NNN REIT's Q4 2025 Earnings and Long-Term Dividend Sustainability: A 36-Year Streak in a Shifting Economy

NNN REIT, Inc. (NNN) has long been a cornerstone of the REIT sector, celebrated for its 36-year streak of consecutive annual dividend increases-a feat achieved by only three publicly traded REITs. As the company prepares to release its Q4 2025 earnings on February 11, 2026, investors are keenly watching whether its financial performance and portfolio resilience can sustain this legacy amid macroeconomic headwinds.

Financial Performance: FFO, AFFO, and Occupancy Metrics

NNN's Q3 2025 results provide a glimpse into its operational strength. Core FFO (funds from operations) and AFFO (adjusted funds from operations) per share reached $0.85 and $0.86, respectively, reflecting 1.2% and 2.4% year-over-year growth. These metrics, critical for REITs, underscore the company's ability to generate cash flow despite inflationary pressures and rising interest rates.

Occupancy rates remain a standout. NNN maintained a 98.5% occupancy rate in 2024, with Q2 2025 data showing 98% occupancy across its 3,663 freestanding properties. This resilience is partly attributable to its triple-net lease structure, where tenants bear operating costs and maintenance, insulating NNN from many economic shocks.

Portfolio Resilience: Strategic Acquisitions and Tenant Management

NNN's disciplined capital deployment has been a key driver of its stability. In 2025, the company invested $283.0 million at a 7.3% initial cash cap rate, securing long-term value while maintaining a conservative 5.6x leverage ratio and $1.5 billion in pro forma liquidity. This approach contrasts with competitors reliant on low-cap-rate portfolio acquisitions, allowing NNN to capitalize on niche opportunities without overextending.

The company's proactive tenant management further bolsters its resilience. For instance, NNN resolved 19 of 35 Badcock Furniture leases at over 100% rent recovery and 28 of 64 Frisch's Restaurant properties at an average of 70% rent recovery. These efforts minimized FFO per share impacts and preserved occupancy above 96.4%, a level consistent with historical performance through economic cycles.

Dividend Sustainability: A 36-Year Streak in Context

NNN's dividend sustainability is underpinned by its 70% AFFO payout ratio and a 5.6% yield. The recent 3.4% increase to $0.60 per share aligns with its 36th consecutive annual raise, a testament to its balance between growth and prudence. However, the shifting economic environment-marked by higher borrowing costs and retail sector volatility-poses challenges. NNN's 10.7-year average debt duration and focus on long-term, credit-qualified tenants mitigate refinancing risks, ensuring the dividend remains well-supported.

Conclusion: A Model of Resilience

NNN REIT's Q4 2025 earnings will likely reaffirm its status as a dividend stalwart. With a 98% NOI margin, a 7.4% cash cap rate on new acquisitions, and a track record of navigating tenant distress, the company is uniquely positioned to sustain its dividend streak. For income-focused investors, NNN offers a compelling blend of stability and growth, even as the economy evolves.