This 5%-Yielding Real Estate Stock Raised Its Dividend in Each of the Past 4 Recessions
NNN REIT (NYSE: NNN) has quietly put together a terrific record of paying dividends. The retail-focused real estate investment trust (REIT) delivered its first dividend increase to shareholders in 1990. It hasn't stopped raising its payout since then and recently notched its 35th straight year of dividend growth.
That's an impressive record, considering that we've had four recessions during the period. Economic downturns tend to be times when companies grow more conservative by either pausing dividend growth or cutting their payouts to conserve cash. It's why only two other REITs and less than 80 publicly traded companies have reached that milestone. Here's a look at what has allowed the retail REIT to continue pushing its payout -- currently yielding 5% -- higher and why that steady upward trend seems likely to continue.
NNN REIT has a very simple strategy. The REIT invests in single-tenant net-leased retail properties across the country. The company signs long-term, triple net leases (NNN) with high-quality retailers. That lease structure produces very stable rental income because it requires the tenant to cover building insurance, maintenance, and real estate taxes. These leases also typically feature annual rental rate escalation clauses that drive steady rent growth.
Source Fool.com
