National Retail Properties (NNN) Pays Us

This last week we received a dividend in the amount of $117.14 (45.5 cents X 257.45 shares) from National Retail Properties along with a 5% dividend reinvestment bonus for a total amount of $118.32. This payment from NNN came along with a raise of 4.6% which is well over what we would have expected. Below you can see the historical dividend growth for NNN:

NNN Dividend Growth

This last raise was mush better than historical averages and gives us a present yield of 3.6%. As we discussed before, REITs have been on a tear lately. At the moment our position in NNN sits at around $13,000 which is almost at our target position size of $13,333. Along with the dividends being reinvested every month, we’re also contributing an additional $100 a month. While we like using Amstock for DRIPing NN because we get 5% off when we reinvest our dividends, we don’t like the fact that in order to stop our recurring investment in NNN we need to send them a written confirmation in the form of a fax or a letter.

NNN alone is up +25% from the beginning of this year alone. Since we have been accumulating NNN slowly for the past 5 years, we have only invested $8,323 over that time which gives us a paper gain of +55% on our position. This is the biggest gain of any stock in our current portfolio and we’re not excited about that. We’d like to have invested our target amount of $13,333 but instead we’re having to pull back on investing in NNN until the price drops because we’ve already nearing our target position size.

Our present portfolio is sitting on significant gains from both REITs and utilities so we would expect a correction in both these sectors at which time we would resume buying in order to hit our target position sizes. The theory is that investors are starving for yield with today’s low rates so they’re chasing these two sectors which in turn lowers yields. At some point interest rates should increase which should have a negative impact on these sectors. Until then, we’re easing off on investing in any position where we’ve seen sudden gains like NNN.

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