NNN - NNN REIT: Buy This Dividend Aristocrat Before Yields Decline

2024-06-04 08:50:20 ET

Summary

• NNN REIT is a net lease REIT focused on small properties leased to various tenants, making it resilient against retail trends.
• NNN has a 34-year track record of increasing dividends and is one of only five REITs with the Dividend Aristocrat title.
• The company has highly predictable cash flow, a stable balance sheet, and an aggressive acquisition strategy, making it an attractive investment option.

Dear readers,

NNN REIT ( NNN ) is a net lease REIT similar to its better-known peer Realty Income ( O ). Similarly to Realty Income, NNN focuses on small net lease properties, with an average asset size under $5 million, leased to a variety of tenants such as casual restaurants, car washes, gyms, and convenience stores. These small properties have a major advantage compared to big box properties, such as the ones that Agree Realty ( ADC ) focuses on, in that they are more fungible, have a bigger pool of potential deals, and often result in better lease terms for the landlord due to lower bargaining power of tenants. Moreover, the diversified tenant mix, combined with industry-leading operational metrics (more on this later), should make the company resilient in case of a potential recession, as well as against the e-commerce trend threatening retail....

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