Attention dividend hunters! National Retail Properties Inc (NYSE:NNN) will be distributing its dividend of $0.48 per share on the 15 May 2018, and will start trading ex-dividend in 3 days time on the 27 April 2018. Investors looking for higher income-generating stocks to add to their portfolio should keep reading, as I examine National Retail Properties’s latest financial data to analyse its dividend characteristics. See our latest analysis for National Retail Properties
5 checks you should do on a dividend stock
Whenever I am looking at a potential dividend stock investment, I always check these five metrics:
- Is it the top 25% annual dividend yield payer?
- Has its dividend been stable over the past (i.e. no missed payments or significant payout cuts)?
- Has dividend per share amount increased over the past?
- Can it afford to pay the current rate of dividends from its earnings?
- Will it have the ability to keep paying its dividends going forward?
Does National Retail Properties pass our checks?
REITs are a special-case dividend payer. This is because a high percentage of their earnings are required to be paid out as dividends. The current trailing twelve-month payout ratio for NNN is 128.01%, meaning that a portion of dividend payments are funded by retained earnings. Going forward, analysts expect NNN’s payout to increase to 143.58% of its earnings, which leads to a dividend yield of around 5.37%. Furthermore, EPS should increase to $1.49. The higher payout forecasted, along with higher earnings, should lead to greater dividend income for investors moving forward. Reliablity is an important factor for dividend stocks, particularly for income investors who want a strong track record of payment and a positive outlook for future payout. NNN has increased its DPS from $1.5 to $1.9 in the past 10 years. It has also been paying out dividend consistently during this time, as you’d expect for a company increasing its dividend levels. This is an impressive feat, which makes NNN a true dividend rockstar. Relative to peers, National Retail Properties generates a yield of 5.07%, which is high for REITs stocks.
Taking into account the dividend metrics, National Retail Properties ticks most of the boxes as a strong dividend investment, putting it in my list of top dividend payers. Given that this is purely a dividend analysis, I urge potential investors to try and get a good understanding of the underlying business and its fundamentals before deciding on an investment. I’ve put together three important aspects you should look at:
- Future Outlook: What are well-informed industry analysts predicting for NNN’s future growth? Take a look at our free research report of analyst consensus for NNN’s outlook.
- Valuation: What is NNN worth today? Even if the stock is a cash cow, it’s not worth an infinite price. The intrinsic value infographic in our free research report helps visualize whether NNN is currently mispriced by the market.
- Other Dividend Rockstars: Are there better dividend payers with stronger fundamentals out there? Check out our free list of these great stocks here.
To help readers see pass the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned.