Realty Income (O -0.17%) is the most exciting high-yield dividend stock you can buy today. Few income stocks are as skilled at growing their operations as this one.

The real estate investment trust (REIT) leases freestanding commercial buildings, collecting roughly $4 billion in annual base rent, with 39% from investment-grade clients, including Walgreens, Dollar General, Dollar Tree, 7-Eleven, and FedEx.

The company's strong occupancy rate of 98.8% is proof of its skill at buying high-value commercial locations and then stacking them with stable paying clients.

When evaluating dividend safety, the first place to look is at a ratio looking at the company's current financial stability. The dividend payout ratio (which divides dividends paid out by funds from operations, or FFO) shows whether the company can sustain the dividend off its current cash flows. Generally speaking, I like to see a number under 80%, because the company still needs to be able to reinvest some cash in growing the business (and tuck away some for a rainy day).

Realty Income's dividend payout ratio is 74%, so the payout looks pretty safe to me.

Decades of growing earnings and dividends

Of course, dividend safety isn't just about maintaining the dividend. It's also about the company's ability to grow it further. Realty Income has grown steadily for decades due to its patience to hold cash until a great deal presents itself. Today, its strong liquidity provides it with the flexibility to make bold moves quickly. It's one of the most liquid REIT stocks in the S&P 500, with roughly $4.5 billion available at the end of last quarter.

Looking over Realty Income's history, you can see just how effective its opportunistic cash deployment strategy has been for the company and shareholders. Gross real estate book value grew from $565 million in 1996 to $42.6 billion in 2022, largely thanks to buying commercial properties in the U.S. But to achieve its next phase of growth, Realty Income is looking toward an exciting new market.

Realty Income's next big market

Europe is set to continue Reality Income's streak of growth because public net lease REITs account for less than 1% of the total European addressable market, according to the company, giving it plenty of room to expand there.

This REIT only has two peer competitors in Europe, compared to 12 in the United States, which means there is huge profit potential in acquiring European assets and converting them to net leases, and with very little competition.

When a property is converted to a net lease, it transfers the expense responsibilities to the tenant, providing the property owner with predictable and stable cash flow.

Realty Income has already made moves to expand into Europe, investing roughly $9 billion in the U.K., Spain, Italy, and Ireland since 2019, when it purchased multiple grocery stores in England, following two years later with seven properties in Spain. These moves could just be the beginning of bigger acquisitions to come.

The company has plenty of cash to buy more European properties when it sees the right opportunities, and this low-competition market could be the key to continuing its long streak of maintaining a 5%+ earnings compound annual growth rate since it went public.

It is highly likely we will see Realty Income take its successful "playbook" from the U.S. and apply it in Europe in the years to come.

A rare dividend stock

Many investors perceive dividend stocks as boring, but this REIT is the exact opposite. It has aggressive, high-growth plans that rival those of a non-dividend-paying company only focused on scale.

It has a three-decade track record of growing earnings and passing the rewards down in the form of dividends, even during difficult times. The company brags about having 26 out of 27 years with positive earnings per share growth and says it was one of 15 REITs in the S&P 500 to raise its dividend in 2020. It success during tough times such as the dot-com crash, the Great Recession, and the early days of the pandemic show its resilience.

On Jan. 9, the company announced its 643rd consecutive monthly common stock dividend. The dividend has been rising for 29 years in a row. The current monthly dividend works out to $3.078 per year, giving the stock a yield at its current price of about 5.8%.

Realty Income's expansion into Europe provides new acquisition opportunities with few competitors bidding up costs. This new business direction could provide Realty Income with another decade of growing earnings and rising dividends.

Realty Income's mastery of real estate growth makes it a unique REIT offering both steady income and growth potential.