Make money without even trying. That might sound impossible. It isn’t, though.
Granted, the old saying that “it takes money to make money” is usually true. You typically must have upfront capital to invest to make money. You’ll also need an investment vehicle that will produce income.
But the second hurdle is an easy one to jump. Income-seeking investors have plenty of alternatives. I think Realty Income(NYSE: O) is one of the best. Investing $50,000 in this ultra-high-yield dividend stock could generate $2,865 in annual passive income.
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Realty Income calls itself the “Real Estate Partner to the World’s Leading Companies.” That’s an apt description. Realty Income owns 15,627 commercial real estate properties leased to 1,598 clients. And many of its tenants indeed rank among the world’s leading companies, including Dollar General, FedEx, Home Depot, and Walmart.
Like many top real estate companies, Realty Income is organized as a real estate investment trust (REIT). It’s the seventh-largest REIT in the world with properties in eight countries.
Realty Income’s tenant base is remarkably diversified. Its clients represent 91 industries. Roughly 91% of the REIT’s total rent is largely immune to economic downturns and/or insulated from e-commerce competition.
Perhaps the most impressive thing about Realty Income is its reliability. The company has been in business for 56 years. It has delivered positive total operational returns for 29 consecutive years. Realty Income’s compound annual total return since its listing on the New York Stock Exchange in 1994 is 13.6%.
Even better for income investors, Realty Income is a passive income machine. Its forward dividend yield currently stands at 5.73%. An initial investment of $50,000 would generate $2,865 in annual income at that yield.
By the way, you won’t receive that dividend income each quarter as is the case with most dividend-paying stocks. One of Realty Income’s registered trademarks is “The Monthly Dividend Company,” reflecting the fact that it pays dividends monthly rather than quarterly.
But is the REIT’s dividend safe? I think so. Realty Income has paid a dividend for 659 months. It has also increased the dividend for 30 consecutive years. If history is any guide, you won’t have to worry about inflation eroding the buying power of your passive income from this stock. The REIT’s dividend has risen by a compound annual growth rate of 4.3%.
Don’t be alarmed by Realty Income’s dividend payout ratio of nearly 288%. Earnings-based payout ratios often look worrisome. The more important financial metric to watch is adjusted funds from operations (AFFO). Realty Income used roughly 75% of its diluted AFFO in the first quarter of 2025 to fund its dividend. That’s a comfortable level that gives the REIT flexibility to pay and grow its dividend.
Realty Income can give investors more than just a dividend, though. Its long-term growth prospects appear to be solid, too.
The REIT had around $23 billion of sourced acquisition opportunities in the first quarter of 2025. That’s encouraging, considering it had roughly $43 billion of sourced acquisition opportunities in all of 2024.
Realty Income should have especially significant growth potential in Europe. The estimated total addressable net lease market in Europe is $8.5 trillion. Competition is limited in Europe as well, with only two major REITs other than Realty Income operating in the region.
But Realty Income also has solid growth prospects in the U.S. The estimated total addressable U.S. net lease market is $5.5 trillion. Data centers and gaming present relatively new growth opportunities for REITs.
A $50,000 investment in this ultra-high-yield dividend stock should easily be able to generate $2,865 per year in passive income. However, the total amount of money you could make from owning Realty Income over the long term could be much higher.
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Keith Speights has positions in Realty Income. The Motley Fool has positions in and recommends FedEx, Home Depot, Realty Income, and Walmart. The Motley Fool has a disclosure policy.
