NNN REIT, Inc. (NNN): A Bull Case Theory

We came across a bullish thesis on NNN REIT, Inc. on Jussi Askola, CFA’s YouTube Channel. In this article, we will summarize the bulls’ thesis on NNN. NNN REIT, Inc.’s share was trading at $41.62 as of January 13th. NNN’s trailing and forward P/E were 19.84 and 19.76 respectively according to Yahoo Finance.

NNN REIT is a clear example of how deeply undervalued the REIT sector has become, despite its status as one of the highest quality names in the space. Trading at a roughly 6% dividend yield, NNN is widely considered a blue chip net lease REIT, yet it remains priced as if its fundamentals were meaningfully weaker.

The company has built the second longest dividend growth streak in the entire REIT universe at 36 consecutive years by focusing on service oriented properties such as quick service restaurants, convenience stores, home improvement retailers, and car washes. These assets tend to be highly resilient across economic cycles and benefit from stable customer demand.

NNN’s portfolio is largely leased under long term triple net agreements, typically spanning 15 to 20 years, with about 10 years of remaining lease term on average. Under this structure, tenants are responsible for taxes, insurance, and maintenance, which creates highly predictable cash flows for the company. Leases also include annual rent escalations of around 2%, allowing NNN to grow cash flow even during downturns. This durability is reflected in the company’s ability to raise its dividend through periods such as the dot com crash, the global financial crisis, and the pandemic.

Management has reinforced this stability with a conservative capital allocation strategy, maintaining the longest average debt maturity among net lease peers at roughly 12 years and issuing equity only when reinvestment spreads are attractive. By retaining about 30% of cash flow, NNN has historically generated 4% to 5% annual FFO per share growth. Combined with the current yield, this supports an expected total return near 10% without any valuation recovery.

The broader setup further strengthens the case. Years of aggressive rate hikes drove massive capital flows into fixed income, leaving REITs near decade low valuations. As interest rates decline and money market yields fall, income focused capital may rotate back into high quality REITs like NNN, creating meaningful upside through both income and potential yield compression.

Previously, we covered a bullish thesis on STAG Industrial, Inc. (STAG) by Steve Wagner in May 2025, which highlighted the company’s strong industrial platform, robust leasing spreads, disciplined capital recycling, and consistent FFO growth. STAG’s stock price has appreciated by approximately 13.78% since our coverage. This is because STAG’s execution and capital strategy reinforced investor confidence. Jussi Askola, CFA shares a similar focus but emphasizes NNN REIT’s long-term triple net leases, predictable cash flows, and sustained dividend growth, offering a complementary perspective within the REIT sector.

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Disclosure: None.