Realty Income, a large-cap real estate investment trust listed on the New York Stock Exchange under the ticker O, has significantly underperformed the market over the past decade. Investors have seen a total return of 93% from the stock, while the S&P 500 delivered a 337% return during the same period.
Analyst Matt Frankel, a Certified Financial Planner, has made three predictions for the company in 2026. He stated, "I'm predicting that 2026 is the year we'll see this change." Frankel holds positions in Realty Income.
His first prediction is that Realty Income will outperform the S&P 500 in 2026. He believes interest rates, including the 10-year Treasury yield, will fall significantly. Frankel noted that throughout its 32-year public history, the REIT has averaged a 13.7% total return, with better performance typically occurring when rates decline.
The second prediction involves acquisitions. Realty Income is expected to report $5.5 billion in investments for 2025 when year-end results are released in a few weeks. Frankel thinks 2026 will be even bigger for acquisitions. He said, "I think Realty Income will not only perform well but will also have an active year of acquisitions," particularly in newer areas like data centers and gaming properties as capital costs become more advantageous with falling rates.
The third prediction is a dividend raise. Since its 1994 NYSE listing, Realty Income has averaged a 4.2% dividend growth rate, but this slowed to 3.5% annually over the past decade. Frankel predicts improving market conditions will allow the company to increase its monthly payout by a total of 5% or more by the end of 2026.
Frankel acknowledged these are bold predictions with no guarantee of accuracy. He concluded, "The point is that conditions are looking far more favorable for REIT performance, and I'm excited to see how it plays out."
The Motley Fool Stock Advisor analyst team recently identified 10 stocks they consider the best for investors to buy now, and Realty Income was not on that list. The team highlighted that their service has a total average return of 955%, compared to 196% for the S&P 500. Examples given include a $1,000 investment in Netflix on December 17, 2004, which would now be worth $474,578, and a similar investment in Nvidia on April 15, 2005, now worth $1,141,628. Stock Advisor returns are as of January 17, 2026.
The Motley Fool has positions in and recommends Realty Income. The article "3 Bold Predictions for Realty Income in 2026" was originally published by The Motley Fool.