Realty Income Profitability Analysis

O Stock  USD 55.75  0.75  1.36%   
Based on the measurements of profitability obtained from Realty Income's financial statements, Realty Income's profitability may be sliding down. It has an above-average probability of reporting lower numbers next quarter. Profitability indicators assess Realty Income's ability to earn profits and add value for shareholders.
 
Net Income  
First Reported
1994-09-30
Previous Quarter
218.4 M
Current Value
132.3 M
Quarterly Volatility
57.2 M
 
Dot-com Bubble
 
Housing Crash
 
Credit Downgrade
 
Yuan Drop
 
Covid
At this time, Realty Income's Days Sales Outstanding is very stable compared to the past year. As of the 14th of July 2024, Sales General And Administrative To Revenue is likely to grow to 0.06, while Price To Sales Ratio is likely to drop 7.69. At this time, Realty Income's Non Operating Income Net Other is very stable compared to the past year. As of the 14th of July 2024, Interest Income is likely to grow to about 77.1 M, while Total Other Income Expense Net is likely to drop (58.6 M).
Current ValueLast YearChange From Last Year 10 Year Trend
Gross Profit Margin1.050.9223
Fairly Up
Very volatile
Net Profit Margin0.20.2139
Notably Down
Slightly volatile
Operating Profit Margin0.640.4229
Way Up
Slightly volatile
Pretax Profit Margin0.360.2277
Way Up
Slightly volatile
Return On Assets0.01430.0151
Notably Down
Slightly volatile
Return On Equity0.02520.0265
Notably Down
Slightly volatile
For Realty Income profitability analysis, we use financial ratios and fundamental drivers that measure the ability of Realty Income to generate income relative to revenue, assets, operating costs, and current equity. These fundamental indicators attest to how well Realty Income Corp utilizes its assets to generate profit and value for its shareholders. The profitability module also shows relationships between Realty Income's most relevant fundamental drivers. It provides multiple suggestions of what could affect the performance of Realty Income Corp over time as well as its relative position and ranking within its peers.
  

Realty Income's Revenue Breakdown by Earning Segment

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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.
Quarterly Earnings Growth
(0.54)
Dividend Share
3.071
Earnings Share
1.08
Revenue Per Share
5.973
Quarterly Revenue Growth
0.333
The market value of Realty Income Corp 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.

Realty Income Corp Return On Asset vs. Return On Equity Fundamental Analysis

Comparative valuation techniques use various fundamental indicators to help in determining Realty Income's current stock value. Our valuation model uses many indicators to compare Realty Income value to that of its competitors to determine the firm's financial worth.
Realty Income Corp is rated below average in return on equity category among its peers. It also is rated below average in return on asset category among its peers reporting about  0.86  of Return On Asset per Return On Equity. The ratio of Return On Equity to Return On Asset for Realty Income Corp is roughly  1.16 . At this time, Realty Income's Return On Equity is very stable compared to the past year. The reason why the comparable model can be used in almost all circumstances is due to the vast number of multiples that can be utilized, such as the price-to-earnings (P/E), price-to-book (P/B), price-to-sales (P/S), price-to-cash flow (P/CF), and many others. The P/E ratio is the most commonly used of these ratios because it focuses on the Realty Income's earnings, one of the primary drivers of an investment's value.

Realty Return On Asset vs. Return On Equity

Return on Equity or ROE tells company stockholders how effectually their money is being utilized or reinvested. It is a useful ratio when analyzing company profitability or the management effectiveness given the capital invested by the shareholders. ROE shows how efficiently a company utilizes investments to generate income.

Realty Income

Return On Equity

 = 

Net Income

Total Equity

 = 
0.0228
For most industries, Return on Equity between 10% and 30% are considered desirable to provide dividends to owners and have funds for the future growth of the company. Investors should be very careful using ROE as the only efficiency indicator because ROE can be high if a company is heavily leveraged.
Return on Asset or ROA shows how effective is the management of the company in generating income from utilizing all of the assets at their disposal. It is a useful ratio to evaluate the performance of different departments of a company as well as to understand management performance over time.

Realty Income

Return On Asset

 = 

Net Income

Total Assets

 = 
0.0197
Return on Asset measures overall efficiency of a company in generating profits from its total assets. It is expressed as the percentage of profits earned per dollar of Asset. A low ROA typically means that a company is asset-intensive and therefore will needs more money to continue generating revenue in the future.

Realty Return On Asset Comparison

Realty Income is currently under evaluation in return on asset category among its peers.

Realty Income Profitability Projections

The most important aspect of a successful company is its ability to generate a profit. For investors in Realty Income, profitability is also one of the essential criteria for including it into their portfolios because, without profit, Realty Income will eventually generate negative long term returns. The profitability progress is the general direction of Realty Income's change in net profit over the period of time. It can combine multiple indicators of Realty Income, where stable trends show no significant progress. An accelerating trend is seen as positive, while a decreasing one is unfavorable. A rising trend means that profits are rising, and operational efficiency may be rising as well. A decreasing trend is a sign of poor performance and may indicate upcoming losses.
Last ReportedProjected for Next Year
Accumulated Other Comprehensive Income73.9 M77.6 M
Operating Income1.7 B1.8 B
Net Income876.9 M920.8 M
Income Tax Expense52 M54.6 M
Income Before Tax928.9 M975.4 M
Total Other Income Expense Net-55.8 M-58.6 M
Net Income Applicable To Common Shares872.3 M915.9 M
Net Income From Continuing Ops876.9 M442.1 M
Net Interest Income-737.6 M-700.7 M
Non Operating Income Net Other146.5 M153.8 M
Interest Income73.5 M77.1 M
Change To Netincome134.4 M141.1 M
Net Income Per Share 1.26  0.89 
Income Quality 3.37  3.54 
Net Income Per E B T 0.94  1.13 

Realty Profitability Driver Comparison

Profitability drivers are factors that can directly affect your investment outlook on Realty Income. Investors often realize that things won't turn out the way they predict. There are maybe way too many unforeseen events and contingencies during the holding period of Realty Income position where the market behavior may be hard to predict, tax policy changes, gold or oil price hikes, calamities change, and many others. The question is, are you prepared for these unexpected events? Although some of these situations are obviously beyond your control, you can still follow the important profit indicators to know where you should focus on when things like this occur. Below are some of the Realty Income's important profitability drivers and their relationship over time.

Realty Income Profitability Trends

Realty Income profitability trend refers to the progression of profit or loss within a business. An upward trend means that Realty Income's profit has generally increased over time, and a downward profitability trend means profits are declining. Recognizing problems early in profitability trends allows investors to address revenue and cost issues in advance. Investors and analysts usually monitor three types of profitability trends: gross, operating, and net. Gross profit is the difference between revenue and costs of goods sold. Operating profit is Realty Income's gross profit minus its overhead. After you account for other unusual revenue, expenses, and costs, you get net profit. Gross profit trends are often a good indicator of future profitability. If you have high gross profit margins, you have a better chance to cover overhead and make money.

Realty Income Profitability Drivers Correlations

One of the toughest challenges investors face today is learning how to quickly synthesize and read into endless financial statements and information provided by the company, SEC reporting, and various external parties. Understanding the correlation between Realty Income different financial indicators related to revenue and profit generation helps investors identify and prioritize their investing strategies towards Realty Income in a much-optimized way. Analyzing correlations between profit drivers that are directly associated with dollar figures is the most effective way to break down Realty Income's future profitability.

Use Realty Income in pair-trading

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.

Realty Income Pair Trading

Realty Income Corp Pair Trading Analysis

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 Corp 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 Corp 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.
Pair CorrelationCorrelation Matching

Use Investing Themes to Complement your Realty Income position

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Technology Theme
Companies that are involved in development or distribution of technologically based goods and services such as software, IT or electronics. The Technology theme has 30 constituents at this time.
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Additional Information and Resources on Investing in Realty Stock

When determining whether Realty Income Corp 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 Corp Stock. Outlined below are crucial reports that will aid in making a well-informed decision on Realty Income Corp Stock:
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You can also try the Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
To fully project Realty Income's future profitability, investors should examine all historical financial statements. These statements provide investors with a comprehensive snapshot of the financial position of Realty Income Corp at a specified time, usually calculated after every quarter, six months, or one year. Three primary documents fall into the category of financial statements. These documents include Realty Income's income statement, its balance sheet, and the statement of cash flows.
Potential Realty Income investors and stakeholders can use historical trends found within financial statements to determine how well the company is positioned for the future. Although Realty Income investors may work on each financial statement separately, they are all related. The changes in Realty Income's assets and liabilities, for example, are also reflected in the revenues and expenses that we see on Realty Income's income statement, which results in the company's gains or losses. Cash flows can provide more information regarding cash listed on a balance sheet but not equivalent to net income shown on the income statement. Please read more on our technical analysis and fundamental analysis pages.