4 Reasons to Consider Realty Income Stock in 2025

As the S&P 500 flirts with record highs, trading at over 30 times earnings, investors might assume the market offers little value. Yet hidden gems persist—undervalued stocks with significant upside potential. Realty Income (O 0.83%), a leading real estate investment trust (REIT), stands out as one such opportunity.

REITs thrive in low-rate environments, where cheaper financing fuels property acquisitions and fixed-income alternatives lose their luster. After weathering the storm of rising rates in 2022-2023, Realty Income now benefits from the Federal Reserve's dovish pivot, with three rate cuts in 2024 and at least two projected for 2025. The 10-Year Treasury yield's retreat to 4.1% contrasts sharply with Realty Income's 5.4% monthly dividend yield—a siren call for income-starved investors.