| O Stock | | | USD 62.01 0.39 0.63% |
This module uses fundamental data of Realty Income to approximate the value of its Beneish M Score. Realty Income M Score tells investors if the company management is likely to be manipulating earnings. The score is calculated using eight financial indicators that are adjusted by a specific multiplier. Please note, the M Score is a probabilistic model and cannot detect companies that manipulate their earnings with 100% accuracy. Check out
Realty Income Piotroski F Score and
Realty Income Altman Z Score analysis.
To learn how to invest in Realty Stock, please use our
How to Invest in Realty Income guide.
At this time, Realty Income's
Short and Long Term Debt Total is very stable compared to the past year. As of the 6th of October 2024,
Net Debt is likely to grow to about 22.8
B, while
Short Term Debt is likely to drop about 726.2
M. At this time, Realty Income's
PB Ratio is very stable compared to the past year. As of the 6th of October 2024,
Free Cash Flow Per Share is likely to grow to 4.38, while
Price To Sales Ratio is likely to drop 7.69.
At this time, it appears that Realty Income is an unlikely manipulator. The earnings manipulation may begin if Realty Income's top management creates an artificial sense of financial success, forcing the stock price to be traded at a high price-earnings multiple than it should be. In general, excessive earnings management by Realty Income executives may lead to removing some of the operating profits from subsequent periods to inflate earnings in the following periods. This way, the manipulation of Realty Income's earnings can lead to misrepresentations of actual financial condition, taking the otherwise loyal stakeholders on to the path of questionable ethical practices and plain fraud.
-2.48
Beneish M Score - Unlikely Manipulator
| Elasticity of Receivables | |
| Financial Leverage Condition | |
Realty Income Beneish M-Score Indicator Trends
The cure to earnings manipulation is the transparency of financial reporting. It will typically remove the temptation of the top executives to inflate earnings (i.e., to promote the idea of 'winning at any cost'). Because a healthy internal audit department can enhance transparency, the board should promote the auditors' access to all the record-keeping systems across the enterprise. For example, if Realty Income's auditors report directly to the board (not management), the managers will be reluctant to manipulate simply due to the fear of punishment. On the other hand, the auditors will be free to investigate the ledgers properly because they know that the board has their back.
Realty Income Beneish M-Score Driver Matrix
One of the toughest challenges investors face today is learning how to quickly synthesize historical
financial statements and information provided by the company, SEC reporting, and various external parties in order to detect the potential manipulation of earnings. Understanding the correlation between Realty Income's different financial indicators related to revenue, expenses, operating profit, and net earnings helps investors identify and prioritize their investing strategies towards Realty Income in a much-optimized way. Analyzing correlations between earnings drivers directly associated with dollar figures is the most effective way to find Realty Income's degree of accounting gimmicks and manipulations.
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About Realty Income Beneish M Score
M-Score is one of many grading techniques for value stocks. It was developed by Professor M. Daniel Beneish of the Kelley School of Business at Indiana University and published in 1999 under the paper titled
The Detection of Earnings Manipulation. The Beneish score is a multi-factor model that utilizes financial identifiers to compile eight variables used to classify whether a company has manipulated its reported earnings. The variables are built from the officially filed
financial statements to create a final score call 'M Score.' The score helps to identify companies that are likely to manipulate their profits if they show deteriorating gross margins, operating expenses, and leverage against growing revenue.
Realty Income Earnings Manipulation Drivers
Although earnings manipulation is typically not the result of intentional misconduct by the c-level executives, it is still a widespread practice by the senior management of public companies such as Realty Income. It is usually done by a series of misrepresentations of various accounting rules and operating activities across multiple financial cycles. The best way to spot the manipulation is to examine the historical financial statement to find inconsistencies in earning reports to find trends in assets or liabilities that are not sustainable in the future.
Realty Income ESG Sustainability
Some studies have found that companies with high sustainability scores are getting higher valuations than competitors with lower social-engagement activities. While most ESG disclosures are voluntary and do not directly affect the long term financial condition, Realty Income's sustainability indicators can be used to identify proper investment strategies using environmental, social, and governance scores that are crucial to Realty Income's managers, analysts, and investors.
About Realty Income Fundamental Analysis
The Macroaxis Fundamental Analysis modules help investors analyze Realty Income's financials across various querterly and yearly statements, indicators and fundamental ratios. We help investors to determine the real value of Realty Income using virtually all public information available. We use both quantitative as well as qualitative analysis to arrive at
the intrinsic value of Realty Income based on its fundamental data. In general, a quantitative approach, as applied to this company, focuses on analyzing
financial statements comparatively, whereas a qaualitative method uses data that is important to a company's growth but cannot be measured and presented in a numerical way.
Please read more on our
fundamental analysis page.
Pair Trading with Realty Income
One of the main advantages of trading using pair correlations is that every trade hedges away some risk. Because there are two separate transactions required, even if Realty Income position performs unexpectedly, the other equity can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Realty Income will appreciate offsetting losses from the drop in the long position's value.
The ability to find closely correlated positions to Realty Income could be a great tool in your tax-loss harvesting strategies, allowing investors a quick way to find a similar-enough asset to replace Realty Income when you sell it. If you don't do this, your portfolio allocation will be skewed against your target asset allocation. So, investors can't just sell and buy back Realty Income - that would be a violation of the tax code under the "wash sale" rule, and this is why you need to find a similar enough asset and use the proceeds from selling Realty Income to buy it.
The correlation of Realty Income is a statistical measure of how it moves in relation to other instruments. This measure is expressed in what is known as the correlation coefficient, which ranges between -1 and +1. A perfect positive correlation (i.e., a correlation coefficient of +1) implies that as Realty Income moves, either up or down, the other security will move in the same direction. Alternatively, perfect negative correlation means that if Realty Income moves in either direction, the perfectly negatively correlated security will move in the opposite direction. If the correlation is 0, the equities are not correlated; they are entirely random. A correlation greater than 0.8 is generally described as strong, whereas a correlation less than 0.5 is generally considered weak.
Correlation analysis and pair trading evaluation for Realty Income can also be used as hedging techniques within a particular sector or industry or even over random equities to generate a better risk-adjusted return on your portfolios.
Additional Information and Resources on Investing in Realty Stock
When determining whether Realty Income
offers a strong return on investment in its stock, a comprehensive analysis is essential. The process typically begins with a thorough review of Realty Income's
financial statements, including income statements, balance sheets, and cash flow statements, to assess its
financial health. Key financial ratios are used to gauge profitability, efficiency, and growth potential of Realty Income Stock.
Outlined below are crucial reports that will aid in making a well-informed decision on Realty Income Stock: Is Retail REITs space expected to grow? Or is there an opportunity to expand the business' product line in the future? Factors like these will boost
the valuation of Realty Income. If investors know Realty will grow in the future, the company's valuation will be higher. The financial industry is built on trying to define current growth potential and future valuation accurately. All the valuation information about Realty Income listed above have to be considered, but the key to understanding future value is determining which factors weigh more heavily than others.
Dividend Share | Earnings Share | Revenue Per Share | Quarterly Revenue Growth | Return On Assets |
The market value of Realty Income is measured differently than its book value, which is the value of Realty that is recorded on the company's balance sheet. Investors also form their own opinion of Realty Income's value that differs from its market value or its book value, called intrinsic value, which is Realty Income's true underlying value. Investors use various methods to calculate intrinsic value and buy a stock when its market value falls below its intrinsic value. Because Realty Income's market value can be influenced by many factors that don't directly affect Realty Income's underlying business (such as a pandemic or basic market pessimism), market value can vary widely from intrinsic value.
Please note, there is a significant difference between Realty Income's value and its price as these two are different measures arrived at by different means. Investors typically determine
if Realty Income is a good investment by looking at such factors as earnings, sales, fundamental and technical indicators, competition as well as analyst projections. However, Realty Income's price is the amount at which it trades on the open market and represents the number that a seller and buyer find agreeable to each party.