Realty Earnings (O 1.11%) delivered a efficiency for the report books in 2022. The true property funding belief (REIT) accomplished a report $9 billion of acquisitions. That helped ship sturdy earnings progress, permitting the corporate to proceed growing its enticing dividend. 

Regardless of that spending spree, Realty Earnings entered 2023 in glorious monetary form. Due to that, the REIT expects to proceed rising its portfolio, money circulation, and dividend. With shares down about 8% for the reason that begin of final 12 months, it is an awesome purchase proper now. 

A record-setting 12 months

Realty Earnings acquired $9 billion of income-producing actual property final 12 months. That was about 50% above its steerage for greater than $6 billion in property acquisitions. It additionally obliterated its prior peak of creating $6.4 billion in property purchases in 2021 (not accounting for mergers). Realty Earnings additionally acquired VEREIT for $13.9 billion in 2021.

Even with that report acquisition quantity, the corporate remained extremely selective, solely pursuing accretive offers. It closed about 9% of the $95 billion deal quantity it sourced throughout the 12 months.

That mixture of quantity and selectivity enabled Realty Earnings to ship extremely accretive progress. The REIT grew its adjusted funds from operations (FFO) by 9.2% per share. That was its highest progress price since 2013. 

The accretive progress enabled Realty Earnings to proceed growing its dividend. The REIT gave traders a elevate every quarter, rising the dividend by 4.7% final 12 months. In the meantime, it ended the 12 months with a conservative dividend payout ratio of 75.7% of its adjusted FFO. 

The capability to proceed rising

Regardless of greater rates of interest and unsure macroeconomic circumstances, Realty Earnings expects to proceed delivering accretive progress in 2023. The REIT anticipates spending over $5 billion on property acquisitions this 12 months. That ought to develop its adjusted FFO per share from $3.92 in 2022 to a spread of $3.93 to $4.03 per share in 2023. 

The corporate has ample monetary capability to fund new offers. Given its conservative dividend payout ratio, it is retaining some money after paying the dividend to assist finance acquisitions. In the meantime, the corporate has one of many highest credit score rankings within the REIT sector and a low leverage ratio, giving it entry to low-cost capital to proceed making offers. It additionally continues to select the best instances to promote inventory and lift extra fairness capital to fund its progress.

Realty Earnings additionally continues to seek out new sources of progress. Whereas its bread-and-butter property sorts are freestanding, single-tenant retail properties like grocery shops, pharmacies, and comfort shops, the REIT continues diversifying past retail. It has a large and rising industrial portfolio. As well as, it has added gaming, indoor vertical farms, and consumer-centric medical properties to its portfolio over the previous few months. The corporate can proceed to accumulate new property sorts because it finds accretive offers in enticing sectors.

Realty Earnings’s growth into consumer-centric medical actual property (e.g., dental, eye, and pediatric care) is noteworthy. It estimates this market at over $2 trillion. Due to that, it has an unlimited alternative set to proceed making acquisitions.

Realty Earnings additionally continues to increase internationally. It made its first transaction in Italy final quarter, including that nation to its rising European platform that additionally has properties within the U.Ok. and Spain. The corporate will doubtless proceed its worldwide growth because it finds accretive and enticing alternatives.

A top-notch revenue inventory

Realty Earnings has been an distinctive dividend inventory through the years. The REIT has elevated its payout 119 instances since its public market itemizing in 1994. With the dividend persevering with to develop final 12 months and the share value down, it yields a horny 4.7%. It has much more progress forward, making it an awesome purchase for income-seeking traders proper now.