments. In this Fool Live video clip, recorded on July 16, as part of a show with my fellow contributor Brian Withers and chief growth officer Anand Chokkavelu where we ranked my top 20 stock positions, I discuss why I’m such a fan.
Matt Frankel: My biggest surprise here is how much we disagreed on Realty Income. That was my No. 5, and you guys were 12 and 18. Since ’94, they’ve produced something like a 3,800% total return. A $10,000 investment would be worth almost $400,000 in that company. That’s like a 40-bagger in less than 30 years, Anand. I know it’s not that long-term oriented, but you can’t argue with that.
Anand Chokkavelu: To be fair, that was all the Anand ignorance discount. That was the top one of the REITs and stuff for me. It was 12 for that. I know you’re hot on it and looking at it, I mean, it’s got a nice dividend, a great portfolio and track record. Yeah, I would trust Matt’s No. 5 ranking over my No. 12.
Brian Withers: Unfortunately, the way I look at it, I really don’t look at companies that are able to grow their bottom line. I’m more looking at top-line revenue growth, and these guys had single-digits for the last three quarters.
Frankel: Real quick, let me show you one thing. This is the stats of Realty Income. Since it’s ’94 New York Stock Exchange listing, 15.3% annualized returns, paid 612 consecutive monthly dividends. That’s over 50 years, dating back to before they were public. They’ve increased the dividend for 95 consecutive quarters. That’s an amazing record. Since they started, they grew from a single Taco Bell, that was their first property. They had one Taco Bell.
Chokkavelu: Now they own a Chipotle location.
Frankel: I think Taco Bell is actually still a tenant of theirs. For a value investor for a dividend, someone who prioritizes income, it doesn’t get much better than that. I mean, that’s great dividends plus phenomenal returns.
Chokkavelu: I think you’ve missed your calling, I know you used to live in Key West and you should be selling Florida real estate the way you’re pushing these real estate stocks on us.
Frankel: I guess I should.
Chokkavelu: It’s convincing, especially with their monthly dividend to be able to say, you used to quarter, so you’re like, wait over 600 consecutive and you forget it’s months not quarters but still.
Frankel: It’s still impressive.
Chokkavelu: Even so, was that 50 years?
Frankel: About 51 years. 1969, I think is when they were founded.
This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.
View more information: https://www.fool.com/investing/2021/08/06/heres-the-first-reit-i-ever-bought-and-why-i-never/