Financial Data and Key Metrics Changes - The company reported core FFO of $0.86 per share and AFFO of $0.87 per share for Q1 2025, each up 3.6% year-over-year, while annualized base rent increased over 5% year-over-year [13][14] - The NOI margin was 95.9% for the quarter, and G&A as a percentage of total revenues was 5.6% [14][17] - Free cash flow after dividends was approximately $55 million for the quarter [14] Business Line Data and Key Metrics Changes - The company successfully resolved 15 out of 35 vacant furniture stores through leasing or sale, with significant interest in the remaining properties [3] - For restaurant assets, the company gained full possession and has leased or sold 38 properties, with strong interest in the remaining 31 [3][4] - Overall leasing activity was strong with 25 renewals and eight new leases completed, achieving a blended rent recapture rate of 98% [15] Market Data and Key Metrics Changes - Occupancy at the end of the quarter was 97.7%, slightly below the long-term average of approximately 98% due to the eviction process [4][15] - The company experienced limited to no credit losses within the portfolio during the first quarter, indicating strong portfolio stability [5][12] Company Strategy and Development Direction - The company continues to prioritize acquiring well-located properties with strong national and regional tenants, supported by a robust balance sheet [9][10] - The acquisition strategy remains focused on sale-leaseback transactions, with a guidance of $500 to $600 million for 2025 [6][20] - The company is actively managing its assets to prepare for future uncertainties while maintaining a disciplined underwriting approach [5][12] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the portfolio's ability to deliver excellent performance despite current macroeconomic uncertainties [5][12] - The company anticipates some cap rate pressure in 2025 compared to the previous year, but expects to maintain a strong acquisition pace [6][20] - Management highlighted the importance of their experienced team and strong processes in navigating economic cycles [12][13] Other Important Information - The company ended the first quarter with nearly $1.1 billion available on its $1.2 billion line of credit, reinforcing its self-funding model [8][17] - A quarterly dividend of $0.58 per share was announced, equating to a 5.4% annualized dividend yield [18] Q&A Session Summary Question: Acquisition pace in Q1 was higher than expected; can you expand on that? - Management noted that the elevated acquisition pace was primarily due to timing and relationships, with all but one transaction being sale-leaseback [23][24] Question: Expected pace of acquisitions moving forward? - Management maintained guidance of $500 to $600 million for acquisitions but expressed caution due to macroeconomic uncertainties [26] Question: Tenant appetite for growth amid economic volatility? - Tenants are reevaluating growth plans, with some deals canceled, but overall interest in growth remains [30][31] Question: Impact of tariffs on rent coverages? - Management indicated that 85% of their ABR comes from service and non-discretionary tenants, feeling comfortable about tariff impacts [32][33] Question: Concerns regarding discretionary tenants like Dave & Buster's and Camping World? - Management expressed confidence in both tenants, highlighting strong rent coverage and positive operational performance [56][60] Question: Contribution of less than expected bad debt to Q1 results? - The company reported minimal bad debt, with no notable credit loss year-to-date [63] Question: Outlook on lease termination income? - Lease termination income is unpredictable, but the company has seen elevated amounts recently due to specific tenant negotiations [71][73] Question: Performance outlook for new tenants in former Frisch's locations? - New tenants are performing well during the initial phase, with optimism for continued success [78] Question: Plans for remaining former restaurant properties? - There is interest in converting some properties to other uses, with ongoing negotiations [80]

Financial Performance - For the quarter ended March 31, 2025, net earnings increased to $96,458,000 from $94,371,000 in the same quarter of 2024, representing a growth of 2.2%[54]. - Rental income from operating leases rose to $224,056,000 in Q1 2025, compared to $209,084,000 in Q1 2024, marking an increase of 7.2%[65]. - NNN's real estate portfolio value as of March 31, 2025, was $10,898,036,000, up from $10,746,168,000 at the end of 2024, reflecting a growth of 1.4%[64]. - The company recognized a total of $1,512,000 in real estate impairments for the quarter ended March 31, 2025, compared to $1,204,000 in Q1 2024, indicating a 25.5% increase in impairments[70]. - NNN declared dividends of $108,335,000 for the quarter ended March 31, 2025, with a per share dividend of $0.5800, compared to $102,684,000 and $0.5650 per share for the same period in 2024[80]. Real Estate and Leasing - NNN's total annualized base rent (ABR) was $874,301,000 as of March 31, 2025, an increase from $831,010,000 as of March 31, 2024[41]. - The number of tenants classified as cash basis for accounting purposes was 10 as of March 31, 2025, representing 1.5% of total properties and 3.4% of annualized base rent[41]. - NNN's properties are predominantly leased under triple-net leases, with tenants responsible for all operating expenses[37]. - NNN's real estate portfolio is primarily held for investment, with leases typically having initial terms of 10 to 20 years[45]. - The weighted average remaining lease term for NNN's real estate portfolio was 10 years as of March 31, 2025, with 3,575 leases classified as operating leases[61]. Debt and Financing - Debt costs associated with NNN's unsecured notes amounted to $43,820,000 as of March 31, 2025, net of accumulated amortization[51]. - NNN increased its unsecured revolving credit facility borrowing capacity from $1,100,000,000 to $1,200,000,000, with a weighted average interest rate of 5.21% for the quarter ended March 31, 2025[71]. - As of March 31, 2025, NNN had $116,300,000 outstanding under the credit facility and $1,083,700,000 available for future borrowings, remaining compliant with financial covenants[71]. - NNN's unsecured debt obligations have a weighted average interest rate of 4.1% and a weighted average maturity of 11.6 years[144]. - NNN's variable rate credit facility had a weighted average outstanding balance of $70,342,000 for the quarter ended March 31, 2025, down from $116,067,000 with a 6.26% interest rate in the same period of 2024[142]. Cash and Investments - NNN held $427,000 in restricted cash and cash held in escrow as of March 31, 2025, compared to $331,000 as of December 31, 2024[49]. - NNN's cash and cash equivalents consist of cash and money market accounts, with no losses experienced in accounts exceeding federally insured levels[48]. - NNN's accumulated other comprehensive income (loss) improved to $(7,791,000) as of March 31, 2025, from $(7,959,000) at the end of 2024[56]. - NNN's above-market in-place leases net value increased to $3,556,000 as of March 31, 2025, from $2,594,000 at the end of 2024, showing a growth of 37.1%[67]. Accounting and Compliance - The company is currently evaluating the potential impact of new accounting standards (ASU 2023-09 and ASU 2024-03) on its future disclosures[57][58]. - NNN's accumulated other comprehensive income related to previously terminated interest rate hedges was $7,499,000, with an estimated additional $1,274,000 to be reclassified as interest expense over the next 12 months[74]. - During the quarter ended March 31, 2025, NNN entered into a forward starting swap with a notional amount of $150,000,000, designated as a cash flow hedge, with a fair value of $292,000[75]. Real Estate Transactions - The company reported a gain on the disposition of real estate of $3,813,000 from 10 properties sold in Q1 2025, compared to a gain of $4,821,000 from 6 properties sold in Q1 2024[68]. - NNN has committed to fund construction on 19 properties with a total commitment of $143,758,000, of which $87,819,000 has been funded, leaving a remaining commitment of $55,939,000[69].

Financial Performance - Revenues for Q1 2025 increased to $230.854 million, up 7.0% from $215.407 million in Q1 2024[2] - Net earnings per diluted share were $0.51, a slight decrease from $0.52 in the prior year[3] - Core FFO per diluted share grew by 3.6% to $0.86, while AFFO per diluted share increased to $0.87, up from $0.84[3] - Rental income for Q1 2025 was $230,574, an increase of 7.9% from $214,825 in Q1 2024[25] - Net earnings for Q1 2025 were $96,458, compared to $94,371 in Q1 2024, reflecting a growth of 2.2%[25] - Funds from Operations (FFO) for Q1 2025 reached $158,734, up from $151,261 in Q1 2024, indicating a 4.9% increase[32] - Core FFO per share for Q1 2025 was $0.86, compared to $0.83 in Q1 2024, representing a growth of 3.6%[32] Investment and Capital Structure - The company closed on $232.4 million of investments, achieving an initial cash cap rate of 7.4%[3] - Gross Debt was reported at $4.6 billion with a weighted average interest rate of 4.1%[7] - The company maintained $1.1 billion in total available liquidity, with only 2.5% of floating rate debt[3] - Total liabilities increased to $4,665,231 as of March 31, 2025, compared to $4,510,453 at the end of 2024[30] - The gross debt to gross assets ratio was 41.0% as of March 31, 2025, compared to 40.7% at the end of 2024[39] - The company maintained a fixed charge coverage ratio of 4.27, well above the required minimum of 1.50[41] Dividends - The board declared a quarterly dividend of $0.58 per share, representing a 5.4% annualized yield[8] - The company reported a dividend per share of $0.5800 for Q1 2025, up from $0.5650 in Q1 2024[32] Asset and Equity Overview - Total assets as of March 31, 2025, were $9,021,718, an increase from $8,872,728 as of December 31, 2024[30] - The total equity as of March 31, 2025, was $4,356,487, slightly down from $4,362,275 at the end of 2024[30] Annual Base Rent (ABR) and Lease Information - Annualized Base Rent (ABR) rose by 5.2% compared to the previous year[3] - As of March 31, 2025, the total ABR (Annual Base Rent) is $874,301,000, an increase from $831,010,000 as of March 31, 2024, representing a growth of approximately 5.7%[45] - Lease expirations in 2025 account for 2.5% of ABR, with 107 properties covering 608,000 square feet[48] - The 2030 lease expirations represent 4.6% of ABR, with 169 properties covering 2,202,000 square feet[48] - The weighted average remaining lease term is 9.9 years as of March 31, 2025[48] Tenant and Segment Performance - The top line of trade is Automotive service, accounting for 17.9% of ABR in 2025, up from 16.3% in 2024[43] - The state of Texas contributes the highest ABR at 19.0%, followed by Florida at 8.7%[44] - The top tenant, 7-Eleven, represents 4.5% of total properties with 146 locations[47] - The family entertainment centers segment increased to 7.1% of ABR in 2025 from 6.7% in 2024[43] - The convenience stores segment shows a slight increase to 16.8% of ABR in 2025 from 16.2% in 2024[43] - The company has 2,267 properties classified as "Other," which make up 52.1% of total properties[47]

Core Insights - NNN REIT, Inc. reported strong financial results for Q1 2025, with revenues of $230.854 million, a 7.2% increase from $215.407 million in Q1 2024 [2] - The company achieved net earnings of $96.458 million, slightly up from $94.371 million in the previous year, resulting in a diluted earnings per share of $0.51 [2][4] - NNN's Core FFO and AFFO per diluted share grew by 3.6% year-over-year, reaching $0.86 and $0.87 respectively [4][31] Financial Results - Total revenues for Q1 2025 were $230.854 million, compared to $215.407 million in Q1 2024, marking a 7.2% increase [2] - Net earnings increased to $96.458 million from $94.371 million, with net earnings per share slightly decreasing from $0.52 to $0.51 [2][4] - FFO for the quarter was $158.734 million, up from $151.261 million in the prior year, with FFO per share increasing from $0.83 to $0.85 [2][31] - Core FFO reached $160.907 million, compared to $151.578 million in Q1 2024, with Core FFO per share rising from $0.83 to $0.86 [2][31] - AFFO was reported at $163.015 million, an increase from $153.259 million, with AFFO per share growing from $0.84 to $0.87 [2][31] Operating Results - As of March 31, 2025, NNN owned 3,641 properties with a total gross leasable area of approximately 37.311 million square feet [3][15] - The occupancy rate was reported at 97.7%, slightly below the 20-year average of 98.2% [4][15] - The weighted average remaining lease term was 9.9 years [3][15] - NNN initiated eviction proceedings for 64 properties leased to a mid-western restaurant operator, successfully re-leasing 31 of these properties [3][5] Property Acquisitions and Dispositions - NNN closed on $232.4 million of investments during the quarter, completing over 40% of its 2025 acquisition volume plan [4][6] - The company disposed of 10 properties, generating net sale proceeds of $15.839 million [8] Balance Sheet and Liquidity - As of March 31, 2025, NNN reported gross debt of $4.6 billion with a weighted average interest rate of 4.1% and a maturity of 11.6 years [9][34] - The company maintained $1.1 billion in total available liquidity, with only 2.5% of its debt being floating rate [4][9] - The net debt to annualized EBITDAre ratio was 5.5x, while the fixed charge coverage ratio stood at 4.2x [9][37] Dividend Information - NNN declared a quarterly dividend of $0.58 per share, representing an annualized yield of 5.4% and an AFFO payout ratio of 66% [10][31] 2025 Guidance - The company maintained its 2025 guidance, projecting net earnings per share between $1.97 and $2.02, Core FFO per share between $3.33 and $3.38, and AFFO per share between $3.39 and $3.44 [11]

Core Viewpoint - Investing in dividend stocks, particularly real estate investment trusts (REITs), can provide a lucrative and steadily rising income stream, turning idle cash into passive income. Group 1: Dividend Stocks Overview - Four Corners Property Trust, VICI Properties, and NNN REIT are highlighted as strong income options with dividend yields of 5% or more, significantly higher than the S&P 500's average yield of less than 1.5% [2] - These REITs focus on properties secured by long-term net leases, generating stable rental income that supports attractive dividends [12] Group 2: Four Corners Property Trust - Four Corners Property Trust owns approximately 1,200 properties leased to 163 brands, with a significant portion of its rent coming from restaurants [4] - The REIT's dividend yield is around 5%, supported by stable rental income from long-term leases averaging 7.3 years remaining [3] - The company has increased its dividend by 2.9% recently and has raised it by over 45% since its spin-off from Darden in 2015 [5] Group 3: VICI Properties - VICI Properties specializes in experiential real estate, such as casinos, with long-term triple-net leases averaging 41 years remaining, providing stable cash flow [6] - A growing percentage of VICI's net leases are linked to inflation, expected to rise from 42% this year to 90% by 2035, ensuring steady rental income growth [7] - The REIT has consistently raised its dividend for seven consecutive years, with a compound annual growth rate of 7% [8] Group 4: NNN REIT - NNN REIT focuses on single-tenant retail properties, with a dividend yield of 5.7%, supported by long-term NNN leases averaging 10 years remaining [9] - The REIT has a strong track record, having increased its dividend for 35 consecutive years, ranking it among the top in the REIT sector [11] - Approximately 73% of NNN REIT's investment volume since 2007 has come from existing tenant relationships, enhancing its acquisition strategy [10]

Core Insights - NNN REIT is one of the oldest triple net lease REITs in the US, established in 1984, and has maintained 35 years of uninterrupted dividend growth [1] - The company began with a modest portfolio in Florida and has since expanded significantly, becoming a major player in the industry [1] Company Characteristics - NNN REIT focuses on companies that exhibit growth in revenue, earnings, and free cash flow [1] - The company seeks investments with excellent growth prospects and favorable valuations [1] - NNN REIT prefers steadily growing companies with high free cash flow margins, dividend stocks, and those with generous share repurchase programs [1]

Core Insights - NNN REIT is presented as a compelling investment opportunity for long-term investors due to its unique qualities that are not shared by its peers [1] - The valuation of NNN REIT remains attractive, similar to previous assessments [1] Company Overview - NNN REIT focuses on dividend investing, which is highlighted as a pathway to financial freedom [1] - The author emphasizes the importance of financial modeling, commercial and financial due diligence, and negotiation in assessing company health [1] Investment Strategy - The article promotes dividend investing as a straightforward and accessible method for building long-term wealth [1] - The author's motivation for sharing insights is to facilitate collective learning and growth in the realm of dividend investing [1]

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Core Viewpoint - The stock market has experienced a significant decline this year due to tariff concerns, leading to increased dividend yields for high-quality companies, providing investors with opportunities for durable passive income streams even amid economic downturns [1]. Group 1: Dominion Energy - Dominion Energy currently offers a dividend yield of 5.1%, supported by stable cash flow from electricity and natural gas supply in Virginia and the Carolinas [2]. - The company is investing $50 billion through 2029 to expand power generation, anticipating increased electricity demand from AI data centers and onshoring manufacturing, which is expected to grow earnings per share by 5% to 7% annually [3]. Group 2: NNN REIT - NNN REIT has a dividend yield of 5.8%, generating steady rental income from a portfolio of single-tenant net lease retail properties where tenants cover all operating costs [4]. - The REIT pays out less than 70% of its cash flow in dividends, projecting $200 million in post-dividend free cash flow for reinvestment in additional income-generating properties, and has increased its dividend for 35 consecutive years [5]. Group 3: Brookfield Infrastructure - Brookfield Infrastructure offers a dividend yield of around 5%, with 85% of its funds from operations supported by government-regulated rate structures or long-term contracts [6]. - The company retains 60% to 70% of its stable cash flow for reinvestment, focusing on growing its business and upgrading infrastructure, with expected FFO per share growth of over 10% annually, supporting 5% to 9% dividend growth [7]. Group 4: Verizon - Verizon's dividend yield is 6.2%, with recurring cash flow from wireless and broadband services, generating $36.9 billion last year [8]. - The company is investing $17.1 billion in capital expenditures and has $8.6 billion in excess free cash, which is used to strengthen its balance sheet and support its dividend payments [9]. - Verizon is acquiring Frontier Communications for $20 billion to enhance its fiber network, with investments in fiber and 5G expected to grow cash flow and continue its 18-year dividend growth streak [10]. Group 5: Oneok - Oneok has a dividend yield of 5%, supported by stable cash flow from government-regulated rate structures and long-term contracts [11]. - The company is diversifying and expanding its midstream platform through major acquisitions and organic capital projects, positioning itself for 3% to 4% annual dividend growth while maintaining a trend of dividend stability for over 25 years [12]. Group 6: High-Yielding Dividend Stocks - The recent stock market sell-off has led to increased dividend yields, with many high-quality companies offering payouts of 5% and above, providing attractive income streams for investors [13].

Core Viewpoint - NNN REIT, Inc. is set to release its first quarter 2025 financial results on May 1, 2025, before market opening, followed by a conference call to discuss these results [1]. Group 1: Financial Results Announcement - The company will announce its first quarter 2025 results on May 1, 2025, before the market opens [1]. - A conference call will be held on the same day at 10:30 a.m. ET to discuss financial and operating results [1]. Group 2: Conference Call Details - A live webcast of the conference call will be available on the company's website [2]. - The conference call can be accessed by dialing 888-506-0062 in the U.S. or 973-528-0011 internationally, with a participant code of 696567 [2]. - A telephonic replay of the call will be available until May 8, 2025, using the numbers 877-481-4010 in the U.S. or 919-882-2331 internationally, with the code 52285 [2]. Group 3: Company Overview - NNN REIT invests in high-quality properties generally subject to long-term, net leases with minimal ongoing capital expenditures [3]. - As of December 31, 2024, the company owned 3,568 properties across 49 states, with a gross leasable area of approximately 36.6 million square feet and a weighted average remaining lease term of 9.9 years [3].