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10 Reasons to Buy and Hold This Dividend Stock Forever

Tue Jun 24, 2025
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Leo Sun, The Motley Fool

5 min read

In This Article:

  • Realty Income’s scale, stickiness, and diversification make it a great buy.

  • The real estate investment trust pays high dividends on a monthly basis.

  • Right now, it still looks undervalued relative to its growth potential.

  • 10 stocks we like better than Realty Income ›

Warren Buffett once said his favorite holding period for the right stock was "forever." However, it can be tough to find the right stock to simply buy, hold, and forget, as geopolitical conflicts, tariffs, trade wars, and other macro headwinds rattle the markets.

If you're worried about those unpredictable challenges, you should buy an evergreen dividend stock with a proven track record of rewarding its long-term investors. One of those stocks is Realty Income (NYSE: O) -- and I'll give you 10 simple reasons to buy and hold it forever.

A happy person fans out a handful of cash.

Image source: Getty Images.

Realty Income is one of the world's largest real estate investment trusts (REITs). REITs buy a lot of properties, rent them out, and split the rental income with their investors. REITs must pay out at least 90% of their taxable income as dividends to maintain a favorable tax rate, so they'll generate steady income as long as their properties are occupied.

REITs provide single, double, and triple net leases. In a single net lease, the tenant pays the property taxes while the REIT pays the insurance and maintenance costs. In a double net lease, the tenant pays the property taxes and insurance, while the REIT pays the maintenance costs.

But in a triple net lease, the tenant pays all the taxes, insurance premiums, and maintenance costs, while the REIT pays practically nothing. Realty Income, along with most major REITs, use triple net leases to reduce their expenses and maximize their profits.

Realty Income owns more than 15,600 properties in all 50 U.S. states, the U.K., and six countries in Europe. Its clients are diversified across 91 different industries, but it focuses heavily on recession-resistant businesses like convenience stores and discount retailers.

Realty's top tenants include 7-Eleven, Dollar General, Walgreens, and Dollar Tree, but none of those tenants account for more than 3.4% of its annualized rent. Some of those tenants have struggled with store closures in recent years, but many of its stronger tenants are picking up the slack.

Realty Income currently has an occupancy rate of 98.5% across its properties, and that metric has never dropped below 96% since its IPO in 1994. Its ability to maintain those high occupancy rates through the Great Recession, the COVID-19 pandemic, and the borderline recession of 2022 indicate it's built to withstand tough economic downturns.