Dividend Payer National Retail Properties Shapes Base

By
A A A

National Retail Properties, a real-estate investment trust or REIT, has retaken its 50-day moving average as it approaches a 37.75 buy point of a saucer-with-handle base.

But the prospect of capital appreciation is just part of the stock's story.

National Retail Properties ( NNN ), based in Orlando, Fla., and a member of the S&P High Yield Dividend Aristocrats Index, has boosted its dividend for 25 straight years.

The latest increase was announced on July 15, when the company raised its quarterly payout by 1.5 cents, or 4%, to 42 cents a share. The annual dividend of $1.68 yields a juicy 4.5% at the current share price.

National Retail Properties says that it invests mainly in high-quality retail properties subject to long-term net leases. In a net lease, the tenant pays the landlord rent plus some or all of property expenses such as taxes, insurance and maintenance. Other net-lease REITs in IBD's dividend screen includeSpirit Realty Capital ( SRC ) andRealty Income ( O ), which was profiled in Thursday's IBD.

National Retail owns about 1,900 properties in 47 states covering 38 industries. Convenience stores account for about 20% of the properties leased, followed by full-service restaurants and auto-service businesses. Its occupancy rate rose 0.3 point to 98.5% in Q2.

Profit for the second quarter rose 4% to 51 cents a share, slowing from the prior quarter's 8% gain but in line with Wall Street forecasts. Revenue for the period increased 13% to $104.1 million, the smallest gain in five quarters but in line with the long-term trend.

The stock is up 22% this year, easily outpacing the S&P 500. It's currently 2% below the 37.75 buy point; but its Accumulation/Distribution Rating is C, indicating a standoff between buyers and sellers.

On July 25, Ladenburg downgraded the stock to neutral on valuation concerns.

National Retail says that risks include economic turmoil and disruption in capital markets, which could hurt tenants and depress property values.



The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.



This article appears in: Personal Finance , Investing Ideas

Referenced Stocks: NNN , SRC , O

Investor's Business Daily

Investor's Business Daily

More from Investor's Business Daily:

Related Videos

Stocks

Referenced

Most Active by Volume

106,679,460
  • $17.03 ▲ 0.47%
101,357,777
  • $38.65 ▼ 5.57%
61,830,117
  • $89.89 ▼ 4.26%
54,116,071
  • $5.11 ▼ 4.49%
50,121,934
  • $101.06 ▲ 0.10%
49,993,927
  • $3.52 ▼ 1.40%
47,717,687
  • $11.44 ▼ 4.67%
44,793,169
  • $99.05 ▼ 0.93%
As of 9/22/2014, 04:15 PM

Find a Credit Card

Select a credit card product by:
Select an offer:
Search
Data Provided by BankRate.com