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National Retail Properties: Yield Advantage, Low Volatility

Published Wed, 11 Jan 2017 08:26:51 -0500 on Seeking Alpha

National Retail Properties' (NYSE: NNN) preferred shares offer income investors a better deal than the common shares. They have a higher dividend yield, and carry much less downside. It makes sense to buy a small position of preferred stock for an income portfolio due to their attractive risk and return features.
Income investors don't always have to buy the common shares of a Real Estate Investment Trust. A lot of REITs, actually, have issued preferred stock which sometimes has a higher yield than the common shares. What's more, Real Estate Investment Trusts have had quite a good run in 2016, which has made a lot of them expensive. In the case of National Retail Properties, investors have to pay ~19x 2016e core funds from operations. This is not cheap by any means, so why not take a look at the preferred stock instead?
In this regard, National Retail Properties' 6.625% Series D Cumulative Redeemable Preferred Stock (NNN-PD) is worth a look. Probably the biggest reason to buy preferred stock is that they are much less risky than a REIT's common stock. National Retail Properties Series D preferred stock has proven to be much less volatile than the REIT's common shares. On the flip side, investors buying National Retail Properties' preferred shares are giving up any significant upside related to National Retail Properties' FFO growth.

Source: Tickertech
Buy The Preferred Stock For A Yield Advantage
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