Is Realty Income Corporation (O) Poised To Benefit From a Lower Interest Rate?

Parnassus Investments, an investment management company, released the “Parnassus Core Equity Fund” third quarter 2024 investor letter. A copy of the letter can be downloaded here. U.S equities rose in the third quarter and the Fund (Investor Shares) appreciated 5.50% (net of fees) in the quarter underperforming the S&P 500 Index’s 5.89% return. The favorable stock selection in the Materials and Financials sector contributed to the fund’s performance in the quarter while stock selection in the Information Technology and Industrials sectors detracted. In addition, please check the fund’s top five holdings to know its best picks in 2024.

Parnassus Core Equity Fund highlighted stocks like Realty Income Corporation (NYSE:O), in the third quarter 2024 investor letter. Realty Income Corporation (NYSE:O) is a real estate investment trust that generates dependable monthly cash dividends from a consistent and predictable level of cash flow from operations. The one-month return of Realty Income Corporation (NYSE:O) was -4.90%, and its shares gained 6.76% of their value over the last 52 weeks. On November 25, 2024, Realty Income Corporation (NYSE:O) stock closed at $57.45 per share with a market capitalization of $50.281 billion.

Parnassus Core Equity Fund stated the following regarding Realty Income Corporation (NYSE:O) in its Q3 2024 investor letter:

“Realty Income Corporation (NYSE:O) is poised to benefit from lower interest rates. Because its commercial tenants are mostly on 10-year leases, the stock’s steady dividend stream is attractive in the current environment of slow deceleration in the economy with rates coming down. In this favorable backdrop, the company also continues to execute well.”

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Realty Income Corporation (NYSE:O) is not on our list of 31 Most Popular Stocks Among Hedge Funds. As per our database, 23 hedge fund portfolios held Realty Income Corporation (NYSE:O) at the end of the third quarter which was 19 in the previous quarter. While we acknowledge the potential of Realty Income Corporation (NYSE:O) as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is as promising as NVIDIA but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.

In another article, we discussed Realty Income Corporation (NYSE:O) and shared the list of high growth non-tech stocks that are profitable in 2024. In addition, please check out our hedge fund investor letters Q3 2024 page for more investor letters from hedge funds and other leading investors.

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Disclosure: None. This article is originally published at Insider Monkey.