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A free report on O (dated 01-12-06) is available from Morningstar at this link:


The above message doesn't do the link justice - however I recommended it (thanks David!) as the report on O is very much worth reading, particularly if you were new to it. It probably would have saved me over 1000 bucks and some sleepless nights if I had read this a year or two ago when I first started with O (take a look at the 2 year chart to see the "heart attack" dips that scared me out at a loss the first time).

Had I have had this report, I would have been much more calm and probably saved some money, or even bought more for better profit.

In any case, I couldn't help notice that they claim the debt load on O is in the 24% range, but Yahoo claims much more. I'm not sure why the discrepancy exists, except perhaps the report is old (1yr, 6mo or so). O used to have less debt but it has recently increased. Still this report gives you good reason not to worry. A quote if I may...

"As a result, Realty Income's cash flows are extremely steady and largely unaffected by movements in interest rates." (p.1)

I also learned what "Crest Net" is. It is a way for O to sell off properties it doesn't want, but rather than have a fire sale, it has a business specifically oriented to reselling at a profit.

I learned that they often buy properties in bulk (thus getting a discount), and it would make sense that some might not be the best material for a lease, thus it would make sense to sell it. I feel much better now about what Crest Net is and does. I always found O's explanation sketchy about what Crest Net is and what it does.

I also learned where the dividend increases come from:
"The firm's long-term leases--the majority of which contain built-in rent bumps--ensure a steadily rising monthly dividend." (p.2)

To complement Morningstar, I must say this is an excellent report. It makes me want to join thier report service. To anyone considering O, or if you feel you want to understand it better, I highly recommend reading the above report. Note - they aren't kidding when the tell you to turn off the pop-up blocker, you must turn off your blocker (often on by default in IE) before clicking the link.

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