Realty Income (O 2.99%) is technically a retail stock, but this real estate investment trust is very different from most other retail-focused investments. In this Fool Live video clip, recorded on Nov. 15, Fool.com contributor Matt Frankel explains to colleague Jason Hall why Realty Income could be such a great investment, and why he's owned the stock for many years and doesn't plan to sell a single share.
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Matt Frankel: They're a retail REIT, but they're not just a typical retail company. They are what is called a net lease REIT. They specialize in single-tenant or freestanding properties. Most of them are occupied by either essential businesses, businesses that are recession-resistant, or all of the above.
Walgreens (WBA 1.14%) is a major tenant of theirs. Dollar stores are a major tenant of theirs. Their first property was at Taco Bell in the 1960s. They have over 6,000 properties in the U.S. and Europe. They just actually spun off their office properties today, the new share showed up in my accounts. Now they are more of a pure-play retailer. They have a few industrial properties, but they're generally related to their retail tenants, like they'll have a storage facility for one of their retail tenants. They have a phenomenal track record of delivering returns -- over a 15% annualized total return since listing on the New York Stock Exchange in 1994. That's a long track record of keeping up a return like that. They just, I believe, reached dividend aristocrat status.
Jason Hall: Last year, or earlier this year.
Frankel: They've made more than 600 consecutive monthly dividend payments, dating back to before their NYSE listing. They've raised the dividend, something like 100 times since 1994 when they went public. It's just a phenomenal track record of performance, stability. Their earnings are almost always boring in the best possible way. They do exactly what they say they're going to do, maybe a little bit more to keep analysts happy. Great income play. It's part of my retirement income strategy for sure and one that's served me well, more than a decade since I first bought it, and I hope to own it for decades more to come. I don't see it going anywhere in my portfolio.
Hall: I love showing this chart. They pay a dividend every month and you see those little itty-bitty tiny increases, this is a company that's been able to increase its dividend like almost every month. It's not just you get your dividend increase once a year. It's incredible how well-managed this company is too and the e-commerce resistance.
Frankel: Recently, they started settling for quarterly increases lately.
Hall: Yeah. But they're a giant and they're going to get bigger too, I really like this business.