Why Delaying Interest Rate Cuts Helps Realty Income Stock Investors

Realty Income (NYSE: O) shares have fallen during the past year. Concerns about rising interest rates have weighed on the stock as borrowing costs increase and property values stagnate in some markets. Additionally, the Federal Reserve's plan to delay rate cuts likely prolongs the weakness in the company's stock price.

Nonetheless, the situation may have become a benefit to long-term investors, particularly those who seek to buy more shares. Here's why they should view it as positive.

Indeed, investors need to remember that Realty Income is a real estate investment trust (REIT). Thus, lower interest rates tend to increase profit, and that can increase the stock price and required dividend. From that standpoint, one can see why Realty Income struggles to gain traction as the Fed continues to delay the cut in the federal funds rate it hinted was coming.

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Source Fool.com