If there was ever a moment to believe in the market's resilience, now's a good one. After dropping into what looked like it might become a bear market, the S&P 500 has slowly inched up, despite the continued potential threat of the new tariff program.
That doesn't mean another crash isn't coming, or that there won't be any negative effect. Because the nature of the market is that there are no guarantees either way, it's important that no matter what your investing type is, you're invested in some safe stocks.
If you're looking for a good one, Realty Income(NYSE: O) is one of the best. No matter what's happening in the market, it pays a high-yielding and growing dividend. Its model is also tariff-resistant, making it even more attractive under current circumstances. Here's why it's a no-brainer dividend stock to own, and how much money you can expect to make in passive income from owning it.
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The retail REIT leader
Realty Income is a real estate investment trust (REIT) focused on the retail industry. It owns about 15,600 properties globally, and it has lots of available cash and credit to keep buying more, as well as a strong pipeline of new properties that fit its standards.
Until recently, Realty Income was mostly focused on the U.S. and on essentials retailers. Those are still its core leanings, but the company has expanded into new regions and industries. Atlhough 80% of its properties are in retail, more than 14% are in industrials. The U.K. has become one of its largest regions, accounting for more than 11% of properties, with EG Group, a British retail company, as its fifth-largest tenant.
Grocery stores and convenience stores, its two largest categories, together account for more than 20% of properties. Its top three clients are 7-Eleven, Dollar General , and Walgreens, which together account for about 10% of the total.
A tariff-resistant model
The focus on large, established retail chains provides security when times are rough. These companies, including names like Walmart and Home Depot, are likely to pay the rent even if their own businesses are under pressure, and they thrive in good conditions. If tariffs make it more expensive for customers to shop, shoppers are still going to buy things like groceries.
There's more, though. Interest rates have started to come down, and that means it's easier for Realty Income to build up its credit and buy more properties, both in the U.S. and globally. It has estimated the global addressable market at $14 trillion, and it sourced $43 billion in opportunities in 2024. Realty Income grows in two ways: Buying properties and acquiring smaller REITs. It needs loads of capital for both, and cheaper capital means more purchases, better rates, and growth despite tariff concerns.
Finally, since it's a global company, it has shifted some of its exposure to U.S. economic trends.
54 years of monthly dividends
Realty Income has paid a monthly dividend for more than 54 years, from before it became a public company in 1994. That's 658 months of consecutive monthly dividends, an unbeatable track record, partly unbeatable because there are few companies that pay a monthly dividend at all. The company has raised the dividend for 110 quarters consecutively as well.
Realty Income's dividend typically yields around 5%, which is more than three times the average S&P 500 dividend yield. These days, with a suppressed real estate market, Realty Income's stock price has declined, and the dividend yields 5.6% at the current price. If you would invest $18,000 in Realty Income stock today, you would get $1,000 in annual dividends paid monthly this year, and that would grow over time as the dividend increases.
An investment in Realty Income stock is a secure passive income stream that should hold steady through challenging economic circumstances, including tariff changes.
Should you invest $1,000 in Realty Income right now?
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Jennifer Saibil has positions in Walmart. The Motley Fool has positions in and recommends Home Depot, Realty Income, and Walmart. The Motley Fool has a disclosure policy.
