- O
- NVDA
Realty Income (NYSE: O), one of the world’s largest real estate investment trusts (REITs) with 15,500 commercial properties, has raised its dividend 136 times since its public debut. It’s also one of the few REITs that pays monthly dividends, and it pays a hefty forward yield of 6%.
What will happen if you invest $100 monthly in Realty Income for 10 years?
Over the past 10 years, <a href="https://www.fool.com/investing/how-to-invest/stocks/how-to-invest-in-realty-income-stock/?utm_source=yahoo-host-full&utm_medium=feed&utm_campaign=article&referring_guid=ce192d73-1a6c-4b13-8b51-bb8ccd5bf5fd” rel=”nofollow noopener” target=”_blank”>Realty Income generated a total return of 33% with reinvested dividends. A $12,000 investment would have grown to about $16,000.
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But if you had spread that $12,000 investment into $100 monthly investments over 10 years and reinvested your monthly dividends, your investment would be worth $21,450 today. That big gap can be attributed to the magic of dollar-cost averaging and compound returns.
Realty Income should remain a reliable dividend stock for income-oriented investors over the next ten years. But if you simply buy and forget it — instead of reinvesting and compounding your returns monthly — you’ll likely leave a lot of money on the table.
Should you buy stock in Realty Income right now?
Before you buy stock in Realty Income, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Realty Income wasn’t one of them. The 10 stocks that made the cut are built for long-term growth and could produce monster returns in the coming years.
Consider when Netflix made this list on December 17, 2004… if you invested $1,000 at the time of our recommendation, you’d have $375,240!* Or when Nvidia made this list on April 15, 2005… if you invested $1,000 at the time of our recommendation, you’d have $1,403,292!*
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