We recently published a list of the 15 Best High-Yield Dividend Stocks for 2025 and Beyond. In this article, we are going to take a look at where Realty Income Corporation (NYSE:O) stands against other best high-yield dividend stocks.
Over the years, dividend-paying stocks have become increasingly popular as investors lean toward income-focused investment strategies. Many conservative investors have committed hundreds of billions of dollars across numerous funds based on the belief that companies with a consistent track record of raising dividends tend to deliver the strongest long-term market performance.
According to Ed Clissold of Ned Davis Research, over 80% of companies in the broader market currently pay dividends, and 324 of them have either initiated or increased their payouts over the past year. Interestingly, it was earlier research by Clissold’s firm that helped spark the widespread interest in dividend-growing stocks. That study, based on an older return calculation method that has since been widely replicated, highlighted the strong performance of companies that regularly increased their dividends.
However, as the firm has updated its methods to align with changes in the industry, the findings suggest that while dividend growers have performed well, focusing on high-yielding dividend stocks may be even more rewarding. This yield-based strategy has outperformed dividend growers in both rising and falling markets since 1973. Financial advisers suggest that investors start by examining a stock’s dividend yield, which is determined by dividing the annual dividend by the stock’s current price. This figure indicates the income an investor earns for every dollar put into the stock.
However, high dividend yield tends to come with higher volatility and more frequent portfolio turnover. It isn’t always a positive sign. It can sometimes signal trouble, especially if it’s driven by a drop in the stock’s price. In these situations, there’s a risk that the company may reduce its dividend payments—something that often happens during periods of financial strain. Advisers emphasize the need to go beyond surface-level metrics and examine a company’s core financials to assess its overall stability and strength. Jason Alonzo, managing director at Harbor Capital Advisors, made the following comment about investing in dividend stocks:
“Make sure the company has a strong balance sheet and its prospects for earnings-per-share growth are strong, so the company is well-positioned to maintain dividend payments in the future even if there is a recession.”
While the debate between dividend growth and high yield continues, analysts emphasize that dividend-paying stocks are not all created equal. Stocks that offer a solid yield along with steady dividend increases often reflect strong fundamentals, as they suggest the company can reward shareholders while still investing in future growth. The dividend payout ratio plays a critical role in assessing a company’s flexibility with its dividend policy. Firms that use nearly all of their earnings to cover dividends—or barely earn enough to sustain them—might face challenges, especially when under competitive pressure, due to limited cash flow for operational support.
An expansive outdoor view of a skyline backed by residential complex, symbolizing the company’s real estate solutions.
Our Methodology:
For this article, we used a screener to identify dividend companies with above-average dividend yields. From there, we picked companies that have raised their payouts for at least 10 consecutive years, which shows their long-term growth. Finally, we picked 15 stocks with the highest dividend yields, as of May 9, and ranked them accordingly.
At Insider Monkey, we are obsessed with hedge funds. Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
Realty Income Corporation (NYSE:O)
Dividend Yield as of May 9: 5.68%
An American real estate investment trust company, Realty Income Corporation (NYSE:O) invests in single-tenant commercial properties across the US. The company acquires a large number of properties and leases them to various businesses, sharing the rental income with its investors. While real estate investment trusts (REITs) can face challenges if they rely too heavily on one tenant or operate in a weak sector, Realty has minimized that risk by leasing its 15,621 properties to 1,565 clients across more than 89 different industries. This broad diversification—further strengthened by last year’s merger with Spirit Realty Capital—helps protect the company from the impact of economic slowdowns.
In the first quarter of 2025, Realty Income Corporation (NYSE:O) reported revenue of $$1.3 billion, which showed an 8.6% growth from the same period last year. The revenue also exceeded analysts’ estimates by $15.2 million. For the quarter, the company reported net income available to common stockholders of $249.8 million, translating to $0.28 per share. Adjusted Funds from Operations (AFFO) per share rose 2.9% year-over-year to $1.06. During the period, the company invested $1.4 billion at an initial weighted average cash yield of 7.5% and achieved a rent recapture rate of 103.9% on re-leased properties.
Realty Income Corporation (NYSE:O) is one of the best dividend stocks on our list as the company pays monthly dividends to shareholders. In March 2025, it marked its 110th consecutive quarterly dividend increase—its 130th increase overall since being listed on the New York Stock Exchange in 1994. It currently pays a monthly dividend of $0.2685 per share for a dividend yield of 5.68%, as of May 9.
Overall, O ranks 4th on our list of the best high yield dividend stocks. While we acknowledge the potential of O as an investment, our conviction lies in the belief that some deeply undervalued dividend stocks hold greater promise for delivering higher returns, and doing so within a shorter time frame. If you are looking for a deeply undervalued dividend stock that is more promising than O but that trades at 10 times its earnings and grows its earnings at double digit rates annually, check out our report about the dirt cheap dividend stock.
READ NEXT: 20 Best AI Stocks To Buy Now and 30 Best Stocks to Buy Now According to Billionaires.
Disclosure: None. This article is originally published at Insider Monkey.
