Realty Income Corporation (O) Stock Valuation — PE Analysis
REIT - Retail · NYSE
Current Price
$62.72
PE Ratio (TTM)
50.6x
Intrinsic Value
$88.44
+29.1% margin of safety
COMPETITIVE MOAT
↑Scale and Diversification
Realty Income's vast portfolio of over 13,000 properties across diverse tenant industries and geographies provides significant diversification. This scale allows for favorable financing terms and operational efficiencies.
↑Long-Term Leases
The company's strategy of securing long-term net lease agreements with creditworthy tenants creates predictable and stable rental income. These leases often include rent escalations, further enhancing revenue visibility.
↑Tenant Relationships
Established relationships with a broad base of essential retail and service tenants, many of whom are industry leaders, foster tenant retention. This reduces vacancy risk and supports high occupancy rates.
INVESTMENT RISKS
↓Retail Sector Headwinds
Ongoing shifts in consumer behavior and the rise of e-commerce continue to pressure traditional brick-and-mortar retail. This can lead to tenant defaults or increased demand for lease concessions.
↓Interest Rate Sensitivity
As a real estate investment trust, Realty Income relies on debt financing. Rising interest rates increase borrowing costs, potentially impacting profitability and dividend sustainability.
↓Tenant Concentration
While diversified, a significant portion of rental income may still be derived from a few key tenants or industries. The financial distress of a major tenant could disproportionately affect the company.
Base case
O base case PE valuation
A base case PE valuation for O estimates a fair value of about $88.44 per share, against a current price of $62.72. The model assumes 16.1% annual earnings growth, a 50x target PE multiple, and a 10% discount rate.
Intrinsic Value
$88.44
Margin of safety
+29.1%
Expected annual return
+7.1%
Base case assumptions: 16.1% annual earnings growth, 50x target PE, 10% discount rate, 5 year projection. Data as of 2026-06-12.
This base case uses default assumptions and is not financial advice. The fair value changes significantly when the target PE or earnings growth rate changes. Open the calculator to set your own assumptions and see the full sensitivity range.
Customize the O PE valuation
Adjust the target PE, earnings growth, and discount rate to see how the fair value and margin of safety for Realty Income Corporation respond.
Open PE Calculator for OCompany Overview
Known as "The Monthly Dividend Company," Realty Income is an S&P 500 corporation committed to delivering reliable monthly income to its shareholders. Operating as a Real Estate Investment Trust (REIT), its monthly payouts are generated from the consistent cash flow of over 6,500 commercial properties, which are leased to various businesses under long-term contracts. With a remarkable 52-year operational history, the firm (NYSE: O) has announced 608 uninterrupted monthly dividends for its common stock and has increased its dividend payout 109 times since going public in 1994. It also holds a distinguished position within the S&P 500 Dividend Aristocrats index. For additional details, please visit the company's official website at www.realtyincome.com.
Financial Metrics — O PE Stock Valuation Data
PE Ratio (TTM)
50.6x
PEG Ratio
5.11
Earnings Yield
1.97%
ROE (TTM)
2.9%
Revenue/Share (TTM)
$6.54
Dividend Yield
5.16%
Debt/Equity
0.77x
Frequently Asked Questions
What is the PE ratio of O?
The trailing twelve-month PE ratio of O reflects how much investors pay per dollar of Realty Income Corporation's earnings. This metric is most useful when compared to REIT - Retail peers and the company's own historical range.
Is O overvalued based on PE ratio?
O's PE of 50.6x combined with a PEG ratio of 5.11 provides a growth-adjusted perspective. A PEG above 2.0 suggests O may be richly valued even accounting for growth. Keep in mind that PE-based valuation works best for profitable, mature companies — for high-growth or cyclical REIT - Retail, a DCF analysis may be more appropriate.
How do I value O stock using PE ratio?
To value Realty Income Corporation using PE: (1) Compare the current PE (50.6x) against the REIT - Retail median to assess relative pricing, (2) check the PEG ratio (5.11) to adjust for growth expectations, (3) review the 5-year PE range to identify where the stock sits historically, and (4) estimate fair value by multiplying a target PE by forward EPS estimates. This relative approach complements DCF's absolute valuation.
What is the PEG ratio of O?
O's PEG ratio is 5.11, calculated by dividing the PE ratio (50.6x) by the expected earnings growth rate. A PEG above 2.0 often signals the stock is priced aggressively relative to its growth trajectory. Note that PEG accuracy depends on the reliability of growth estimates.
Should I use PE ratio or DCF for O stock valuation?
PE ratio gives a quick relative read — how O is priced versus REIT - Retail peers. DCF provides an absolute value based on projected free cash flows. For the most reliable valuation, use PE as a quick comparability screen and DCF for a deeper fundamental analysis. Each method has blind spots: PE ignores capital structure and cash flow quality, while DCF is sensitive to growth and discount rate assumptions.
Learn More
- See O DCF Valuation → — Intrinsic value via Discounted Cash Flow analysis
- PE Methodology — Step-by-step guide to PE ratio stock valuation
- DCF Methodology — Guide to discounted cash flow analysis
- PE Ratio — Understanding the price-to-earnings ratio
- Intrinsic Value — How to evaluate stock fair value
Related PE Valuations
All Real Estate valuationsP/E and DCF value O with different methods and assumptions, so the two conclusions can differ. Compare the DCF intrinsic value.
Price as of 2026-06-12. Financial data from Financial Modeling Prep (trailing twelve months) · Valuation methodology by Charlie Wang.
This is an estimate, not investment advice.