Retail REITs to Buy: National Retail Properties (NNN)
Dividend Yield: 4.8%
What do convenience stores, restaurants and auto service stores have in common? They’re pretty much internet-proof.
And they all happen to be primary tenants of National Retail Properties (NYSE:NNN).
National Retail Properties’ portfolio includes more than 2,500 locations across the company, with single-tenant retail comprising the vast bulk of those properties. Whether it’s Sunoco LP (NYSE:SUN) gas stations, LA Fitness gyms or just your neighborhood 7-Eleven, NNN’s portfolio diversity is vast.
There’s also no sign of retail dying here. This REIT’s locations have an insane occupancy rate of 99%. That comes from NNN’s focus on quality tenants in prime areas.
What’s even better is that National Retail Properties operates in the holy-grail of REITs — triple-net leased properties. This pushes the responsibility of taxes, maintenance and other fees associated with renting the property onto the tenants. NNN sits back and collects a bigger check as a result.
This produces a steady stream of cash that funds a solid, growing dividend. National Retail Properties has improved its payout every year for the past 27 years, and that won’t stop anytime soon. Meanwhile, roughly 30% losses since last summer have put NNN on discount and boosted the yield to nearly 5%.