NNN REIT, Inc. (NNN): A Top High-Yield Dividend Stock for 2025 and Beyond

In a market where yield-hungry investors increasingly seek stability, National Retail Properties (NYSE: NNN) stands out as a beacon of consistent income generation. With a dividend yield of 6.1% as of May 2025, NNN has cemented its status as one of the premier high-yield REITs. This article explores why NNN remains a compelling investment, supported by decades of dividend growth, a robust property portfolio, and outperformance against major indices.

Dividend Strength: A 35-Year Streak of Relentless Growth

NNN’s dividend prowess is unmatched in its sector. The REIT has delivered 35 consecutive years of annual dividend increases, a feat shared by only two other publicly traded REITs. As of May 2025, shareholders receive $0.58 per share quarterly, translating to an annual payout of $2.32—a 2.98% increase from 2024. This reliability is underscored by a dividend cover ratio of 1.5, meaning earnings comfortably support payouts.

However, investors should note the payout ratio of 102.82%, which exceeds 100%. While this may raise eyebrows, REITs are required to distribute 90% of taxable income to shareholders, making this metric less concerning in this context. The REIT’s 30-year average annual total return of 11.3% further reinforces its long-term sustainability.

Financial Performance: Steady Growth Amid Market Volatility

NNN’s first-quarter 2025 results highlight its financial resilience:
- Adjusted Funds From Operations (AFFO) per share: $0.87, aligning with its $3.33–$3.38 AFFO guidance for 2025.
- Occupancy Rate: 97.7%, slightly down from 2024’s 98.5% but still robust.
- Portfolio Expansion: $232.4 million invested in 82 new properties, bolstering its 3,546-property portfolio across 49 states.

The weighted average lease term of 10 years ensures predictable cash flows, while tenant diversification—400+ tenants across 37 industries—minimizes sector-specific risk.

Note: The yield peaked at 8.9% in January 2025 and reached a low of 5.0% in July 2024, reflecting share price fluctuations.

Total Shareholder Return: Outperforming Over the Long Term

While NNN’s 1-year TSR of 5.3% (as of March 2025) trails the S&P 500’s 8.2%, its 30-year TSR of 11.3% crushes the index’s 10.5% over the same period. This consistency positions NNN as a defensive play for income-focused investors, as seen in its outperformance during volatile markets:

Risks and Considerations

• High Payout Ratio: While NNN’s payout exceeds earnings, its REIT structure and lease-driven cash flows mitigate risks.
• Occupancy Declines: The slight dip to 97.7% in Q1 2025 warrants monitoring, though it remains above industry averages.
• Interest Rate Sensitivity: Rising rates could pressure REIT valuations, but NNN’s long leases and disciplined capital allocation offer a buffer.

Conclusion: A Compelling Income Play for the Long Term

NNN REIT’s 6.1% dividend yield, 35-year growth streak, and fortress-like balance sheet make it a standout high-yield stock for 2025 and beyond. With a portfolio of 3,500+ properties anchored by long-term leases and a track record of outperforming indices over decades, investors can expect steady income and capital appreciation.

While the 102.82% payout ratio requires vigilance, NNN’s 11.3% 30-year total return and $3.33–$3.38 AFFO guidance for 2025 underscore its financial discipline. For those prioritizing dividends and stability, NNN remains a top-tier choice—a rare blend of high yield, longevity, and resilience in an uncertain market.