Recent Buy – Realty Income (O)

It has been a long time since I have made 2 purchases this close together. Low and behold though it has happened. Realty Income was a company that I owned a couple of years ago. Unfortunately, I made the poor decision to sell because I got wrapped up in the possibility of interest rates going up. That was a tough lesson for me because I got some profit at the time but then I watched the stock rally for years. If I would have just held onto the stock I would have collected dividends along the way and would have a lot cheaper cost basis. Live and learn!

Lately though Realty Income had become very interesting for me. With the recent pullback, they are currently producing PE ratios that haven’t been seen since 2011. This fact is very appealing to me. They operate as a triple net REIT and have secured long term contracts with some great companies. They proved to do very well during the last recession which is also appealing to me. The company also pays a dividend every month which will help boost my dividend income every month but this was not a factor in my decision to buy the stock.

As I mentioned, I have owned this stock before. I am much better positioned to hold this stock now than I was in the past. Previously I owned this stock in an individual account which meant that I was paying taxes on the dividends. This time around though I am holding the stock in my RothIRA which means I won’t be paying taxes on the dividends. Anytime I can position myself to not pay taxes is a great thing!

So given the opportunity I decided to start a small position in the company so I picked up 10 shares. My cost basis on this purchase is $541.24. With the recent pullback in the REIT sector it is very possible that the price of the stock could get pushed down even more. If this does happen I will gladly build onto this position. With these new shares added to my portfolio it will increase my PADI by $25.50. Which is one step closer to my goal of $1,000 by the end of the year.

I have recently noticed some other DGI bloggers posting about purchasing stock in the company as well. So it seems to be a popular choice lately.

Have you recently purchased stock in Realty Income? Do you currently own any shares of Realty Income? If so I would love to hear about it.

As always I look forward to reading all of your comments and questions, until then….. happy investing!

-Jason from MoreDividends.com

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