Treasuries Yield 4.75%—Does Realty Income’s Monthly Dividend Still Make Sense?
With the risk-free rate sitting near its highest level in years, Realty Income's legendary monthly dividend streak now faces a pressure test that even 674 consecutive payments cannot automatically survive.
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Realty Income (NYSE:O | O Price Prediction) is set to pay shareholders again. The self-styled Monthly Dividend Company is distributing $0.271 per share on September 15, 2026, its 674th consecutive monthly dividend. That streak, combined with 115 consecutive quarterly increases and 133 total hikes since its 1994 NYSE listing, is the résumé investors buy into. The question for a scorecard: does the payout still deserve top marks with the 10-year Treasury at 4.75%?
Latest Payment and Yield Check
The September check works out to an annualized forward dividend of $3.252, up in small monthly steps from $0.2695 as recently as October 2025. At a share price of $61.56, that pencils out to a 5.03% yield. Against a 4.75% risk-free rate, the income premium is just 28 basis points. Historically, O has offered a wider cushion, and that compression is the single biggest reason its grade is under pressure.
AFFO Backs the Payout
GAAP optics look ugly: Q2 EPS of $0.37 missed the $0.42 estimate, and full-year net income guidance of $1.59 to $1.60 sits well below the dividend. For a REIT, though, AFFO is the right yardstick. AFFO per share grew 3.8% to $1.09 in Q2, and management raised the full-year midpoint to $4.44 to $4.45. That puts the AFFO payout ratio near 73%, leaving comfortable coverage and reinvestment capacity.
Portfolio and Balance Sheet Backing the Check
The underlying real estate is doing its job. Portfolio occupancy stood at 98.8%, and 482 released units generated a blended rent recapture of 102.7%, with international recapture at 112.9%. Investment-grade tenants now account for 34% of annualized rent, up from 32% in Q1. On the balance sheet, net debt to EBITDAre sits at 5.4x, Fitch initiated with an A long-term issuer rating, and pro forma liquidity climbed to more than $5.7 billion. A $6 billion hyperscale data center joint venture with Cloud Capital adds a growth vector that pure retail net-lease peers cannot match.
Final Grade
Grading on coverage, streak, portfolio quality, and credit, Realty Income still earns an A. Grading on relative yield, the picture softens: shares are up 12.67% year to date, which has trimmed the spread over Treasuries to a thin margin flagged in Barron’s recent look at the risks of the monthly income craze. Net grade: A-minus. Investors should watch cap rate trends and whether AFFO growth reaccelerates above 4% to justify paying up for the streak. If O’s thinner spread has you shopping the rest of the every-30-days aisle, we lined up seven of our favorite monthly payers in a free report: here.
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Chris Lange is a writer for 24/7 Wall St., based in Houston. He has covered financial markets over the past decade with an emphasis on healthcare, tech, and IPOs. During this time, he has published thousands of articles with insightful analysis across these complex fields. Currently, Lange's focus is on military and geopolitical topics. Lange's work has been quoted or mentioned in Forbes, The New York Times, Business Insider, USA Today, MSN, Yahoo, The Verge, Vice, The Intelligencer, Quartz, Nasdaq, The Motley Fool, Fox Business, International Business Times, The Street, Seeking Alpha, Barron’s, Benzinga, and many other major publications. A graduate of Southwestern University in Georgetown, Texas, Lange majored in business with a particular focus on investments. He has previous experience in the banking industry and startups.
