Realty Income today is a leading REIT with a diversified portfolio and high dividend yield that is attractive to income investors.
Key trends influencing the future of REITs include the growth of real estate financing (especially in Europe).
Realty Income is likely to become a much larger company by 2030, with its stock remaining a favorite for income investors.
10 Stocks We Like More Than Realty Income ›
five years ago Real estate incomehis (NYSE:O) the market capitalization was about 20 billion dollars. Today, the real estate company’s market capitalization stands at about $52 billion. The bad news, however, is that Realty Income’s stock price has declined slightly over the past five years. The increase in its market capitalization resulted from the issuance of new shares.
Should investors expect the same from this top real estate investment trust (REIT) over the rest of the decade? I don’t think so. However, this raises an important question: Where will Realty Income stock be five years from now?
Image source: Getty Images.
To gain insight into the potential direction of a company and its actions, it is essential to first understand its current position. Realty Income ranks as the sixth largest REIT in the world. The gross real estate value is approximately $61 billion.
The company owns 15,542 properties. At the end of the third quarter of 2025, its occupancy rate was 98.7%. Realty Income has 1,647 clients, with top tenants including 7-Eleven (owned by Seven and I Holdings(OTC: SVNDY)), general dollar(NYSE:DG)Walgreens, Family Dollar and Fitness for life(NYSE: LTH).
Although Realty Income owns properties in nine countries, more than 82% of total annual base rent is generated in the US, and although the REIT’s tenants represent 92 industries, nearly 80% of total rent comes from retailers.
Realty Income is also a favorite for income investors. Its dividend yield of 5.7% is attractive. Even more impressive, the company has increased its dividend for 30 consecutive years and 112 consecutive quarters.
We also need to understand the key trends that will affect Realty Income’s future in order to estimate where its stock could be in five years. Perhaps the most significant trend affecting the REIT business is that more companies will likely seek shareholder-friendly capital financing solutions.
Taking on additional debt can be problematic if interest expenses erode earnings growth. Issuing new shares dilutes the value of existing shares – something shareholders don’t like. However, capitalizing on real estate assets can provide an attractive way to raise capital without hurting shareholders.
Home financing is a popular option in the US, especially in the retail sector. However, look for the approach to gain more traction in Europe, where the total addressable market of $8.5 trillion exceeds the US market of $5.5 trillion. Additionally, momentum for REITs in the data center and gaming markets is likely to increase over the next few years.
An aging demographic is another major trend that should work in Realty Income’s favor. Older Americans often need retirement income to supplement their Social Security benefits. High-yielding dividend stocks like Realty Income offer a great alternative.
Now for the fun part. Here are five predictions for real estate income in 2030.
First, I predict that the REIT will significantly increase its number of properties. I expect Realty Income to own at least 22,000 properties in five years, up from 15,542 properties today.
Second, I think a lot of that growth will happen in Europe. I predict that in stages 25% of Realty Income’s total annualized rent in 2030 will come from European tenants, compared to less than 18% in 2025.
Third, I predict that Realty Income’s revenue growth will be primarily in the non-retail sectors. Over the next five years, I anticipate that approximately 30% of the company’s rent will be generated from sources outside the commercial space.
Fourth, I am confident that Realty Income will maintain its outstanding streak of dividend increases over the next five years. At the end of 2030, the REIT will have achieved 35 consecutive years of dividend increases.
Fifth, I predict that Realty Income’s market capitalization and share price will grow by approximately 40% over the next five years. That would raise the company’s market capitalization to about $73 billion, with the stock price above $79.
Why do I think history won’t repeat itself, with Realty Income’s market capitalization rising due to the issuance of new shares while its share price remains stagnant? First, the REIT’s establishment of an institutional private equity fund should minimize the need for dilutive equity offerings. I also expect Realty Income’s growth opportunities in Europe to provide a solid catalyst for its stock.
Will my predictions come true? Check back in five years.
Before buying shares in Real Estate Income, consider the following:
The Motley Fool Stock Advisor the analyst team has just identified what they think they are 10 best stocks for investors to buy now… and Real Estate Income was not one of them. The 10 stocks that made the cut 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 would have $504,239!* Or when Nvidia made this list on April 15, 2005… if you invested $1,000 at the time of our recommendation, you would have $1,159,896!*
Now, it’s worth noting Stock advisor the total average return is 985% — a market-crushing outperformance compared to 195% for the S&P 500. Don’t miss the latest top 10 list, available with Stock advisorand join an investor community created by individual investors for individual investors.
See the 10 stocks »
*The stock advisor returns as of December 22, 2025
Keith Speights has positions in Realty Income. The Motley Fool has positions and recommends Realty Income. The Motley Fool has a disclosure policy.
Where will the real estate income stock be in 5 years? was originally published by The Motley Fool
