Where Will Realty Income Stock Be in 5 Years?

• Realty Income has importantly diversified its level implicit the past 5 years.

• It volition apt proceed its diversification successful the coming years.

• The REIT could besides person a overmuch bigger backstage superior absorption platform.

• 10 stocks we similar amended than Realty Income ›

Realty Income (NYSE: O) has evolved implicit the years. The existent property concern spot (REIT) has grown from its instauration of investing successful freestanding U.S. retail properties secured by semipermanent net leases to go a overmuch much diversified platform. It has steadily expanded into caller concern verticals, importantly expanding its full addressable marketplace opportunity.

The starring planetary REIT could look rather antithetic successful 2030. Here's wherever Realty Income appears to beryllium heading implicit the adjacent 5 years.

Five years ago, Realty Income chiefly invested successful freestanding retail and concern properties crossed the U.S. and U.K. It has since expanded into 7 different European countries, added gaming and data centers to its portfolio, and started making recognition investments (real estate-backed loans and preferred equity).

These caller investments person importantly diversified the REIT's portfolio. Today, it owns much than 15,500 properties leased to implicit 1,600 clients successful 9 countries. It has a well-diversified portfolio by spot type, geography, client, and tenant industry:

Image source: Realty Income Investor Presentation.

The company's accrued diversification has lowered its hazard profile, expanded its full addressable marketplace opportunity, and enhanced its concern flexibility. Realty Income's enlargement into Europe has opened the doors to an estimated $8.5 trillion concern opportunity. Meanwhile, caller investments successful information centers and gaming properties added a $900 cardinal concern opportunity. Add in the U.S. freestanding retail and concern spot concern markets, and Realty Income has a $14 trillion full addressable marketplace opportunity.

The company's expanding diversification has given it more concern flexibility. It tin absorption connected investing successful spot types oregon markets wherever it sees the champion returns. For example, during the 3rd quarter, it closed $1 cardinal of the investments successful Europe (compared to $380 cardinal successful the U.S.). It focused connected planetary investments due to the fact that they offered overmuch higher returns (8% archetypal weighted mean currency output versus 7% for U.S. investments).

Realty Income spent the past 5 years diversifying its level by geography and spot type. The REIT will apt continue to diversify its portfolio implicit the adjacent 5 years.