company background image
NNN

National Retail Properties NYSE:NNN Stock Report

Last Price

US$39.86

Market Cap

US$7.1b

7D

-4.1%

1Y

-10.4%

Updated

30 Sep, 2022

Data

Company Financials +

National Retail Properties Competitors

Price History & Performance

Summary of all time highs, changes and price drops for National Retail Properties
Historical stock prices
Current Share PriceUS$39.86
52 Week HighUS$48.90
52 Week LowUS$38.91
Beta0.83
1 Month Change-11.23%
3 Month Change-10.41%
1 Year Change-10.37%
3 Year Change-30.06%
5 Year Change-4.41%
Change since IPO398.25%

Recent News & Updates

Sep 02

National Retail Properties: Stack This 5% Yield Onto Your Dividend Portfolio

Summary National Retail Properties is a high-quality net lease REIT with a long history of dividend growth and bottom line growth. NNN maintains a strong balance sheet and a diversified portfolio of e-commerce resistant tenants. The shares are attractively priced at the moment, especially considering the robust bottom line growth expected this year. I like high yield stocks as much as anyone else, and see value in beaten down names such as Medical Properties Trust (MPW), Capital Southwest (CSWC), and Altria (MO). However, diversification is key to sleeping well at night, and I also reserve a part of my portfolio for middle of the road yields like National Retail Properties (NNN) that provide a good mix of safety and income. Stocks like NNN are good core holdings to have in a portfolio for their durable income characteristics, and in this article, I highlight why the current down cycle presents a great opportunity to layer into this quality name, so let's get started. Why NNN? National Retail Properties is a truly "national" triple net lease REIT with a diverse high-quality portfolio of 3,305 properties that span across 48 states in the contiguous U.S. It has over 380 tenants and this includes long-standing relationships, with its top 25 tenants representing 56% of NNN's annual rent. NNN is led by an experienced management team, with an average 21-year tenure in the senior leadership team. Moreover, 61% of NNN's employees have been with the company for over 5 years. Like its peer, NNN is also a dividend aristocrat, with 33 consecutive years of raises under its belt, including the recent 3.8% raise to $0.55 per share. NNN's national tenant base is comprised mostly of e-commerce resistant tenants in service, experiential, and the quick service restaurant categories. This has enabled NNN to generate rather steady results, even during the tumultuous 2020 timeframe. Since 2003, NNN's occupancy has never fallen below 96.4%, averaging 98.0% over this time period. At present, NNN's occupancy stands at a very healthy 99.1%. NNN Portfolio Mix (Investor Presentation) NNN also maintains long-weighted average lease term of 10.6 years, putting it on par with that of other retail net lease REITs, and its leases are well-staggered, with only 5.9% of leases expiring through 2024. NNN has also been an active consolidator, as it acquired 102 properties in the first half of the year for $365 million with an attractive initial cash yield of 6.2%. Importantly, NNN's bottom line is growing robustly, as first half core FFO per share grew by 11.4% compared to last year. It appears management is showing no signs of slowing down, as it raised guidance three times year. The latest guidance raised core FFO per share from $3.04 at the midpoint to $3.10. Meanwhile, NNN is also not totally dependent on capital markets to fund growth, as it maintains plenty of retained capital. This is reflected by the 68% payout ratio, based on the recently raised $0.55 dividend and Q2 AFFO per share of $0.81. It also maintains a strong BBB+ rated balance sheet, with a 14-year weighted average debt maturity with little near-term maturities. Net debt to EBITDA is at a safe 5.4x and fixed charge coverage ratio is at 4.7x. Management expects to see $180 million in cash flow after dividends and $100 million per year from dispositions, which goes a long way towards funding its $600-700 million a year in acquisitions. Factors that could drive the share price down include general market volatility and the prospect for higher interest rates, which may drive negative investor sentiment towards perceived "slow-growing" net lease REITs. However, higher interest rates are not necessarily a bad thing, as that results in less competition from highly leveraged players that rely more on debt. This is supported by management comments during the recent conference call, noting less competition from private equity players in the 6-7 percent cap rate range on new acquisitions.

Shareholder Returns

NNNUS REITsUS Market
7D-4.1%-4.1%-2.5%
1Y-10.4%-20.4%-23.2%

Return vs Industry: NNN exceeded the US REITs industry which returned -20.3% over the past year.

Return vs Market: NNN exceeded the US Market which returned -21.5% over the past year.

Price Volatility

Is NNN's price volatile compared to industry and market?
NNN volatility
NNN Average Weekly Movement3.0%
REITs Industry Average Movement4.1%
Market Average Movement6.9%
10% most volatile stocks in US Market15.6%
10% least volatile stocks in US Market2.8%

Stable Share Price: NNN is less volatile than 75% of US stocks over the past 3 months, typically moving +/- 3% a week.

Volatility Over Time: NNN's weekly volatility (3%) has been stable over the past year.

About the Company

FoundedEmployeesCEOWebsite
198472Steve Hornhttps://www.nnnreit.com

National Retail Properties invests primarily in high-quality retail properties subject generally to long-term, net leases. As of September 30, 2020, the company owned 3,114 properties in 48 states with a gross leasable area of approximately 32.4 million square feet and with a weighted average remaining lease term of 10.7 years.

National Retail Properties Fundamentals Summary

How do National Retail Properties's earnings and revenue compare to its market cap?
NNN fundamental statistics
Market CapUS$7.06b
Earnings (TTM)US$298.44m
Revenue (TTM)US$748.68m

23.7x

P/E Ratio

9.4x

P/S Ratio

Earnings & Revenue

Key profitability statistics from the latest earnings report
NNN income statement (TTM)
RevenueUS$748.68m
Cost of RevenueUS$27.41m
Gross ProfitUS$721.27m
Other ExpensesUS$422.83m
EarningsUS$298.44m

Last Reported Earnings

Jun 30, 2022

Next Earnings Date

n/a

Earnings per share (EPS)1.69
Gross Margin96.34%
Net Profit Margin39.86%
Debt/Equity Ratio96.7%

How did NNN perform over the long term?

See historical performance and comparison

Dividends

5.5%

Current Dividend Yield

67%

Payout Ratio
We’ve recently updated our valuation analysis.

Valuation

Is NNN undervalued compared to its fair value, analyst forecasts and its price relative to the market?

Valuation Score

5/6

Valuation Score 5/6

  • Price-To-Earnings vs Peers

  • Price-To-Earnings vs Industry

  • Price-To-Earnings vs Fair Ratio

  • Below Fair Value

  • Significantly Below Fair Value

  • Analyst Forecast

Key Valuation Metric

Which metric is best to use when looking at relative valuation for NNN?

Other financial metrics that can be useful for relative valuation.

NNN key valuation metrics and ratios. From Price to Earnings, Price to Sales and Price to Book to Price to Earnings Growth Ratio, Enterprise Value and EBITDA.
Key Statistics
Enterprise Value/Revenue14.5x
Enterprise Value/EBITDA16x
PEG Ratio3.9x

Price to Earnings Ratio vs Peers

How does NNN's PE Ratio compare to its peers?

NNN PE Ratio vs Peers
The above table shows the PE ratio for NNN vs its peers. Here we also display the market cap and forecasted growth for additional consideration.
CompanyPEEstimated GrowthMarket Cap
Peer Average22x
FRT Federal Realty Investment Trust
26.9x8.3%US$7.3b
REG Regency Centers
19x-6.2%US$9.3b
BRX Brixmor Property Group
18.8x1.6%US$5.5b
SRC Spirit Realty Capital
23.1x4.0%US$4.9b
NNN National Retail Properties
23.7x6.0%US$7.1b

Price-To-Earnings vs Peers: NNN is expensive based on its Price-To-Earnings Ratio (23.7x) compared to the peer average (22x).


Price to Earnings Ratio vs Industry

How does NNN's PE Ratio compare vs other companies in the US REITs Industry?

Price-To-Earnings vs Industry: NNN is good value based on its Price-To-Earnings Ratio (23.7x) compared to the US REITs industry average (25.5x)


Price to Earnings Ratio vs Fair Ratio

What is NNN's PE Ratio compared to its Fair PE Ratio? This is the expected PE Ratio taking into account the company's forecast earnings growth, profit margins and other risk factors.

NNN PE Ratio vs Fair Ratio.
Fair Ratio
Current PE Ratio23.7x
Fair PE Ratio38x

Price-To-Earnings vs Fair Ratio: NNN is good value based on its Price-To-Earnings Ratio (23.7x) compared to the estimated Fair Price-To-Earnings Ratio (38x).


Share Price vs Fair Value

What is the Fair Price of NNN when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

Below Fair Value: NNN ($39.86) is trading below our estimate of fair value ($103.59)

Significantly Below Fair Value: NNN is trading below fair value by more than 20%.


Analyst Price Targets

What is the analyst 12-month forecast and do we have any statistical confidence in the consensus price target?

Analyst Forecast: Target price is more than 20% higher than the current share price and analysts are within a statistically confident range of agreement.


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Future Growth

How is National Retail Properties forecast to perform in the next 1 to 3 years based on estimates from 8 analysts?

Future Growth Score

1/6

Future Growth Score 1/6

  • Earnings vs Savings Rate

  • Earnings vs Market

  • High Growth Earnings

  • Revenue vs Market

  • High Growth Revenue

  • Future ROE


6.0%

Forecasted annual earnings growth

Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: NNN's forecast earnings growth (6% per year) is above the savings rate (1.9%).

Earnings vs Market: NNN's earnings (6% per year) are forecast to grow slower than the US market (14.7% per year).

High Growth Earnings: NNN's earnings are forecast to grow, but not significantly.

Revenue vs Market: NNN's revenue (6.4% per year) is forecast to grow slower than the US market (7.6% per year).

High Growth Revenue: NNN's revenue (6.4% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: NNN's Return on Equity is forecast to be low in 3 years time (8.2%).


Discover growth companies

Past Performance

How has National Retail Properties performed over the past 5 years?

Past Performance Score

4/6

Past Performance Score 4/6

  • Quality Earnings

  • Growing Profit Margin

  • Earnings Trend

  • Accelerating Growth

  • Earnings vs Industry

  • High ROE


2.4%

Historical annual earnings growth

Earnings and Revenue History

Quality Earnings: NNN has high quality earnings.

Growing Profit Margin: NNN's current net profit margins (39.9%) are higher than last year (33.5%).


Past Earnings Growth Analysis

Earnings Trend: NNN's earnings have grown by 2.4% per year over the past 5 years.

Accelerating Growth: NNN's earnings growth over the past year (30.7%) exceeds its 5-year average (2.4% per year).

Earnings vs Industry: NNN earnings growth over the past year (30.7%) underperformed the REITs industry 45.8%.


Return on Equity

High ROE: NNN's Return on Equity (8.1%) is considered low.


Discover strong past performing companies

Financial Health

How is National Retail Properties's financial position?

Financial Health Score

2/6

Financial Health Score 2/6

  • Short Term Liabilities

  • Long Term Liabilities

  • Debt Level

  • Reducing Debt

  • Debt Coverage

  • Interest Coverage

Financial Position Analysis

Short Term Liabilities: NNN's short term assets ($41.9M) exceed its short term liabilities ($23.2M).

Long Term Liabilities: NNN's short term assets ($41.9M) do not cover its long term liabilities ($3.9B).


Debt to Equity History and Analysis

Debt Level: NNN's net debt to equity ratio (96.7%) is considered high.

Reducing Debt: NNN's debt to equity ratio has increased from 68.6% to 96.7% over the past 5 years.

Debt Coverage: NNN's debt is not well covered by operating cash flow (14.9%).

Interest Coverage: NNN's interest payments on its debt are well covered by EBIT (3.2x coverage).


Balance Sheet


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Dividend

What is National Retail Properties's current dividend yield, its reliability and sustainability?

Dividend Score

6/6

Dividend Score 6/6

  • Notable Dividend

  • High Dividend

  • Stable Dividend

  • Growing Dividend

  • Earnings Coverage

  • Cash Flow Coverage


5.52%

Current Dividend Yield

Dividend Yield vs Market

National Retail Properties Dividend Yield vs Market
How does National Retail Properties dividend yield compare to the market?
SegmentDividend Yield
Company (National Retail Properties)5.5%
Market Bottom 25% (US)1.7%
Market Top 25% (US)4.7%
Industry Average (REITs)4.1%
Analyst forecast in 3 Years (National Retail Properties)5.7%

Notable Dividend: NNN's dividend (5.52%) is higher than the bottom 25% of dividend payers in the US market (1.66%).

High Dividend: NNN's dividend (5.52%) is in the top 25% of dividend payers in the US market (4.7%)


Stability and Growth of Payments

Stable Dividend: NNN's dividends per share have been stable in the past 10 years.

Growing Dividend: NNN's dividend payments have increased over the past 10 years.


Earnings Payout to Shareholders

Earnings Coverage: With its reasonable payout ratio (67%), NNN's dividend payments are covered by earnings.


Cash Payout to Shareholders

Cash Flow Coverage: With its reasonable cash payout ratio (69.2%), NNN's dividend payments are covered by cash flows.


Discover strong dividend paying companies

Management

How experienced are the management team and are they aligned to shareholders interests?

11.5yrs

Average management tenure


CEO

Steve Horn (50 yo)

0.50yr

Tenure

US$3,189,194

Compensation

Mr. Stephen A. Horn, Jr. also known as Steve, serves as President and Chief Executive Officer of National Retail Properties, Inc. since April 2022. He served as Chief Operating Officer at National Retail P...


CEO Compensation Analysis

Steve Horn's Compensation vs National Retail Properties Earnings
How has Steve Horn's remuneration changed compared to National Retail Properties's earnings?
DateTotal Comp.SalaryCompany Earnings
Jun 30 2022n/an/a

US$298m

Mar 31 2022n/an/a

US$293m

Dec 31 2021US$3mUS$515k

US$264m

Sep 30 2021n/an/a

US$255m

Jun 30 2021n/an/a

US$228m

Mar 31 2021n/an/a

US$202m

Dec 31 2020US$2mUS$435k

US$210m

Sep 30 2020n/an/a

US$212m

Jun 30 2020n/an/a

US$218m

Mar 31 2020n/an/a

US$247m

Dec 31 2019US$2mUS$400k

US$258m

Sep 30 2019n/an/a

US$227m

Jun 30 2019n/an/a

US$242m

Mar 31 2019n/an/a

US$234m

Dec 31 2018US$2mUS$345k

US$258m

Sep 30 2018n/an/a

US$293m

Jun 30 2018n/an/a

US$272m

Mar 31 2018n/an/a

US$260m

Dec 31 2017US$2mUS$335k

US$217m

Sep 30 2017n/an/a

US$207m

Jun 30 2017n/an/a

US$196m

Mar 31 2017n/an/a

US$190m

Dec 31 2016US$2mUS$325k

US$200m

Sep 30 2016n/an/a

US$180m

Jun 30 2016n/an/a

US$184m

Mar 31 2016n/an/a

US$178m

Dec 31 2015US$1mUS$300k

US$162m

Compensation vs Market: Steve's total compensation ($USD3.19M) is below average for companies of similar size in the US market ($USD8.64M).

Compensation vs Earnings: Steve's compensation has increased by more than 20% in the past year.


Leadership Team

Experienced Management: NNN's management team is seasoned and experienced (11.5 years average tenure).


Board Members

Experienced Board: NNN's board of directors are considered experienced (6.1 years average tenure).


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

Insider Buying: NNN insiders have only sold shares in the past 3 months.


Recent Insider Transactions

NYSE:NNN Recent Insider Transactions by Companies or Individuals
DateValueNameEntityRoleSharesMax Price
12 Aug 22SellUS$505,591Kevin HabichtIndividual10,520US$48.06

Ownership Breakdown

What is the ownership structure of NNN?
Owner TypeNumber of SharesOwnership Percentage
State or Government74,2160.04%
Individual Insiders1,426,0680.8%
General Public15,272,6728.6%
Institutions160,338,76590.5%

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Top Shareholders

Top 25 shareholders own 73.49% of the company
OwnershipNameSharesCurrent ValueChange %Portfolio %
14.72%
The Vanguard Group, Inc.
26,073,184$1.0b-0.26%0.02%
11.42%
State Street Global Advisors, Inc.
20,228,917$806.3m1.44%0.05%
10.94%
BlackRock, Inc.
19,370,802$772.1m0.06%0.02%
6.21%
FMR LLC
10,993,229$438.2m-0.32%0.04%
4.41%
Victory Capital Management Inc.
7,807,569$311.2m-1.68%0.36%
2.95%
PGGM
5,228,541$208.4m0%1.28%
2.71%
City National Rochdale, LLC
4,801,976$191.4m0.02%0.77%
2.24%
J.P. Morgan Asset Management, Inc.
3,958,576$157.8m-5.87%0.03%
1.68%
Massachusetts Financial Services Company
2,982,226$118.9m32.96%0.03%
1.53%
Geode Capital Management, LLC
2,715,896$108.3m-1.79%0.01%
1.53%
Federated Hermes, Inc.
2,703,427$107.8m5.74%0.34%
1.45%
Dimensional Fund Advisors LP
2,573,469$102.6m-0.72%0.03%
1.23%
BNY Mellon Asset Management
2,185,368$87.1m2.86%0.02%
1.16%
Charles Schwab Investment Management, Inc.
2,059,653$82.1m1.92%0.02%
1.15%
Morgan Stanley, Investment Banking and Brokerage Investments
2,034,125$81.1m-2.09%0.02%
1.07%
Janus Henderson Group plc
1,903,305$75.9m-1.79%0.04%
1.03%
Wells Fargo & Company, Securities and Brokerage Investments
1,819,106$72.5m0.19%0.03%
0.97%
Northern Trust Global Investments
1,720,639$68.6m-4.05%0.01%
0.93%
Norges Bank Investment Management
1,647,756$65.7m0%0.01%
0.78%
Legal & General Investment Management Limited
1,375,498$54.8m0.6%0.02%
0.77%
LaSalle Investment Management Securities, LLC
1,359,505$54.2m11.15%2.18%
0.73%
Nikko Asset Management Co., Ltd.
1,300,916$51.9m12.52%0.02%
0.67%
Rush Island Management, LP
1,187,931$47.4m12.9%12.98%
0.64%
DePrince, Race & Zollo, Inc.
1,124,937$44.8m-11.85%1.12%
0.57%
UBS Asset Management
1,002,755$40.0m-12.52%0.01%

Company Information

National Retail Properties, Inc.'s employee growth, exchange listings and data sources


Key Information

  • Name: National Retail Properties, Inc.
  • Ticker: NNN
  • Exchange: NYSE
  • Founded: 1984
  • Industry: Retail REITs
  • Sector: Real Estate
  • Implied Market Cap: US$7.060b
  • Shares outstanding: 177.11m
  • Website: https://www.nnnreit.com

Number of Employees


Location

  • National Retail Properties, Inc.
  • 450 South Orange Avenue
  • Suite 900
  • Orlando
  • Florida
  • 32801
  • United States


Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
NNNNYSE (New York Stock Exchange)YesCommon StockUSUSDOct 1984
CZ2DB (Deutsche Boerse AG)YesCommon StockDEEUROct 1984

Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2022/09/30 00:00
End of Day Share Price2022/09/30 00:00
Earnings2022/06/30
Annual Earnings2021/12/31


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.