Reality Income Benefits as ARCP hit with Accounting Issues

Realty  Income (O) which is one of our favorite dividend growth stocks on the DividendGeek stock list share price appears to be benefiting from the recent accounting issues at American Realty Capital Properties (ARCP) as investors dump their ARCP shares for the safety of O. Shares of ARCP dropped 19% yesterday. It was down more than 30% during the day yesterday (Wed Oct 29) as downgrades rolled in.

There are not many things worst for a company then an accounting scandal. Fortunately I don’t own any shares of the high yielding ARCP because it does not meet our screening requirements as a dividend growth company. Although many traditional dividend investors who are primarily interested in high dividend yield own this company.

A word of caution many new “investors” make the mistake of jumping in on the low price looking to make a quick buck on an upswing. That’s extremely dangerous as I have seen these accounting issues drag on for two years as new details emerge and the price continues to drop. That’s the real problem with accounting issues as there is now little or no trust and confidence in the fundamentals of the company. You don’t know what you are buying.

Filed in: Company News