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RISK CONCERN
Investment Strategy, Risk Analysis, and Insights by Chartered Professionals
Realty Income Corporation (XNYS:O) In-Depth Stock/Fundamental/Options Analysis Today
Primary Facts
O
Name:
REALTY INCOME CORPORATION (XNYS:O)
Sector:
-
Industry:
REIT�Retail
CEO:
Mr. Sumit Roy
Total Employees:
367
Our Technological Advancement Rating
Our Rating:
B
Technological advancement compared to industry is -15.50% lower
ANALYSIS OF ALL CRITICAL FACTORS & RISKS RELATED TO THE STOCK & FUNDAMENTAL/LONG-TERM ANALYSIS OF REALTY INCOME CORPORATION(O) AS PER DATA ANALYSIS OF LAST 3 YEARS AND COMPARISON WITH COMPETITORS/PEERS, AND REIT�RETAIL INDUSTRY. DATE: 07/09/2022
Primary Targets/Price Insights
Previous Close ($) :
67.69
One Month Price Target:
$67.97
Six Month Price Target :
$69.35
Likely Price in One Year's Time:
Ticker:
$71.
Likely Trading Range Today Under (Normal Volatility)
$67.42
Price Upper limit ($) :
$67.98
Price Lower limit ($) :
Crash Risk Prep/Key Price Levels (High Volatility/Risk)
Price, as per data analysis, isn't likely to fall below:
Today:
$64.33
This week:
$60.17
This month :
$52.65
Other Primary facts
Market Cap:
41.84B
Market Cap Classification:
Large Cap
Number of Shares
IPO Date:
617.58M
Best/Worst Daily Performance (Last 3+ Years)
Highest Daily Appreciation:
16.91%
-24.93%
Worst Daily Decline:
Our Options Trading Entry Points
Iron Condor entry points for options expiring in 1 week's time
Low risk (<2%) entry points
Buy Call:
Sell Call:
Buy Put:
Sell Put:
$83.30
$76.18
$52.08
$59.20
Medium risk (<10%) entry points
Buy Call
Sell Call
$73.86
Buy Put:
Sell Put:
$72.34
$61.50
$63.04
These entry points can be used for other strategies, such as butterflies, straddles, etc.
Risk-Adjusted returns (Sharpe Ratio) of
O
Sharpe Ratio:
0.32%
Comparison:
O, is amongst the top 40% stocks with lowest risk-adjusted returns
Sharpe ratio is -68.94% lower than the industry
& is -85.85% lower than the market/S&P 500 average
Average Returns/Yield of
O
Daily returns:
0.02%
Weekly returns:
0.08%
Monthly returns:
0.33%
Yearly returns:
8.74%
Comparison of returns:
Average annual returns/yield (last 3 years) is -54.19% below industry average
Classification:
O, is amongst the top 40% lowest yielding stocks in terms of daily returns
Results of T-Test of Returns:
0.46
Statistical test of Returns:
O has yielded returns statistically similar to the market
Volatility (measured by Standard Deviation)
Daily Volatility:
2.43%
Weekly Volatility:
5.43%
Monthly Volatility:
10.86%
Yearly Volatility:
37.61%
Volitlilty of last five days (Measured by Standard Deviation)
Average Volatility of this Week:
0.75%
Volatility in last five trading days has been -69.31% below long-term volatility
Value at Risk Analysis (VaR)
Daily VaR:
-4.97%
Weekly VaR:
-11.11%
Monthly VaR:
-22.22%
How Much Can the price of
O
Decline in a Recession?
Likely price decline in a recession:
Base case (decline):
-19%
Worst case (decline):
-76.98%
This translates to price declining to:
$54.52
This translates to price declining to:
$15.58
Severe Crash Probability
Risk of crash in next 6/12 months: Medium (<50%)
What is Value at Risk (VaR)?
Risk Fundamentals
O is a 56.84% riskier investment compared to the market/S&P 500 & is 34.36% riskier than Nasdaq (IXIC)
Risk (measured by volatility) is -17.97% below industry average
Overall, it is amongst the top 50% most risky stocks
Beta Examination of
O
Beta in relation to market/S&P 500--0.73
Expected beta in 1 year's time:
0.434
Expected beta in 3 year's time:
0.613
Unlevered (debt free) Beta:
0.424
Beta in relation to Nasdaq (XNAS):
0.692
Beta in relation to all global stocks::
0.907
Beta Comparison & Analysis
Beta of competitors/peers::
0.997
Beta is -26.89% lower than peers
Average Industry Beta:
1.101
Beta is -33.81% below industry average
Sustainable Growth Rate Analysis
Sustainable growth rate for this stock/firm:
-
-
Alpha provided | Alpha Analysis
Alpha provided:
-0.041
Alpha is 111.87% above industry average alpha yield
Alpha is -263% below the market average
Analysis of Cost of Capital of
O
Equity cost of capital:
0.081
Equity cost of capital is -23.85% below industry mean WACC
Unlevered (without debt) cost of capital:
4.74%
Before-tax cost of debt:
-
After-tax cost of debt:
-
Overall debt rating:
-
Weighted average cost of capital (WACC):
-
-
Key Per-Share Metrics & Analysis
Revenue per share:
$3.96
Revenue growth rate per share of (3Y):
1.63
Annual revenue growth rate is -414.81% below industry average
EPS:
$1.02
Expected Annual growth rate of EPS (3Y):
-14.25%
Expected future EPS growth rate is -1025.38% lower than the REIT�Retail industry
Free cash flow (FCF) per share:
$1.74
Balance sheet equity growth per share: 28.81%
Equity growth rate per share is -237.60% lower than the industry
Debt per share
$0.00
EBITDA per share
$3.03
Valuation Analysis Today of
O
P/E Ratio:
63.95
P/E Ratio of Competitors/Peers:
42.43
P/E ratio is 50.73% higher than main peers & is 34.02% higher than the industry
Stock price/value with industry average P/E ratio: $48.67
O is 39.07% overvalued if valued using industry average P/E ratio
Share value as per dividend discount (DDM) model: $25.95
Present value of the expected future dividends only: $12.97
P/S (Price to Sales ratio):
17.1
Price to sales ratio is 78.14% above the industry mean
P/B (Price to book value ratio):
1.63
Price to free cash flow: 38.96
Price to free cash flow ratio is 3.68% higher than the industry
Net income growth rate (3Y):
-17.05%
Net income growth rate is 28.05% higher than the average industry net income growth rate
Dividend Analysis
Dividend payout rate: 0.00%
Dividend yeild: 1.46%
Previous Dividend: $0.25
Previous adjusted dividend: $0.25
Previous Dividend: $0.99
Expected next dividend best case: $0.25
Expected next dividend worst case: $0.24
Average dividend payment (long-term): $0.24
Average dividend increase/decrease (growth rate) % per period: 0.48%
Expected next dividend payment date: 13/10/2022
Expected next dividend record date: 29/09/2022
Expected next dividend declaration date: 09/12/2022
Previous dividend payment date: 15/07/2022
Previous dividend record date: 07/01/2022
Previous dividend declaration date: 14/06/2022
Dividend History:
2022-06-30--$0.25
2022-04-29--$0.25
2022-02-28--$0.25
2022-05-31--$0.25
2022-03-31--$0.25
2022-01-31--$0.25
Dividend growth rate is -96.97% lower than the industry average
In-depth Debt & Leverage Analysis
Debt to equity ratio:
77.55%
Net debt to equity ratio:
-0.59%
Debt to assets ratio:
43.62%
Net debt to assets ratio:
-0.34%
Debt-to-asset ratio is -20.26% below industry average
Ability to repay debt:
Interest coverage ratio:
7.49
Interest coverage ratio is 149.87% more than industry average
Looking forward:
Debt growth rate:
78.00%
Annual debt growth is 6139% higher than industry average debt growth rate
-
Analysis of Key Statistics
Correlation of price movement with the market:
0.643
Statistical significance of correlation:
O has a statistically significant correlation with the market
Average Correlation of the industry with the market:
0.511
Stock price is 25.80% more correlated with the market, compared to the industry average correlation
R Squared (percentage of price movement explained by movement of the market):
0.511
Correlation of price movement with Nasdaq (^IXIC):
0.044
Covariance of price movement with the market:
0.062
Kurtosis
32.466
Returns have severe fat-tails (leptokurtic), i.e., returns considerably higher or lower than the mean returns are considerably more likely, compared to assets with normally distributed returns
Skewness of returns:
-2.14
Returns are left (negative) skewed; mean returns are lower than median and mode returns
Fundamental Analysis & Dupont Analysis of
O
Gross Profit Margin Ratio:
380%
Operating Profit Margin Ratio:
61.54%
Operating profit margin is 100.39% higher than the industry
Net Profit Margin Ratio:
380%
Effective Tax Rate:
7.27%
Effective tax rate is 1.39% higher than the industry
Dupont Method
Net Profit Margin
Return on Equity Ratio (ROE):
×
ROA
=
×
1.82%
Return on equity (ROE) is -84.50% lower than the industry
Financial Leverage
Asset Turnover Ratio (ROA):
1.05%
Return on assets (ROA) is -64.59% lower than the industry
Financial Leverage:
1.8x
Current Ratio:
2.03
Current ratio is -95.18% below industry average
Cash Conversion Cycle (days):
-826.8
Cash conversion cycle is -491.54% below industry average
The remaining useful life of property plant & equipment is: 15.8 years
Stock based compensation to net income ratio:
-
In-depth Efficiency Analysis
Revenue generated per employee:
6.7M
Each employee generates 77% more revenue than industry average revenue per employee
EBITDA generated per employee:
5.1M
Each employee generates 60% more EBITDA than industry average revenue per employee
Profit generated per employee:
1.3M
Each employee generates 0% less net income/profit than industry average revenue per employee
Free cash flow (FCF) generated per employee:
0.0K
-
Assets/Capital per employee
10.3M
-
Research & Development (R&D) Analysis
-
-
Competitors/Peer firms of
O
WELLTOWER INC. (XNYS:WELL)
DIGITAL REALTY TRUST, INC. (XNYS:DLR)
CBRE GROUP, INC. (XNYS:CBRE)
EQUITY RESIDENTIAL (XNYS:EQR)
ALEXANDRIA REAL ESTATE EQUITIES, INC. (XNYS:ARE)
WEYERHAEUSER COMPANY (XNYS:WY)
NRZ-PC
EXTRA SPACE STORAGE INC. (XNYS:EXR)
SIMON PROPERTY GROUP, INC. (XNYS:SPG)
Current Analyst Ratings
Strong buy�13%
Buy�4%
Hold�50%
Sell�8%
Strong sell�4%
Overall analyst sentiment is: Hold
Income Statement
Period:
TTM
Date:
3/31/22
Revenue:
2.45B
Cost of Revenue:
Gross Profit:
R&D Expense
General & Admin Expenses:
Selling, General & Admin Expenses
Sales and Marketing Expenses
Other Expenses :
Operating Expenses :
Cost & Expenses :
Interest Income:
Interest Expenses:
Depreciation & Amortization:
EBITDA:
Operating Income:
Other Income Expenses:
Income Before Tax:
Income Tax Expense:
Net Income:
Balance Sheet
Date:
Calendar Year:
Period:
Cash & Cash Equivalents:
Short Term Investments:
Cash & Short Term Investments:
Net Receivables:
Inventory:
Other Current Assets:
Total Current Assets:
PP&E:
Goodwill:
Intangible Assets:
Long Term Investments:
Tax Assets:
Other Non-Current Assets:
Total Non-Current Assets:
Other Assets:
Total Assets:
Accounts Payable:
Short Term Debt:
Tax Payables:
Deferred Revenue:
Other Current Liabilities:
Total Current Liabilities:
Long Term Debt:
Other Non-Current Liabilities:
Total Non Current Liabilities:
Other Liabilities:
Total Liabilities:
Common Stock:
Retained Earnings:
Accumulated Other Comprehensive Loss:
Other Total Stockholders' Equity:
Total Stockholders' Equity:
Total Liabilities and Stockholders' Equity:
Total Investments:
Total Debt:
Net Debt:
111.63M
2.33B
-
108.88M
108.88M
-
719.85M
828.73M
13.58M
250.07M
1.12B
1.87B
1.50B
462.89M
500.90M
36.41M
462.89M
Statement of Cash Flow
Date:
Period:
403.76M
Differed Income Tax :
-
Stock Based Compensation :
-
Change in Working Capital :
- 405614.00K
Accounts Receivables:
-
Other Working Capital:
-
Other Non-Cash Items:
-
Net Cash Provided by Operating Activities:
-
Investments in PP&E:
-
Net Acquisitions:
-
Purchases of Investments:
-
Sales/Maturities of Investments:
Other Investing Activities:
Net Cash Used for Investing Activities:
Debt Repayment:
Common Stock Issued:
Common Stock Repurchased:
Dividend Paid:
Other Financing Activities:
Net Cash Used Provided by Financing Activities:
Effect of FOREX on Changes in Cash:
Net Changes in Cash:
Cash at End of Period:
Cash at Beginning of Period:
Operating Cash Flow:
Capital Expenditure:
Free Cash Flow (FCF):
3/31/22
2022
Q1
151.62M
-
151.62M
468.17M
-
-
619.79M
-
3.71B
84.45M
-
-
-
3.80B
47.24B
44.06B
305.57M
-
-
-
-
305.57M
-
18.18B
18.18B
-
18.48B
30.24B
- 4331201.26K
37.9M
-
March 31, 2022 at 6:00:00 AM
1.51B
25.50B
43.99B
-
-
- 151624.0K
-
-
-
-
-
-
- 0.74K
-
-
-
-
-
332.37M
-
-
-
Our Proprietary Portfolio Rating
Our Rating:
D
Price Forecast/Expected Price in Next 5 Years of
O
2023
2024
2025
2026
2027
$67.64
$70.95
$74.42
$78.06
$81.89