National Retail Properties is a strong buy again.

The commercial property REIT has excellent portfolio and dividend coverage stats.

The correction offers income investors an opportunity to gobble up a high-quality REIT at a decent price.

Shares sell for a reasonable AFFO multiple.

An investment in NNN comes with an entry yield of 5%.

National Retail Properties, Inc. (NNN) is a high-quality commercial property REIT that I see as a “Strong Buy” after the company’s shares got kicked to the curb during the most recent stock market stampede. National Retail Properties has a highly diversified real estate portfolio, top-notch occupancy rates, excellent dividend coverage stats, and a high margin of dividend safety. An investment in National Retail Properties comes with an entry yield of 5.0 percent. The yield on cost is almost guaranteed to increase going forward.

I added National Retail Properties to my DGI portfolio at the end of last year, largely for these three reasons:

  1. The commercial property REIT has excellent cash flow and, by extension, dividend coverage;
  2. National Retail Properties has a history of growing its dividend payout throughout the economic cycle; and
  3. National Retail Properties has excellent portfolio statistics, especially as they relate to portfolio diversification and occupancy rates.

Though I have racked up some paper losses thanks to the recent drop, I think National Retail Properties is an excellent long-term income play. The REIT’s lease portfolio creates very strong recurring cash flow and the AFFO payout ratio remains very conservative.

Like most high-yield income vehicles, National Retail Properties suffered from the bloodbath in the stock market, with shares slumping ~12 percent year-to-date.

Source: StockCharts

Strong Dividend Coverage