BUY & SELL ALERT🚨: Two Positions I Added, One I Sold
Reallocating capital from a steady dividend payer into two high growth opportunities with strong long term potential
It has been a busy week in my portfolio. I made three moves that I think will set me up for stronger long term growth and more balanced risk. I sold my position in Realty Income after reassessing its growth prospects in the current rate environment. I also added two new names that I believe have far better upside potential. One is a rapidly growing consumer brand and the other is a proven leader in e-commerce and cloud computing. Here is a closer look at why I made these moves and how they fit into my broader investing strategy.
Why I Sold Realty Income (O)
Realty Income has been one of the most consistent dividend payers in the market, known for its monthly payouts and long history of stability. Realty Income Corporation O 0.00%↑ is a real estate investment trust (REIT) that focuses on acquiring and managing a diverse portfolio of freestanding, single-tenant commercial properties. It’s a way to obtain real estate exposure from the stock market, without actually owning property.
The company leases these properties to businesses, primarily retail companies like convenience stores, dollar stores, and grocery stores, under long-term, triple-net lease agreements. The term "triple-net lease" is key, as it means the tenant, not Realty Income, is responsible for the property's operating expenses, including taxes, maintenance, and insurance. This business model provides a stable and predictable stream of rental income for Realty Income, which it uses to pay its shareholders a monthly dividend.
I have owned it for years, but my decision to sell was based on both valuation and opportunity cost. I originally started a position in this company for the dividend. However, I only collected about $50 per month from O. So from an income perspective, it wasn’t a large contributor to my overall income.
Therefore, I sold this off with a relatively small gain of only $713.
The current yield is attractive at around 5.5%, but the growth rate of the dividend has slowed in recent years. Rising interest rates have also put pressure on the stock price, and I see limited near-term upside from here. More importantly, I found opportunities that I believe have significantly higher total return potential over the next five years.
Selling O was not about losing faith in the company. It was about reallocating capital into areas where I see better growth without giving up too much on stability.
