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Realty Income declares its 73rd dividend increase, so why the stock fell?

Realty Income
We are pleased that our Board of Directors have once again determined that we are able to increase the amount of the monthly dividend we pay to our shareholders. With the payment of the October dividend, we will have made 519 consecutive monthly dividend payments and paid over $2.6 billion in dividends throughout our 44-year operating history.”

This was the announcement from a new CEO John P. Case today morning. Realty Income is once again proving that the management is shareholder friendly and dedicated to be a company retired investors can rely on.

So if the company increased its dividend payout, why the heck it fell today by 1.13%? Shouldn’t investors be celebrating this move and cheering up in joy? This great company will be paying you more income and first pay day will be in October 2013.

It is hard to find out why investors are buying or dumping stocks. Many times you will be dealing with irrational behavior at the edge of idiocy but today the reason was obvious.

Although the company continues in its great dividend policy of long term monthly paying dividends it appears this increase disappointed investors.

The company increased its new annual dividend from $2.179 a share to $2.182 a share. It is only a 0.14% increase. On annual basis this encrease doesn’t keep up with inflation and in my opinion this was a disappointment to investors who seek not only a stable dividend income, but also an income which will be increasing annually at least at the same pace as inflation and ideally better than that.

I am fine with this company and I will continue investing in it. The reason is that I am still in accumulation phase and strictly reinvest all dividends buying shares of other stocks and Realty income is a great help paying me monthly dividend which can be reused right away. This would speed up my accumulation process.

The next reason is that I still have circa 20 years of investing in front of me and this lackluster increase doesn’t bother me as long as it doesn’t become a standard. As I will be approaching closer to my retirement age, I would grow cautious with a dividend growth like this. Today I get the dividends and reinvest them (mostly into companies which have a better record), but I also actively use (or started using) Realty Income options trading to boost my income from this stock.

About the Company

Realty Income, The Monthly Dividend Company┬«, is a New York Stock Exchange real estate company dedicated to providing shareholders with dependable monthly income. To date the company has declared 519 consecutive common stock monthly dividends throughout its 44-year operating history and increased the dividend 73 times since Realty Income’s listing on the New York Stock Exchange in 1994. The monthly income is supported by the cash flow from over 3,600 properties owned under long-term lease agreements with regional and national retail chains and other commercial enterprises. The company is an active buyer of net-leased properties nationwide. Additional information about the company can be obtained from the corporate website at www.realtyincome.com or www.twitter.com/realtyincome.

2 responses to “Realty Income declares its 73rd dividend increase, so why the stock fell?”

  1. JC says:

    Well they did increase 19% earlier this year so investors from earlier are still way ahead. I expect the annual increases to be of the 2-5% variety averaging out to at least track inflation. Ill take an increase anytime though. Good to see.

    • Martin says:

      That’s true. i missed that one. I thought it was last year. With that today’s drop is another freak investors dumping the sotck. So let’s buy more… right?

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