Is NNN's 5.6% Dividend Yield Safe? A Beginner's Checklist

Benzinga_recent_news01-31

If you’re new to dividend investing, a 5.6% yield can look attractive—especially when it comes from a company that has raised its payout for 36 consecutive years. But yield alone doesn’t tell the full...

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But yield alone doesn’t tell the full...</p>\n\n<a href=\"https://www.benzinga.com/Opinion/26/01/50280434/is-nnn-dividend-yield-safe-a-beginners-checklist\">Source Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","isBrief":false,"type":0,"news_type":1,"symbol":"LU0823426480.USD","symbol_name":"法巴中国股票经典Dis","start_time":0,"source_url":"https://www.benzinga.com/Opinion/26/01/50280434/is-nnn-dividend-yield-safe-a-beginners-checklist","article_id":"2607029397","we_media_id":null,"thumbnails":["https://static.tigerbbs.com//next-assets/images/benzinga-post-card-placeholder.svg?optimize=medium&dpr=2&auto=webp&width=240?op=imageView2&mode=2&width=256&height=256&quality=70&format=png"],"rights":{"source":"benzinga_recent_news","url":"https://www.benzinga.com/Opinion/26/01/50280434/is-nnn-dividend-yield-safe-a-beginners-checklist","rn_cache_url":null,"directOrigin":true},"url":"https://stock-news.laohu8.com/highlight/detail?id=2607029397","pubTimestamp":1769803740,"columns":[],"sourceInfo":{"source_id":"benzinga_recent_news","name":"Benzinga"},"weMediaInfo":null,"summary":"If you’re new to dividend investing, a 5.6% yield can look attractive—especially when it comes from a company that has raised its payout for 36 consecutive years. But yield alone doesn’t tell the full story. The question isn’t just “how much does it pay?”But even stable-looking companies can cut dividends when the math stops working. This checklist walks through four metrics that help determine whether NNN’s dividend sits on solid ground—or shaky soil.Before diving into the numbers, it helps to understand NNN’s business model.In a typical lease, landlords pay for property taxes, insurance, and maintenance. In a net lease, tenants pay those costs instead. This structure gives NNN predictable cash flows with minimal operating expenses—ideal for sustaining dividends.NNN’s tenants sign leases averaging 10.1 years in length, with built-in annual rent increases averaging 1.5%. This creates a long runway of predictable income, assuming tenants stay healthy.A long track record doesn’t guarante","collect":0,"end_time":0,"defaultTopTitle":"benzinga.com","property":[],"viewcount":null,"language":"en","relate_stocks":{"LU0823426480.USD":"法巴中国股票经典Dis","LU0188438112.USD":"SCHRODER ISF ASIAN EQUITY YIELD \"A\" ACC","LU0588546209.SGD":"Eastspring Investments - China Equity Fund AS SGD","LU2242644610.SGD":"Fidelity China Innovation A-ACC-SGD","LU0593848301.USD":"未来资产亚洲卓越消费股票基金A","LU0823426308.USD":"法巴中国股票基金","LU0737861699.HKD":"FIDELITY CHINA FOCUS \"A \" (HKD) ACC","LU0348788117.USD":"ALLIANZ EMERGING ASIA EQUITY \"A\" (USD) INC","NNN":"NNN REIT INC","LU0106259558.USD":"SCHRODER ISF ASIAN OPPORTUNITIES \"A\" ACC","LU0588545904.SGD":"Eastspring Investments - Asian Equity Income ASDM SGD","LU1981816686.USD":"EASTSPRING INV ASIAN MULTI FACTOR EQUITY \"A\" (USD) ACC","LU1956131251.USD":"BNP PARIBAS SUSTAINABLE ASIA EX-JAPAN EQUITY \"C\"MD (USD) INC","IE00B8HQ1Z84.USD":"BNY MELLON GLOBAL EMERGING MARKETS OPPORTUNITIES \"A\" (USD) ACC","LU0054450605.USD":"HSBC GIF GLOBAL EMERGING MARKTS EQ \"AD\" INC","LU0049853897.USD":"SCHRODER ISF EMERGING MARKETS \"A\" (USD) INC AV","LU0878004406.USD":"UBS (LUX) KEY SELEC ASIA ALLOCATION OPPORTUNITY (USD) \"P\" (USD) INC","LU0588545730.USD":"EASTSPRING INVESTMENTS ASIAN EQUITY INCOME \"ADM\" (USD) INC","LU1224709979.USD":"FIDELITY CHINA FOCUS \"A\" (USD) ACC","LU0370786039.SGD":"Fidelity Greater China A-SGD","LU0819121731.USD":"HSBC GIF MANAGED SOLUTIONS ASIA FOCUSED GROWTH \"AC\" (USD) ACC","LU0140636845.USD":"施罗德大中华区股票A Acc","LU0048597586.USD":"富达亚洲焦点A","LU0650527681.SGD":"Fidelity China Consumer A-SGD","LU0449509016.USD":"HSBC GIF BRIC EQUITY \"AC\" (USD) ACC","LU0054237671.USD":"FIDELITY ASIAN SPECIAL SITUATIONS \"A\" INC","LU0594300179.USD":"FIDELITY CHINA CONSUMER \"A\" (USD) ACC","LU0181495838.USD":"施罗德新兴亚洲A Acc","LU0214875030.USD":"HSBC GIF BRIC EQUITY \"M2C\" (USD) ACC","LU0251144936.SGD":"Fidelity Sustainable Asia Equity A-SGD","LU0823413587.USD":"BNP PARIBAS EMERGING EQUITY \"C\" (USD) ACC","LU0192582467.USD":"SCHRODER ISF ASIAN EQUITY YIELD \"A\" (USD) INC MF","LU0231483743.USD":"abrdn SICAV I - ALL CHINA SUSTAINABLE EQUITY \"A\" (USD) ACC","LU0307460666.USD":"EASTSPRING INVESTMENTS CHINA EQUITY \"A\" ACC","LU0589944569.HKD":"ALLIANZ EMERGING ASIA EQUITY \"AT\" (HKD) ACC","LU0871576103.HKD":"HSBC GIF CHINESE EQUITY \"AC\" (HKD) ACC","LU0164865239.USD":"HSBC GIF CHINESE EQUITY \"AC\" (USD) ACC","LU1048596156.SGD":"Blackrock Asian Growth Leaders A2 SGD-H","LU0165289439.USD":"HSBC GIF ASIA EX JAPAN EQUITY \"AC\" ACC","LU1769817096.USD":"UBS (LUX) EQUITY SICAV - GLOBAL EMERG MARKETS OPPO \"P\" (USD) INC","IE0008369823.USD":"FSSA HONG KONG GROWTH \"I\" ACC","LU0821914370.USD":"贝莱德亚洲成长领袖A2","IE00B8L5B284.USD":"BNY MELLON GLOBAL EMERGING MARKETS OPPORTUNITIES \"B\" (USD) INC","LU0502904849.HKD":"FIDELITY FUNDS  CHINA INNOVATION \"A\" (HKD) ACC","BK4080":"零售业房地产投资信托","LU0823413660.USD":"BNP PARIBAS EMERGING EQUITY \"C\" (USD) INC","LU0228367735.SGD":"Eastspring Investments - Asian Equity Fund AS SGD","IE00B0169L03.USD":"FSSA ASIA FOCUS FUND \"I\" (USD) ACC","LU0259732245.USD":"EASTSPRING INVESTMENTS DRAGON PEACOCK A","LU0164872284.USD":"HSBC GIF GLOBAL EMERGING MARKETS EQUITY \"A\" (USD) ACC"},"translate_title":"NNN 5.6%的股息收益率安全吗？初学者清单","themeId":null,"isJumpTheme":false,"ttsUrl":null,"symbols_score_info":{"NNN":1.5},"content_text":"If you’re new to dividend investing, a 5.6% yield can look attractive—especially when it comes from a company that has raised its payout for 36 consecutive years. But yield alone doesn’t tell the full story. The question isn’t just “how much does it pay?” but “can it keep paying?”\nBut even stable-looking companies can cut dividends when the math stops working. This checklist walks through four metrics that help determine whether NNN’s dividend sits on solid ground—or shaky soil.\nWhat Is a Net Lease REIT?\nBefore diving into the numbers, it helps to understand NNN’s business model.\nIn a typical lease, landlords pay for property taxes, insurance, and maintenance. In a net lease, tenants pay those costs instead. This structure gives NNN predictable cash flows with minimal operating expenses—ideal for sustaining dividends.\nNNN’s tenants sign leases averaging 10.1 years in length, with built-in annual rent increases averaging 1.5%. This creates a long runway of predictable income, assuming tenants stay healthy.\nNow, let’s check the numbers.\n1. Credit Rating: BBB+ (S&P) / Baa1 (Moody’s)\nA credit rating measures a company’s ability to repay debt. Ratings of BBB- and above are considered “investment grade”—meaning institutional investors like pension funds and insurance companies can hold these bonds.\nNNN holds a BBB+ rating from S&P and Baa1 from Moody’s (latest publicly confirmed ratings). Both are solidly investment grade.\nWhy does this matter for dividends? If a REIT’s rating falls below BBB-, two things happen:\nThis “forced selling” can trigger a downward spiral in stock price and make it harder for the company to raise capital. Dividend cuts often follow.\nNNN sits two notches above that BBB- cliff. It’s not a wide buffer, but it’s a buffer.\nSource: S&P Global Ratings (June 2025 affirmation)\n2. AFFO Payout Ratio: 70%\nAFFO stands for Adjusted Funds From Operations. Think of it as the cash a REIT generates after maintaining its properties—essentially, the money available to pay dividends.\nIn Q3 2025, NNN reported AFFO of $0.86 per share and paid a $0.60 quarterly dividend. Divide 0.60 by 0.86, and you get a 70% payout ratio.\nWhat does 70% mean? It means NNN keeps 30 cents of every dollar it earns. That retained cash can be used to pay down debt, acquire new properties, or cushion against unexpected vacancies.\nPayout ratios above 85% start raising red flags. At 90% or higher, there’s little room for error—one bad quarter could force a dividend cut.\nAt 70%, NNN has a 15-percentage-point cushion before reaching dangerous territory.\nSource: NNN REIT Q3 2025 Earnings Release (November 4, 2025)\n3. Dividend Track Record: 36 Years of Consecutive Increases\nNNN has increased its annual dividend every year since 1989. NNN is one of only three publicly traded REITs to have increased annual dividends for 36 or more consecutive years.\nA long track record doesn’t guarantee future increases. Companies can—and do—break their streaks when conditions deteriorate. But 36 years of consecutive raises tells you something about management’s priorities: they view the dividend as sacred.\nThis matters because dividend cuts destroy shareholder trust. Once a company cuts, investors often assume another cut is coming. Stock prices fall, cost of capital rises, and a negative cycle begins.\nNNN’s management has navigated recessions, interest rate spikes, and tenant bankruptcies without breaking the streak. That history earns some benefit of the doubt.\nSource: NNN REIT Official Announcement\n4. Occupancy: 97.5%\nOccupancy measures the percentage of NNN’s properties that are currently leased and generating rent. As of September 30, 2025, that number stood at 97.5%.\nThis is slightly below NNN’s historical average, which typically hovers around 98-99%. The dip came from proactive asset repositioning—essentially, NNN choosing to exit certain underperforming properties rather than waiting for problems to escalate.\nManagement expects occupancy to recover above 98% by year-end 2025. This still leaves NNN well within its historical comfort range.\nWhy does occupancy matter? Empty properties generate zero rent but still incur costs. If occupancy drops below 95%, the math starts working against dividend sustainability.\nAt 97.5%, NNN maintains a 2.5-percentage-point buffer above that threshold.\nSource: NNN REIT Q3 2025 Earnings Release\nBonus Check: Debt Maturity Profile\nOne hidden risk for REITs is debt refinancing. If a company has billions coming due next year, it might have to refinance at much higher rates—squeezing cash flow and threatening dividends.\nNNN is well-positioned here. The weighted average maturity of its debt is approximately 10.7 years as of Q3 2025. This means NNN has locked in its borrowing costs for over a decade. When the Fed raises rates, NNN doesn’t feel the pain immediately.\nSource: NNN REIT Q3 2025 Earnings Release\nWhat Would Change This Picture?\nThe checklist looks solid today. But conditions change. Here’s what to watch:\nNone of these conditions exist today. But they’re the early warning signals that separate proactive investors from surprised ones.\nThe Checklist Summary\nBottom Line\nNNN’s 5.6% yield comes with real structural support: an investment-grade credit rating, a conservative 70% payout ratio, a 36-year dividend growth streak, and occupancy that remains above 97%.\nThe buffers aren’t enormous. Two notches of credit cushion isn’t huge. But for a company with NNN’s track record and business model, the current setup suggests the dividend is sustainable—unless something fundamental changes.\nFor beginners, this checklist provides a repeatable way to evaluate dividend safety—before relying on yield alone.\nBenzinga Disclaimer: This article is from an unpaid external contributor. It does not represent Benzinga’s reporting and has not been edited for content or accuracy.","kind":"highlight","is_publish_news":true,"is_publish_highlight":false,"is_publish_live":false,"is_publish_wemedia":null,"editions":null,"column":"","sentiment":"0","news_tag":"","news_rank":0,"symbols":[],"gpt_button":0,"need_auth":false,"code":"91000000","status":"200"},"commentList":[],"isCommentEnd":true,"newsSizeData":{"likeSize":0,"commentSize":0,"repostSize":0,"favoriteSize":0,"likeStatus":false,"favoriteStatus":false},"APP":{"userAgent":"Mozilla/5.0 AppleWebKit/537.36 (KHTML, like Gecko; compatible; ClaudeBot/1.0; +claudebot@anthropic.com)","isDev":false,"isTTM":true,"tenantId":"TBGLOBAL","deviceId":"web-server-community-laohu8-v3","version":"4.36.2","shortVersion":"4.36.2","platform":"web","vendor":"web","appName":"ttm","isIOS":false,"isAndroid":false,"isTiger":false,"isTHS":false,"isWeiXin":false,"isWeiXinMini":false,"isWeiBo":false,"isQQ":false,"isBaiduSwan":false,"isBaiduBox":false,"isDingTalk":false,"isToutiao":false,"isOnePlus":false,"isHuaWei":false,"isXiaomi":false,"isXiaomiWebView":false,"isOppo":false,"isVivo":false,"isSamsung":false,"isMobile":false},"href":"/m/news/2607029397","isCrawlerRequest":true}