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Triple Net Dividend Time

Published Thu, 15 Oct 2020 07:00:00 -0400 on Seeking Alpha

Seeking AlphaREITsTriple Net Dividend TimeOct. 15, 2020 7:00 AM ET|| Includes: ADC, EPR, EPR.PC, EPR.PE, EPR.PG, FCPT, GTY, NNN, NNN.PF, O, SRC, SRC.PA, STOR, VER, VER.PF, WPCby: Colorado Wealth Management FundColorado Wealth Management Fund The REIT ForumThe #1 REIT Service Measured By Total ReturnsSummaryLow Treasury yields and low capitalization rates on triple net lease properties usually go together.
The triple net lease REIT sector has delivered three REITs with an exceptional history of dividend growth.
We're bullish on NNN and WPC. Both are great income REITs trading at unusually low valuations.
In the future, we may add more triple net lease REITs to the group of those with exceptional dividend growth history.
We’re checking on the triple net lease REITs again today. The main triple net lease REITs are:
Realty Income (O) National Retail Properties (NNN) W.P. Carey (WPC) STORE Capital (STOR) Spirit Realty Capital (SRC) VEREIT (VER) EPR Properties (EPR) Agree Realty Corporation (ADC) Four Corners Property Trust (FCPT) Getty Realty Corp. (GTY) Index Cards
Our top choices in the sector currently are WPC and NNN.
The index cards for our top picks are included below:

Source: The REIT Forum
We like WPC for their exposure to industrial assets and diversification to European markets.
We like NNN for the unusually low valuation.
As we discussed in The REIT Forum's Triple Net Lease Update, we believe the forward estimates for NNN's AFFO per share are too low compared to peers.
Cap Rate to Treasury Spread
When recessionary risks rise, we see Treasury yields falling. Because the triple net lease REITs lock in their expected revenue (long leases and high occupancy) for so many years, they can often trade closer to bonds. Investors value those recurring cash flows whether from dividends or from direct ownership of the property. For an investor buying real estate directly, they would be looking at the capitalization rate.... Read more

Stock name Last trade   P/E Earnings/Share Dividend/Share Dividend yield
VEREIT 9.77   40.7 0.24 0.55 5.86
EPR PROPERTIES 77.15   22.8 3.38 4.50 5.84
WP CAREY & CO 88.72   31.4 2.83 4.14 4.73
GETTY REALTY 32.62   27.6 1.18 1.40 4.40
NATIONAL RETAIL PROPERTIES 54.39   35.8 1.52 2.06 3.81
REALTY INCOME 74.49   56.9 1.31 2.72 3.69
AGREE REALTY 72.00   40.4 1.78 2.28 3.20