Realty Beneish M Score

O
 Stock
  

USD 70.15  1.89  2.77%   

This module uses fundamental data of Realty Income to approximate the value of its Beneish M Score. Realty Income M Score tells investors if the company management is likely to be manipulating earnings. The score is calculated using eight financial indicators that are adjusted by a specific multiplier. Please note, the M Score is a probabilistic model and cannot detect companies that manipulate their earnings with 100% accuracy. Please check Realty Income Piotroski F Score and Realty Income Altman Z Score analysis.
  
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Realty Income Issuance Repayment of Debt Securities is quite stable at the moment as compared to the past year. The company's current value of Issuance Repayment of Debt Securities is estimated at 1.55 Billion. Long Term Debt to Equity is expected to rise to 0.81 this year, although the value of Total Debt will most likely fall to about 7.5 B. Realty Income Cash and Equivalents Turnover is quite stable at the moment as compared to the past year. The company's current value of Cash and Equivalents Turnover is estimated at 3.94. Return on Investment is expected to rise to 1.44 this year, although the value of Interest Coverage will most likely fall to 43.68.
At this time, it appears that Realty Income Corp is an unlikely manipulator. The earnings manipulation may begin if Realty Income's top management creates an artificial sense of financial success, forcing the stock price to be traded at a high price-earnings multiple than it should be. In general, excessive earnings management by Realty Income executives may lead to removing some of the operating profits from subsequent periods to inflate earnings in the following periods. This way, the manipulation of Realty Income's earnings can lead to misrepresentations of actual financial condition, taking the otherwise loyal stakeholders on to the path of questionable ethical practices and plain fraud.
-2.92
Beneish M Score - Unlikely Manipulator
Elasticity of Receivables1.0Focus
Asset QualityN/AFocus
Expense Coverage0.85Focus
Gross Margin Strengs0.91Focus
Accruals Factor0.85Focus
Depreciation Resistance1.0Focus
Net Sales Growth1.08Focus
Financial Leverage Condition0.92Focus

Realty Income Beneish M-Score Indicator Trends

The cure to earnings manipulation is the transparency of financial reporting. It will typically remove the temptation of the top executives to inflate earnings (i.e., to promote the idea of 'winning at any cost'). Because a healthy internal audit department can enhance transparency, the board should promote the auditors' access to all the record-keeping systems across the enterprise. For example, if Realty Income's auditors report directly to the board (not management), the managers will be reluctant to manipulate simply due to the fear of punishment. On the other hand, the auditors will be free to investigate the ledgers properly because they know that the board has their back.
Current ValueLast YearChange From Last Year 10 Year Trend
Revenues2.2 B2.1 B
Significantly Up
Increasing
Slightly volatile
Selling General and Administrative Expense69.9 M76.5 M
Significantly Down
Increasing
Slightly volatile
Net Cash Flow from Operations1.4 B1.3 B
Significantly Up
Increasing
Slightly volatile
Depreciation Amortization and Accretion563.8 M683.1 M
Significantly Down
Increasing
Slightly volatile
Total Assets46.5 B43.1 B
Significantly Up
Increasing
Slightly volatile
Property Plant and Equipment Net15.6 B19 B
Significantly Down
Increasing
Slightly volatile
Trade and Non Trade Receivables225.8 M209.3 M
Significantly Up
Increasing
Slightly volatile
Total Liabilities19.5 B18.1 B
Significantly Up
Increasing
Slightly volatile
Current Assets891.5 M826.3 M
Significantly Up
Increasing
Slightly volatile
Current Liabilities1.4 B1.3 B
Significantly Up
Increasing
Slightly volatile
Total Debt7.5 B9.1 B
Significantly Down
Increasing
Slightly volatile
Operating Income334.3 M422 M
Significantly Down
Increasing
Slightly volatile
Gross Margin71.0278.0218
Significantly Down
Increasing
Slightly volatile

Realty Income Corp Beneish M-Score Driver Matrix

One of the toughest challenges investors face today is learning how to quickly synthesize historical financial statements and information provided by the company, SEC reporting, and various external parties in order to detect the potential manipulation of earnings. Understanding the correlation between Realty Income's different financial indicators related to revenue, expenses, operating profit, and net earnings helps investors identify and prioritize their investing strategies towards Realty Income in a much-optimized way. Analyzing correlations between earnings drivers directly associated with dollar figures is the most effective way to find Realty Income's degree of accounting gimmicks and manipulations.

About Realty Income Beneish M Score

M-Score is one of many grading techniques for value stocks. It was developed by Professor M. Daniel Beneish of the Kelley School of Business at Indiana University and published in 1999 under the paper titled The Detection of Earnings Manipulation. The Beneish score is a multi-factor model that utilizes financial identifiers to compile eight variables used to classify whether a company has manipulated its reported earnings. The variables are built from the officially filed financial statements to create a final score call 'M Score.' The score helps to identify companies that are likely to manipulate their profits if they show deteriorating gross margins, operating expenses, and leverage against growing revenue.

Operating Margin

26.17

Share
Realty Income Operating Margin is quite stable at the moment as compared to the past year. The company's current value of Operating Margin is estimated at 26.17

Realty Income Earnings Manipulation Drivers

Although earnings manipulation is typically not the result of intentional misconduct by the c-level executives, it is still a widespread practice by the senior management of public companies such as Realty Income. It is usually done by a series of misrepresentations of various accounting rules and operating activities across multiple financial cycles. The best way to spot the manipulation is to examine the historical financial statement to find inconsistencies in earning reports to find trends in assets or liabilities that are not sustainable in the future.
201720182019202020212022 (projected)
Trade and Non Trade Receivables104.58 M119.53 M144.99 M181.97 M209.26 M225.79 M
Revenues1.22 B1.33 B1.49 B1.65 B2.08 B2.24 B
Total Assets14.06 B15.26 B18.55 B20.74 B43.14 B46.54 B
Current Assets126.43 M155.38 M235.98 M1.11 B826.31 M891.55 M
Property Plant and Equipment Net11.9 B12.68 B13.84 B16.5 B18.97 B15.58 B
Depreciation Amortization and Accretion449.94 M498.79 M539.78 M593.96 M683.06 M563.8 M
Selling General and Administrative Expense51.97 M58.45 M84.15 M66.48 M76.46 M69.92 M
Total Liabilities6.69 B7.17 B8.78 B9.75 B18.08 B19.51 B
Current Liabilities287.19 M328.66 M515.99 M583.89 M1.26 B1.36 B
Total Debt5.84 B6.11 B6.5 B7.9 B9.09 B7.49 B
Operating Income320.85 M339.95 M405.23 M325.51 M422.02 M334.34 M
Net Cash Flow from Operations875.85 M940.74 M1.07 B1.12 B1.32 B1.43 B
Gross Margin73.9374.9774.5574.9478.0271.02

Realty Income ESG Sustainability

Some studies have found that companies with high sustainability scores are getting higher valuations than competitors with lower social-engagement activities. While most ESG disclosures are voluntary and do not directly affect the long term financial condition, Realty Income's sustainability indicators can be used to identify proper investment strategies using environmental, social, and governance scores that are crucial to Realty Income's managers, analysts, and investors.
Environment Score
Governance Score
Social Score

About Realty Income Fundamental Analysis

The Macroaxis Fundamental Analysis modules help investors analyze Realty Income Corp's financials across various querterly and yearly statements, indicators and fundamental ratios. We help investors to determine the real value of Realty Income using virtually all public information available. We use both quantitative as well as qualitative analysis to arrive at the intrinsic value of Realty Income Corp based on its fundamental data. In general, a quantitative approach, as applied to this company, focuses on analyzing financial statements comparatively, whereas a qaualitative method uses data that is important to a company's growth but cannot be measured and presented in a numerical way.
Please read more on our fundamental analysis page.
Realty Income, The Monthly Dividend Company, is an SP 500 company dedicated to providing stockholders with dependable monthly income. Additional information about the company can be obtained from the corporate website at www.realtyincome.com. Realty Income operates under REITRetail classification in the United States and is traded on New York Stock Exchange. It employs 367 people.

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Please check Realty Income Piotroski F Score and Realty Income Altman Z Score analysis. Note that the Realty Income Corp information on this page should be used as a complementary analysis to other Realty Income's statistical models used to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.

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Is Realty Income's industry expected to grow? Or is there an opportunity to expand the business' product line in the future? Factors like these will boost the valuation of Realty Income. If investors know Realty will grow in the future, the company's valuation will be higher. The financial industry is built on trying to define current growth potential and future valuation accurately. All the valuation information about Realty Income listed above have to be considered, but the key to understanding future value is determining which factors weigh more heavily than others.
Quarterly Earnings Growth YOY
0.3
Market Capitalization
42.2 B
Quarterly Revenue Growth YOY
0.83
Return On Assets
0.0203
Return On Equity
0.025
The market value of Realty Income Corp is measured differently than its book value, which is the value of Realty that is recorded on the company's balance sheet. Investors also form their own opinion of Realty Income's value that differs from its market value or its book value, called intrinsic value, which is Realty Income's true underlying value. Investors use various methods to calculate intrinsic value and buy a stock when its market value falls below its intrinsic value. Because Realty Income's market value can be influenced by many factors that don't directly affect Realty Income's underlying business (such as a pandemic or basic market pessimism), market value can vary widely from intrinsic value.
Please note, there is a significant difference between Realty Income's value and its price as these two are different measures arrived at by different means. Investors typically determine Realty Income value by looking at such factors as earnings, sales, fundamental and technical indicators, competition as well as analyst projections. However, Realty Income's price is the amount at which it trades on the open market and represents the number that a seller and buyer find agreeable to each party.