Investors Favor High-Yield Stocks for Passive Income
Written by Emily J. Thompson, Senior Investment Analyst
Updated: Jun 22 2026
0mins
Source: Fool
- REIT Advantages: Realty Income, as a REIT, is required to pay at least 90% of its net income as dividends, currently offering an annual dividend of about $3.25 per share, which has been consistently increased since 1994, ensuring its dividend's safety and attractiveness.
- Stable Returns from Energy Giant: Chevron pays an annual dividend of $7.12, having increased it for 39 consecutive years; despite oil price fluctuations, its $13.8 billion in free cash flow is sufficient to cover its $14 billion dividend payout, demonstrating dividend stability.
- Potential in Alcohol Market: Constellation Brands has maintained dividend growth since 2015, currently offering $4.12 per share annually; despite declining alcohol consumption, its $1.8 billion in free cash flow exceeds its $716 million dividend costs, indicating financial health.
- Attractive Investment Returns: By investing in Realty Income, Chevron, and Constellation Brands, investors can secure stable passive income of $540, $406, and $293 respectively, highlighting the appeal of these stocks in providing income and potential capital appreciation.
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Analyst Views on O
Wall Street analysts forecast O stock price to fall
11 Analyst Rating
3 Buy
7 Hold
1 Sell
Hold
Current: 63.190
Low
60.00
Averages
62.59
High
67.50
Current: 63.190
Low
60.00
Averages
62.59
High
67.50
About O
Realty Income Corporation is a real estate investment trust. The Company is engaged in the acquisition, ownership, and management of freestanding commercial properties leased under long‑term net lease agreements to a diversified base of operators, including a blend of investment grade, investment grade equivalent, and other clients. It owns a portfolio of over 15,500 properties in all 50 United States (U.S.) states, the United Kingdom, and eight other countries in Europe. It is engaged in a single business activity, which is the leasing of property to clients, generally on a net basis. That business activity spans various geographic boundaries and includes property types and clients engaged in various industries. Its property types include retail, industrial, gaming, and other. Its industry concentrations include grocery, convenience stores, home improvement, dollar stores, restaurants-quick service, health and fitness, drug stores, automotive service, among others.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
Realty Income Declares 673rd Consecutive Monthly Dividend
- Dividend Continuity: Realty Income has declared its 673rd consecutive monthly dividend at $0.2710 per share, equating to an annualized amount of $3.252 per share, demonstrating the company's robust ability to maintain stable cash flow and shareholder returns.
- Payment Schedule: The dividend is set to be paid on August 14, 2026, to shareholders of record as of July 31, 2026, ensuring timely returns for investors and further boosting their confidence in the company.
- Market Position: As a member of the S&P 500, Realty Income boasts a portfolio of over 15,500 properties across the U.S. and several other countries, solidifying its leadership in the global real estate investment trust sector.
- Commitment to Shareholder Returns: The company has increased its dividends for over 31 consecutive years since its inception, earning its place among the S&P 500 Dividend Aristocrats, reflecting its long-term commitment to shareholder returns and sustainable growth strategy.
See More
REITs Show Significant Rebound Amid Market Decline
- Strong REIT Performance: While the overall market declined by about 1% in June, real estate investment trusts (REITs) surged, with the entire sector up approximately 9.5% this year, demonstrating resilience and attractiveness in the economic recovery.
- Income Distribution Advantage: REITs are favored for their legal requirement to distribute 90% of taxable income to shareholders; for instance, Realty Income has increased its monthly dividend 135 times since going public in 1994, attracting many income-seeking investors.
- Sector Recovery Drivers: With workers returning to offices and malls, lodging and resort REITs have risen nearly 43% this year, while data center REITs have increased over 33% due to extraordinary growth driven by artificial intelligence and rising data usage, highlighting strong growth potential in specific categories.
- Investment Timing Analysis: Although the economic outlook is relatively optimistic with unemployment near historical lows, investing in REITs requires attention to future interest rate trends; if rates remain stable, debt-heavy REITs will continue to benefit from a low-rate environment.
See More
REITs Show Significant Recovery Trends in 2026
- Overall REIT Recovery: In 2026, REITs have risen approximately 9.5%, outperforming the broader market, indicating strong signs of recovery post-pandemic, particularly in the office and retail sectors.
- Subsector Performance: Lodging and resort REITs have surged nearly 43% this year, with a 12% increase in June alone, primarily driven by a resurgence in group and corporate travel, reflecting a rebound in consumer demand.
- Data Center REIT Growth: Data center REITs have increased over 33% this year, fueled by extraordinary growth from artificial intelligence companies and rising data usage, showcasing the sector's robust growth potential that attracts investor interest.
- Economic Environment Impact: The U.S. economy appears relatively strong with an unemployment rate of 4.2%, near historical lows, and if interest rates remain stable, debt-heavy REITs will benefit, especially healthcare-related REITs that tend to perform well during economic downturns.
See More
Rising Medicare Costs and Investment Strategies
- Rising Medicare Costs: The standard monthly premium for Medicare Part B in 2026 is set at $202.90, reflecting a $17.90 increase from 2025, leading to an annual cost nearing $5,000, which continues to exert financial pressure on retirees.
- Investment Requirement Analysis: To cover the annual $5,000 healthcare bill, investors need approximately $143,000 in capital at a 3.5% yield or about $100,000 at a 5% yield, highlighting the urgent need for stable income sources in retirement planning.
- Yield Comparison: An investment portfolio yielding 3.5% can grow a $5,000 income stream to $19,300 over 20 years, while a 10% yield portfolio remains flat at $5,000, underscoring the significance of long-term investment and compounding returns.
- Retirement Income Planning: Retirees should focus on breaking down healthcare costs, ensuring coverage for Medicare expenses first before addressing other expenditures, thereby optimizing financial management and alleviating economic burdens.
See More
The Compounding Power of Realty Income REIT
- Stable Dividend Growth: Since its public listing in 1994, Realty Income has increased its monthly dividend 135 times, with 115 consecutive quarters of growth, achieving a compound annual growth rate of 4.1%, demonstrating its reliability and sustainability in dividend payments.
- Robust Investment Returns: Investors who reinvested dividends have earned a 13.6% compound annual return since 1994; for instance, a $25,000 investment in 1994 would now be worth nearly $1.2 million, showcasing the power of compounding.
- Strong Financial Foundation: Realty Income boasts a dividend yield exceeding 5% and a conservative payout ratio of around 70%, providing it with the financial strength to maintain stable income and invest in growth.
- Future Growth Potential: Through strategic private capital partnerships and investments in data centers, Realty Income aims for mid-to-high single-digit annual growth in adjusted funds from operations (AFFO) per share, potentially delivering over 10% annualized total returns for long-term investors.
See More
Realty Income's Compounding Potential in REIT Sector
- Stable Dividend Growth: Realty Income has increased its monthly dividend 135 times since its 1994 listing, maintaining growth for the past 115 consecutive quarters, demonstrating its strong capability in dividend payments and attracting income-seeking investors.
- Significant Investment Returns: Investors have achieved a 13.6% annualized return since the REIT's public debut, with a $25,000 investment in 1994 growing to nearly $1.2 million, highlighting the powerful effects of compounding.
- Future Growth Potential: With a current dividend yield exceeding 5% and projected AFFO per share growth in the mid-to-high single digits, Realty Income could deliver over 10% annualized total returns, making it appealing for long-term investors.
- Strategic Capital Partnerships: By forming strategic partnerships with private capital and investing in data centers, Realty Income is paving the way for future growth, enhancing its financial strength and creating sustained value for shareholders.
See More
Realty Income Declares 673rd Consecutive Monthly Dividend
- Dividend Continuity: Realty Income has declared its 673rd consecutive monthly dividend at $0.2710 per share, equating to an annualized amount of $3.252 per share, demonstrating the company's robust ability to maintain stable cash flow and shareholder returns.
- Payment Schedule: The dividend is set to be paid on August 14, 2026, to shareholders of record as of July 31, 2026, ensuring timely returns for investors and further boosting their confidence in the company.
- Market Position: As a member of the S&P 500, Realty Income boasts a portfolio of over 15,500 properties across the U.S. and several other countries, solidifying its leadership in the global real estate investment trust sector.
- Commitment to Shareholder Returns: The company has increased its dividends for over 31 consecutive years since its inception, earning its place among the S&P 500 Dividend Aristocrats, reflecting its long-term commitment to shareholder returns and sustainable growth strategy.
See More
REITs Show Significant Rebound Amid Market Decline
- Strong REIT Performance: While the overall market declined by about 1% in June, real estate investment trusts (REITs) surged, with the entire sector up approximately 9.5% this year, demonstrating resilience and attractiveness in the economic recovery.
- Income Distribution Advantage: REITs are favored for their legal requirement to distribute 90% of taxable income to shareholders; for instance, Realty Income has increased its monthly dividend 135 times since going public in 1994, attracting many income-seeking investors.
- Sector Recovery Drivers: With workers returning to offices and malls, lodging and resort REITs have risen nearly 43% this year, while data center REITs have increased over 33% due to extraordinary growth driven by artificial intelligence and rising data usage, highlighting strong growth potential in specific categories.
- Investment Timing Analysis: Although the economic outlook is relatively optimistic with unemployment near historical lows, investing in REITs requires attention to future interest rate trends; if rates remain stable, debt-heavy REITs will continue to benefit from a low-rate environment.
See More
REITs Show Significant Recovery Trends in 2026
- Overall REIT Recovery: In 2026, REITs have risen approximately 9.5%, outperforming the broader market, indicating strong signs of recovery post-pandemic, particularly in the office and retail sectors.
- Subsector Performance: Lodging and resort REITs have surged nearly 43% this year, with a 12% increase in June alone, primarily driven by a resurgence in group and corporate travel, reflecting a rebound in consumer demand.
- Data Center REIT Growth: Data center REITs have increased over 33% this year, fueled by extraordinary growth from artificial intelligence companies and rising data usage, showcasing the sector's robust growth potential that attracts investor interest.
- Economic Environment Impact: The U.S. economy appears relatively strong with an unemployment rate of 4.2%, near historical lows, and if interest rates remain stable, debt-heavy REITs will benefit, especially healthcare-related REITs that tend to perform well during economic downturns.
See More
Rising Medicare Costs and Investment Strategies
- Rising Medicare Costs: The standard monthly premium for Medicare Part B in 2026 is set at $202.90, reflecting a $17.90 increase from 2025, leading to an annual cost nearing $5,000, which continues to exert financial pressure on retirees.
- Investment Requirement Analysis: To cover the annual $5,000 healthcare bill, investors need approximately $143,000 in capital at a 3.5% yield or about $100,000 at a 5% yield, highlighting the urgent need for stable income sources in retirement planning.
- Yield Comparison: An investment portfolio yielding 3.5% can grow a $5,000 income stream to $19,300 over 20 years, while a 10% yield portfolio remains flat at $5,000, underscoring the significance of long-term investment and compounding returns.
- Retirement Income Planning: Retirees should focus on breaking down healthcare costs, ensuring coverage for Medicare expenses first before addressing other expenditures, thereby optimizing financial management and alleviating economic burdens.
See More
The Compounding Power of Realty Income REIT
- Stable Dividend Growth: Since its public listing in 1994, Realty Income has increased its monthly dividend 135 times, with 115 consecutive quarters of growth, achieving a compound annual growth rate of 4.1%, demonstrating its reliability and sustainability in dividend payments.
- Robust Investment Returns: Investors who reinvested dividends have earned a 13.6% compound annual return since 1994; for instance, a $25,000 investment in 1994 would now be worth nearly $1.2 million, showcasing the power of compounding.
- Strong Financial Foundation: Realty Income boasts a dividend yield exceeding 5% and a conservative payout ratio of around 70%, providing it with the financial strength to maintain stable income and invest in growth.
- Future Growth Potential: Through strategic private capital partnerships and investments in data centers, Realty Income aims for mid-to-high single-digit annual growth in adjusted funds from operations (AFFO) per share, potentially delivering over 10% annualized total returns for long-term investors.
See More
Realty Income's Compounding Potential in REIT Sector
- Stable Dividend Growth: Realty Income has increased its monthly dividend 135 times since its 1994 listing, maintaining growth for the past 115 consecutive quarters, demonstrating its strong capability in dividend payments and attracting income-seeking investors.
- Significant Investment Returns: Investors have achieved a 13.6% annualized return since the REIT's public debut, with a $25,000 investment in 1994 growing to nearly $1.2 million, highlighting the powerful effects of compounding.
- Future Growth Potential: With a current dividend yield exceeding 5% and projected AFFO per share growth in the mid-to-high single digits, Realty Income could deliver over 10% annualized total returns, making it appealing for long-term investors.
- Strategic Capital Partnerships: By forming strategic partnerships with private capital and investing in data centers, Realty Income is paving the way for future growth, enhancing its financial strength and creating sustained value for shareholders.
See More
