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

AInvestThursday, Dec 12, 2024 10:07 pm ET
4min read


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.
Disclaimer: the above is a summary showing certain market information. AInvest is not responsible for any data errors, omissions or other information that may be displayed incorrectly as the data is derived from a third party source. Communications displaying market prices, data and other information available in this post are meant for informational purposes only and are not intended as an offer or solicitation for the purchase or sale of any security. Please do your own research when investing. All investments involve risk and the past performance of a security, or financial product does not guarantee future results or returns. Keep in mind that while diversification may help spread risk, it does not assure a profit, or protect against loss in a down market.