Interest rates are increasing and it’s something that I believe is long overdue for a healthy economy and that will present buying opportunities in some sectors to get some long term capital deployed. Currently the REIT sector has been depressed by rising rates and I feel that there is good opportunity to invest in the sector given their dividend payouts and the current environment. I’m a bit of a contrarian when it comes to stocks the last few years as I made clear in one of my latest posts about purchasing BAC, C, and XFL deep in the financial crisis only to have them pay me huge dividends later.
Right now I pulled the trigger on a stock I’ve been waiting to buy for a little while now and felt I needed exposure to. I purchased 100 shares of NNN on 7/5 for $39.3898 per share to start the day. NNN is a real estate investment trust that has operations in 48 states, over 2500 different properties, and 38 different operational fields. They are sheltered from some of the migration online due to having more convenience stores, restaurants, and entertainment venues in the portfolio. These are obviously difficult to move to the online venue as they are either experiences or convenience of on the go type stores.
Right now the company is 27 years into increasing their dividend, this is a fantastic track record and something that I consider extremely important in investing as it shows consistency and that the company is dedicated to returning value to their shareholders. I like the fact that the company the FFO payout has remained steady since 2013, meaning that funds from operating the company is growing at the same rate at the dividend. This implies that it is stable and can continue to grow as the company grows.
NNN has a very diverse footprint in the Unitest States with no region having over 25% of their properties and no tenant taking over 5.3% of their rental locations. This is well diversified and should protect from any regional challenges. I like NNN as a core holding due to the long term increases in dividends and I think we have some discounted value here with the increased rates, but the company is so well positioned I don’t believe that this will be an issue for them.
I love adding additional flakes to that slow rolling snowball of freedom and this adds $182.00 a year in passive income to the Liberty Fund.