When Is It The Best Time To Buy O And The Others?

If you’re looking for income, check out the triple net lease space, which has experienced a nice pullback recently. Particularly, for Realty Income Corp. (NYSE:O) and its two other peers, National Retail Properties, Inc. (NYSE:NNN) and Store Capital Corp. (NYSE:STOR), their shares have declined 14-25% in the last year.

I thought Store Capital was a good bargain at below $21 per share. Yet, in a matter of a few days, the shares have continued to fall another 5% or so.

In the last few days, all three companies have experienced pullbacks. So, there are some forces that are affecting the industry. The anticipation of higher interest rates (and rates actually rising) are some of them.

Realty Income shares have been the most resilient no matter in the price action of the last year or the last few days. This is not a surprise because as I said before, Realty Income is the bluest of the blue chips in the group.

After the pullbacks, the stocks offer decent yields of 4.6-5.8%.

When is the best time to buy Realty Income and the others?

The lower the perceived quality and growth of the stock, the lower the multiple one should pay.

After reviewing the fundamentals and technical charts, I think interested investors can consider:

  • Realty Income starting at $50 or less (which comes out to a maximum 2017 multiple of 16.5),
  • National Retail at $38 or less (which comes out to a maximum 2017 multiple of 15.3), and
  • Store Capital at current prices.

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Disclosure: At the time of writing, I own shares of STOR.

Disclaimer: I am not a certified financial advisor. This article is for educational purposes, so consult a financial advisor and or tax professional if necessary before making any investment decisions.

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