I have been building my stock portfolio for most of my adult life, and have positions in about 40 different companies right now. I own different stocks for different reasons. Some are exciting growth opportunities, some are tried-and-true winners, and some are excellent income investments.

One stock in particular that has all of these characteristics is Realty Income (O 0.23%). It was actually the first dividend-paying stock I ever bought, and I've added to my position significantly over the years. In fact, Realty Income is the largest single holding in my portfolio, and if I were only allowed to buy one stock, it would likely be the one I'd choose.

Realty Income in a nutshell

Realty Income is a real estate investment trust, or REIT, that specializes in freestanding (single-tenant) properties. About 80% of its tenants are retail businesses, but it has significant holdings in industrial and agricultural properties as well, and it recently entered the market for gambling industry properties.

Now, many people are hesitant to get involved in any investments that are related to retail, but Realty Income isn't a typical retail stock. About 92% of its rental income comes from tenants that are in businesses that are recession-resistant, not susceptible to e-commerce disruption, or both. To name a few examples, its top tenants include Dollar General (NYSE: DG), Walgreens (NASDAQ: WBA), FedEx (NYSE: FDX), and Walmart (NYSE: WMT). In all, Realty Income owned more than 11,733 properties as of September 2022, and it has maintained an average occupancy rate of more than 98% since 2000.

Its tenants sign long-term leases that have initial terms of a decade or more and have annual rent increases, or escalators, built in. And these are triple-net leases, which means that the tenants are responsible for taxes, insurance, and maintenance – virtually all of the variable expenses of property ownership.

All Realty Income needs to do is acquire properties with high-quality tenants in place and enjoy year after year of predictable, growing income. 

A rare combination of income, safety, and growth

So now we've established that Realty Income is a relatively safe business that's designed for steady income and growth. The other hurdle that might stand between many investors and a decision to buy it is that they'll assume this is a "boring" stock. And to be fair, the business itself isn't terribly exciting.

However, its track record tells a different story. Realty Income first listed on the New York Stock Exchange in 1994. Since then, it has never missed a monthly dividend payment and has increased its payouts more than 100 times, at an annualized growth rate of 4.4%.

And here's the key point. Thanks to a combination of income growth, rising property values, and smart capital allocation, Realty Income has delivered a 14.4% annualized total return since its public debut. To put this into perspective, if you had invested $10,000 into Realty Income at the time of its 1994 listing, and reinvested your dividends along the way, you'd have about $500,000 today.

By most standards, a 50-bagger in less than three decades isn't a boring investment. In fact, Realty Income has produced roughly four times the S&P 500's total return in the same period.

O Total Return Price Chart

O Total Return Price data by YCharts

The best all-around dividend stock?

To be sure, there are several other stocks in my portfolio that could also be standalone investments. A solid case could be made for Berkshire Hathaway (NYSE: BRK.A)(NYSE: BRK.B), and of course, a low-cost S&P 500 index fund like the Vanguard 500 Index Fund (VOO 0.04%) is essentially an all-in-one stock portfolio that can deliver strong performance over time.

Having said that, I've said before that Realty Income is perhaps the best all-around dividend stock in the market, and I truly believe it. It's one of the only stocks that I'd be willing to buy shares of and then not check my investment account for years -- the business is that solid. I've owned Realty Income for years, have never sold a share, and plan to hold it for decades to come.