Is Realty Income Stock Halal?
How much of Realty Income’s revenue comes from haram?
Realty Income earns its revenue by renting out its portfolio of 6,500 properties to businesses.
Realty Income’s clients include Walgreens, 7-Eleven, Dollar General, FedEx, LA Fitness, CVS, and several other commercial clients.
Practical Islamic Finance concludes:
None of Realty Income’s revenue comes from anything inherently haram.
Does Realty Income rely on interest to operate?
| Year-to-Date for period ended 3/31/2021 | Fiscal year ended 12/31/2020 | Fiscal year ended 12/31/2019 | |
|---|---|---|---|
| Interest Income | – | – | – |
| Total Revenue | $442,804 | $1,651,625 | $1,651,625 |
| Interest Expense | $73,075 | $309,336 | $309,336 |
| Total Expenses | $309,300 | $1,326,117 | $1,086,364 |
| Interest Income / Revenue | – | – | – |
| Interest Expense / Total Expense | 23.63% | 23.33% | 28.47% |
Practical Islamic Finance concludes:
From the consistently elevated levels of Interest Expense / Total Expense, Riba is relied upon in Realty Income’s operations.
What is Realty Income’s Environmental, Social, and Governance (ESG) impact?
Environment
According to Realty Income, the company collaborates with its clients to install on-site solar and electric vehicle charging stations at its properties.
Social
Realty Income has a high Glassdoor rating of 4.2 out of 5.0 from current and previous employees compared to a 3.3 average for all other Glassdoor rated companies.
Governance
No notable governance highlights.
Practical Islamic Finance concludes:
Realty Income has a net positive ESG impact.
Comfort Rating
From Realty Income’s business, financial, and ESG reviews, Practical Islamic Finance rates Realty Income stock as:
Uncomfortable to invest in from a Halal perspective.
Justification for Our Rating
Realty Income’s consistent elevated use of interest to run its operations suggest a systemic reliance on interest which causes Practical Islamic Finance to be uncomfortable investing in it.