What happened

Shares of Realty Income (O -0.17%) dipped 6% in the first half of 2023, according to data provided by S&P Global Market Intelligence. There wasn't any news specific to the company, but there were a variety of market and economic factors that led to this dip.

So what

Realty Income is a top real estate investment trust (REIT). It's one of the largest REITs in the world, with 12,400 properties in 84 industries, and leases them to essentials companies like 7-Eleven and Walgreens. Occupancy is 99% right now, which is usual.

The REIT is posting excellent performance, with revenue up 17% year over year, funds from operations up from $1.01 last year to $1.03 this year, and adjusted funds from operations steady at $0.98. It has a strong pipeline of new properties under construction to lease and sees a large market opportunity.

The real estate industry is suppressed right now in the high-interest-rate environment, and investors might be looking at other opportunities. A 6% drop isn't precipitous, although it's inverse to the 3% increase in the S&P US REIT.

Other REITs may be recovering from previous investor fallout or run a more growth-oriented model that's resonating with investors right now. Many of the "flight to safety" stocks that captured market interest when economic uncertainty began last year are now showing a little wear as investors re-embrace riskier growth stocks. 

Another factor could be that some of Realty Income's top tenants, like Lowe's and Dollar General, are under pressure right now. Realty's tenants are highly diversified in industry and company, and most are essentials companies like grocery stores and convenience store. But it's a retail REIT, which gives it exposure to current retail woes, and this might put off some investors.

Now what

Realty Income is an excellent dividend stock. At the lower price, the dividend yield is higher than 5%, which is on the high end for the REIT's dividend. It usually hovers around 4.5%.

The company pays a monthly dividend, which is an added attractive feature for shareholders who rely on passive income.

Considering Realty Income's large, global property base that's leased to established companies, there's very little risk in owning shares. Dividend investors, or any investors looking for broad diversification, can look at this price dip as a buying opportunity.