Why National Retail Properties, Inc. (NNN) is a Top REIT Dividend Stock for 2024

National Retail Properties, Inc. (NNN) has long been a favorite among income-oriented investors, thanks to its consistent dividend growth and high yield. As we approach 2024, NNN remains an attractive choice for those seeking reliable dividend income and long-term growth. Here's why NNN is among the best REIT dividend stocks to buy for 2024.

NNN's diversified portfolio of high-quality retail properties, subject generally to long-term, net leases, contributes significantly to its dividend stability and growth. As of December 31, 2023, the company owned 3,532 properties in 49 states, with a gross leasable area of approximately 36.0 million square feet and a weighted average remaining lease term of 10.1 years. This diversified portfolio and long-term leases ensure a steady income stream, allowing NNN to maintain and increase its dividends.



NNN's conservative financial management, as evidenced by its low debt-to-equity ratio of 0.21, enables it to weather economic downturns and continue paying dividends. The company's strong operating performance, with an operating margin of 62.83% and a profit margin of 45.55% in 2023, demonstrates its ability to generate sufficient cash flow to support its dividend payouts.

NNN's dividend payout ratio of 70.38% is relatively high compared to the average REIT payout ratio of around 60%. However, this ratio is still lower than many other REITs, such as Realty Income (O) with a payout ratio of 85%. In the broader market, the average payout ratio is around 50%. NNN's higher payout ratio indicates a more generous dividend distribution to shareholders, making it an attractive choice for income-oriented investors.

NNN's long-term, net lease agreements play a crucial role in ensuring consistent cash flow and dividend payments. These leases, typically spanning 10 to 20 years, provide a stable and predictable revenue stream. Tenants are responsible for most operating expenses, including property taxes, insurance, and maintenance, reducing NNN's overhead costs. This structure allows NNN to maintain a high dividend payout ratio and reliable income for shareholders.

In conclusion, NNN's diversified portfolio of high-quality retail properties, conservative financial management, strong operating performance, and high dividend payout ratio make it an attractive choice for income-oriented investors seeking reliable dividend income and long-term growth. As we approach 2024, NNN remains a top REIT dividend stock to consider for your portfolio.