NNN
NNN
Hold 2026-05-03
Model
DDM
Price at Report
$43.96
Base IV
$42.63
Bear IV
$37.35
Bull IV
$47.80
Entry Zone: 38-41 · Sell Above: 52
Bore Family Office
Valuation Report — NNN REIT Inc (NNN) • May 3, 2026
3-Stage DDM (Ke) • Discount Rate: 8.45% • Current Price: $43.96
Prepared by Lurch • Bore Family Office • Data: Finnhub, StockAnalysis.com, S&P Global Market Intelligence
🏢 Business Overview
NNN REIT (National Retail Properties) is a publicly traded REIT investing primarily in single-tenant net-leased retail properties. Founded in 1984 and headquartered in Orlando, FL, NNN owns over 3,500 properties across 49 states, leased to more than 350 tenants in 30+ retail categories. The company focuses on freestanding, necessity-based retail — auto service, tire dealers, convenience stores, and family entertainment — generating stable rental income from long-term leases (weighted average lease term ~19 years).
NNN has increased its dividend for 37 consecutive years, one of only two REITs in the S&P 500 Dividend Aristocrats index. The company's self-directed external growth model (acquiring individual properties at ~7.5% cap rates) combined with modest same-store growth produces steady AFFO per share increases of 2.5–3.5% annually. Occupancy stands at 98.6% as of Q1 2026.
| Business Segment | Revenue | % of Total | YoY Growth | Margin | Notes |
|---|---|---|---|---|---|
| Auto Service | $209M | 23% | +4.0% | — | Tire/service centers — recession-resilient |
| Convenience Stores | $139M | 15% | +3.0% | — | Essential retail traffic |
| Family Entertainment | $120M | 13% | +5.0% | — | Experiential retail — growing |
| Other Retail | $458M | 49% | +3.0% | — | Diversified mix across 30+ categories |
| Blended Growth Rate | — | 100% | +3.5% | — | Weighted avg across segments |
📊 Business Lifecycle Stage
Stage 1
Startup
Startup
Stage 2
Hyper Growth
Hyper Growth
Stage 3
Self Funding
Self Funding
Stage 4
Operating Leverage
Operating Leverage
Stage 5
Capital Return
Capital Return
Stage 6
Decline
Decline
Stage 4 — Maturity / Stable Growth: Revenue growing modestly with profits inflecting rapidly. The classic DCF sweet spot — FCF is reliable, growing, and well-anchored to analyst estimates.
Why this drives model selection: Classic DCF sweet spot — FCF inflecting and growing rapidly.
🔍 Quality Scorecard
| Metric | Value | Assessment |
|---|---|---|
| FCF Margin | 72.0% | ≥10% strong |
| Debt / EBITDA | 5.5x | >5x elevated |
| Revenue Trend | Growing 3yr | 3-year directional trend |
| FCF Margin Trend | Stable (±1pp) | Directional margin trajectory |
| Analyst Revisions | Neutral | Last 90 days consensus direction |
✅ Quality profile supports the valuation
📊 Financial Snapshot
| Metric | 2021 | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|---|
| Revenue ($M) | $726 | $773 | $828 | $869 | $926 |
| Rev YoY Growth | — | +6.4% | +7.1% | +5.0% | +6.5% |
| Gross Margin | 96.1% | 96.6% | 96.6% | 96.3% | 96.0% |
| EBITDA ($M) | $654 | $706 | $794 | $858 | $858 |
| EBITDA Margin | 90.1% | 91.4% | 95.8% | 98.7% | 92.6% |
| Operating Income ($M) | $449 | $482 | $555 | $578 | $590 |
| Operating Margin | 61.8% | 62.4% | 67.0% | 66.5% | 63.6% |
| Net Income ($M) | $264 | $335 | $392 | $397 | $390 |
| Net Margin | 36.4% | 43.3% | 47.4% | 45.6% | 42.1% |
| EPS (diluted) | $1.51 | $1.89 | $2.16 | $2.15 | $2.07 |
| Free Cash Flow ($M) | $568 | $578 | $612 | $636 | $667 |
| Annual DPS | $2.100 | $2.160 | $2.230 | $2.290 | $2.360 |
| Total Debt ($M) | $3,200 | $3,200 | $3,200 | $3,200 | $3,200 |
💹 Capital Return & Share Count Analysis
Net Share Change
+29.9% (2016→2025)
📈 Net dilution — issuances exceed buybacks
| Year | Diluted Shares (M) | YoY Change | Buyback Spend ($M) | Buyback Yield |
|---|---|---|---|---|
| 2016 | 144.7M | — | — | — |
| 2017 | 149.4M | +3.2% | — | — |
| 2018 | 156.3M | +4.6% | — | — |
| 2019 | 165.1M | +5.6% | — | — |
| 2020 | 172.2M | +4.3% | — | — |
| 2021 | 174.8M | +1.5% | — | — |
| 2022 | 177.1M | +1.3% | — | — |
| 2023 | 181.7M | +2.6% | — | — |
| 2024 | 184.0M | +1.3% | — | — |
| 2025 | 188.0M | +2.2% | — | — |
⚙️ Ke (DDM)
| Input | Value | Notes |
|---|---|---|
| Risk-Free Rate (Rf) | 4.25% | 10-yr US Treasury yield |
| Beta (β) | 0.805 | Market beta (Finnhub) |
| Equity Risk Premium (ERP) | 5.5% | Damodaran US ERP |
| Cost of Equity (Ke) | 8.45% | Ke = Rf + β × ERP |
📈 DDM Scenarios
$37
🔴 Bear
$43
📊 Base
$48
🚀 Bull
$43.96
Current Price
$45
Analyst Avg PT
| Scenario | Stage 1 (Yrs 1–5) | Stage 2 (Yrs 6–10) | Terminal g | Ke | Intrinsic Value | vs Price |
|---|---|---|---|---|---|---|
| 🔴 Bear | 2.0% | 1.5% | 2.0% | 8.45% | $37 | ▼15.0% |
| 📊 Base | 3.2% | 2.5% | 2.5% | 8.45% | $43 | ▼3.0% |
| 🚀 Bull | 4.2% | 3.0% | 3.0% | 8.45% | $48 | ▲8.7% |
📋 Full 10-Year Projection Tables
Bear Scenario
Stage 1: 2.0% | Stage 2: 1.5% | Terminal: 2.0%
| Period | Stage | DPS / Dist. | PV of DPS | Cumulative IV |
|---|---|---|---|---|
| Year 1 | Stage 1 | $2.448 | $2.257 | $2.26 |
| Year 2 | Stage 1 | $2.497 | $2.123 | $4.38 |
| Year 3 | Stage 1 | $2.547 | $1.997 | $6.38 |
| Year 4 | Stage 1 | $2.598 | $1.878 | $8.26 |
| Year 5 | Stage 1 | $2.650 | $1.766 | $10.02 |
| Year 6 | Stage 2 | $2.690 | $1.653 | $11.67 |
| Year 7 | Stage 2 | $2.730 | $1.547 | $13.22 |
| Year 8 | Stage 2 | $2.771 | $1.448 | $14.67 |
| Year 9 | Stage 2 | $2.812 | $1.355 | $16.02 |
| Year 10 | Stage 2 | $2.855 | $1.268 | $17.29 |
| Terminal | — | TV=$45.14 | PV(TV)=$20.06 (54% of IV) | $37.35 |
| Intrinsic Value | — | — | PV(Divs) $17.29 + PV(TV) $20.06 | $37.35 |
How the price per share is derived: Each year's projected dividend is discounted back at Ke (8.45%) to get its present value. After Year 10, dividends are assumed to grow at the terminal rate (2.0%) in perpetuity — the Gordon Growth formula gives a terminal value of DPS11 / (Ke − gT) = $45.14. That terminal value is then discounted back 10 years to today's dollars (PV of TV = $20.06). Intrinsic value = PV of all dividends ($17.29) + PV of terminal value ($20.06) = $37.35 per share.
Base Scenario
Stage 1: 3.2% | Stage 2: 2.5% | Terminal: 2.5%
| Period | Stage | DPS / Dist. | PV of DPS | Cumulative IV |
|---|---|---|---|---|
| Year 1 | Stage 1 | $2.477 | $2.284 | $2.28 |
| Year 2 | Stage 1 | $2.556 | $2.173 | $4.46 |
| Year 3 | Stage 1 | $2.638 | $2.068 | $6.53 |
| Year 4 | Stage 1 | $2.722 | $1.968 | $8.49 |
| Year 5 | Stage 1 | $2.809 | $1.873 | $10.37 |
| Year 6 | Stage 2 | $2.880 | $1.770 | $12.14 |
| Year 7 | Stage 2 | $2.952 | $1.673 | $13.81 |
| Year 8 | Stage 2 | $3.025 | $1.581 | $15.39 |
| Year 9 | Stage 2 | $3.101 | $1.494 | $16.88 |
| Year 10 | Stage 2 | $3.179 | $1.412 | $18.30 |
| Terminal | — | TV=$54.76 | PV(TV)=$24.33 (57% of IV) | $42.63 |
| Intrinsic Value | — | — | PV(Divs) $18.30 + PV(TV) $24.33 | $42.63 |
How the price per share is derived: Each year's projected dividend is discounted back at Ke (8.45%) to get its present value. After Year 10, dividends are assumed to grow at the terminal rate (2.5%) in perpetuity — the Gordon Growth formula gives a terminal value of DPS11 / (Ke − gT) = $54.76. That terminal value is then discounted back 10 years to today's dollars (PV of TV = $24.33). Intrinsic value = PV of all dividends ($18.30) + PV of terminal value ($24.33) = $42.63 per share.
Bull Scenario
Stage 1: 4.2% | Stage 2: 3.0% | Terminal: 3.0%
| Period | Stage | DPS / Dist. | PV of DPS | Cumulative IV |
|---|---|---|---|---|
| Year 1 | Stage 1 | $2.501 | $2.306 | $2.31 |
| Year 2 | Stage 1 | $2.606 | $2.216 | $4.52 |
| Year 3 | Stage 1 | $2.715 | $2.129 | $6.65 |
| Year 4 | Stage 1 | $2.829 | $2.045 | $8.70 |
| Year 5 | Stage 1 | $2.948 | $1.965 | $10.66 |
| Year 6 | Stage 2 | $3.037 | $1.866 | $12.53 |
| Year 7 | Stage 2 | $3.128 | $1.773 | $14.30 |
| Year 8 | Stage 2 | $3.222 | $1.684 | $15.98 |
| Year 9 | Stage 2 | $3.318 | $1.599 | $17.58 |
| Year 10 | Stage 2 | $3.418 | $1.519 | $19.10 |
| Terminal | — | TV=$64.59 | PV(TV)=$28.70 (60% of IV) | $47.80 |
| Intrinsic Value | — | — | PV(Divs) $19.10 + PV(TV) $28.70 | $47.80 |
How the price per share is derived: Each year's projected dividend is discounted back at Ke (8.45%) to get its present value. After Year 10, dividends are assumed to grow at the terminal rate (3.0%) in perpetuity — the Gordon Growth formula gives a terminal value of DPS11 / (Ke − gT) = $64.59. That terminal value is then discounted back 10 years to today's dollars (PV of TV = $28.70). Intrinsic value = PV of all dividends ($19.10) + PV of terminal value ($28.70) = $47.80 per share.
🔲 Sensitivity Table
| Ke \ gT | 1.5% | 2.0% | 2.5% | 3.0% | 3.5% |
|---|---|---|---|---|---|
| 6.5% | $54 | $58 | $63 | $70 | $79 |
| 7.0% | $49 | $53 | $56 | $61 | $67 |
| 7.5% | $45 | $48 | $51 | $54 | $59 |
| 8.0% | $42 | $44 | $46 | $49 | $53 |
| 8.5% | $39 | $40 | $42 | $45 | $47 |
| 9.0% | $36 | $37 | $39 | $41 | $43 |
| 9.5% | $34 | $35 | $36 | $38 | $40 |
| 10.0% | $32 | $33 | $34 | $35 | $37 |
| 10.5% | $30 | $31 | $32 | $33 | $34 |
Green = >10% above current price. Red = >10% below. Gold = within ±10%.
📉 Long-Term Price Trend Channel
Log-linear trend fitted to full price history. ±1.5σ bands. Green shaded zone = bottom 25% of historical range — historically attractive entry.
🏦 Comparable Valuation
| Company | Ticker | P/FFO | P/AFFO | Div Yield | FFO Growth | Notes |
|---|---|---|---|---|---|---|
| NNN REIT | NNN | 21.2x | 12.9x | 5.5% | 3.2% | Subject company |
| Realty Income | O | 16.0x | 15.2x | 5.8% | 3.0% | Largest net-lease REIT |
| STORE Capital | STOR | 14.5x | 14.0x | 5.2% | 4.0% | Middle-market net lease |
| Lexington Realty | LXP | 12.0x | 11.5x | 5.0% | 2.5% | Industrial/net lease mix |
| NNN 5yr avg | NNN | 18.0x | 14.0x | 5.2% | 3.0% | Own historical average |
💰 Dividend / Distribution Analysis
| Metric | Value |
|---|---|
| Annual DPS | $2.400 |
| Current Yield | 5.46% |
| Consecutive Growth Years | 37 |
| 1-yr DPS CAGR | +3.1% |
| 3-yr DPS CAGR | +2.9% |
| 5-yr DPS CAGR | +3.1% |
| 10-yr DPS CAGR | +3.1% |
| Payout Ratio (DPS/EPS) | 112.0% ⚠️ |
| FCF Payout Ratio | 67.6% |
| Sustainability Verdict | Safe |
NNN's 37-year dividend growth streak is among the longest in the REIT sector. AFFO payout ratio of ~67.5% is well-covered, with headroom for continued 3%+ annual increases. The EPS payout ratio exceeds 100% due to REIT depreciation accounting — this is normal and not a concern. FCF payout of 67.6% confirms sustainable distribution policy.
🔮 Analyst Forecast Section
(a) EPS Consensus
| Year | Low / Actual | Avg | High | # Analysts | Type |
|---|---|---|---|---|---|
| 2022 | $1.89 | — | — | — | Actual |
| 2023 | $2.16 | — | — | — | Actual |
| 2024 | $2.15 | — | — | — | Actual |
| 2025 | $2.07 | — | — | — | Actual |
| 2026 | $1.99 | $2.08 | $2.23 | 9 | Estimate |
| 2027 | $2.05 | $2.40 | $3.81 | 8 | Estimate |
(b) Revenue Consensus
| Year | Low / Actual | Avg | High | # Analysts | Type |
|---|---|---|---|---|---|
| 2022 | $0.8B | — | — | — | Actual |
| 2023 | $0.8B | — | — | — | Actual |
| 2024 | $0.9B | — | — | — | Actual |
| 2025 | $0.9B | — | — | — | Actual |
| 2026 | $0.9B | $1.0B | $1.0B | 9 | Estimate |
| 2027 | $0.9B | $1.0B | $1.1B | 8 | Estimate |
(c) Individual Analyst Price Targets
| Analyst | Firm | Rating | PT | Upside |
|---|---|---|---|---|
| Ronald Kamdem | Morgan Stanley | Buy | $50 | +13.7% |
| James Kammert | Evercore ISI | Hold | $46 | +4.6% |
| Richard Hightower | Barclays | Sell | $45 | +2.4% |
| Brad Heffern | RBC Capital | Hold | $44 | +0.1% |
💡 Investment Thesis
- Bull Case: NNN's 37-year dividend growth streak, 98.6% occupancy, and 7.5% acquisition cap rates on new investments create a powerful compounding engine. At ~$44, the 5.5% yield is attractive for income-focused investors, and any improvement in same-store NOI or external growth above guidance (3.2% AFFO growth midpoint) could push the stock toward $50+. The REIT's net-lease model generates very high margins (~64% operating margin) with minimal capex requirements.
- Bear Case: Rising interest rates compress net-lease REIT valuations (Ke rising from historical lows). NNN's 2–3% internal growth is modest, meaning dividend increases barely outpace inflation. Tenant risk — a small number of large tenants (Top 20 tenants = ~35% of rent) could face secular headwinds. The stock has limited upside vs. analyst consensus near $45 — it's a steady compounder, not a deep value play.
- Key Assumption (Base): NNN delivers on 2026 AFFO guidance of $3.53–$3.59, dividend grows at 3.2% (in line with guidance midpoint), and Ke of 8.45% reflects the rate environment. Terminal growth at 2.5% assumes NNN continues modest external growth indefinitely — consistent with historical performance.
👔 Management Quality & Culture
CEO: Not identified · Tenure: Since 2025 (~1 yrs)
Net Insider Buys (12m)
+293,509 shares
Incentive Alignment
⚠️ Moderate
Compensation: Equity-based compensation present
CEO Background & Track Record
NNN Reit - Wikipedia
In April 2017, Craig Macnab retired and Jay Whitehurst became CEO & President of the company.
In April 2017, Craig Macnab retired and Jay Whitehurst became CEO & President of the company.
Company Leadership | NNN REIT
Executive Vice President & Chief Financial Officer Vincent H. Chao joined NNN REIT in January 2025, and serves as Executive Vice President, Chief Financial Officer, Assistant Secretary, and Treasurer.
Executive Vice President & Chief Financial Officer Vincent H. Chao joined NNN REIT in January 2025, and serves as Executive Vice President, Chief Financial Officer, Assistant Secretary, and Treasurer.
Board of Directors | NNN REIT
After 37 consecutive years with Highwoods Properties, Inc., a publicly traded REIT (NYSE: HIW), Mr. Fritsch retired in September 2019 as President and Chief Executive Officer. Joining Highwoods in 1982, Mr.
After 37 consecutive years with Highwoods Properties, Inc., a publicly traded REIT (NYSE: HIW), Mr. Fritsch retired in September 2019 as President and Chief Executive Officer. Joining Highwoods in 1982, Mr.
Capital Allocation & Strategy
2024 Annual Results and 2025 Guidance Announced by NNN REIT,
With the full $1.2 billion available on our line of credit and approximately $200 million in free cash flow, we are in a strong position to drive property acquisitions and capitalize on relationship opportunities in 2025.&q
With the full $1.2 billion available on our line of credit and approximately $200 million in free cash flow, we are in a strong position to drive property acquisitions and capitalize on relationship opportunities in 2025.&q
NEWS RELEASE For information contact: Kevin B. Habicht Chief
Steve Horn, Chief Executive Officer, commented: "In 2024, we executed more than $560 million in acquisitions with minimal · reliance on capital markets and ended the year with a zero balance on our revolving credit facility
Steve Horn, Chief Executive Officer, commented: "In 2024, we executed more than $560 million in acquisitions with minimal · reliance on capital markets and ended the year with a zero balance on our revolving credit facility
Employee Ratings
Reviews
,
Culture Signal
Mixed
Employee Review Excerpts
NNN REIT Reviews: Pros And Cons of Working At NNN REIT | Gla
Glassdoor has 13 NNN REIT reviews submitted anonymously by NNN REIT employees. Read employee reviews and ratings on Glassdoor to decide if NNN REIT is right for you. ... Copyright © 2008-2025. Glassdoor LLC.
Glassdoor has 13 NNN REIT reviews submitted anonymously by NNN REIT employees. Read employee reviews and ratings on Glassdoor to decide if NNN REIT is right for you. ... Copyright © 2008-2025. Glassdoor LLC.
Working at NNN REIT | Glassdoor
See what employees say it's like to work at NNN REIT. Salaries, reviews, and more - all posted by employees working at NNN REIT.
See what employees say it's like to work at NNN REIT. Salaries, reviews, and more - all posted by employees working at NNN REIT.
NNN REIT - Very Black and White Company - No Grey allowed!!<
Great company. 40 hour work weeks. Great for a 9-5er. Long stable company.
Great company. 40 hour work weeks. Great for a 9-5er. Long stable company.
Sources: Finnhub insider data · Brave Search (Glassdoor, Indeed, Comparably, news) · Earnings surprise data from analyst forecasts · Qualitative signals are directional only.
⚖️ DDM Verdict: Hold — NNN REIT Inc (NNN)
Current price: $43.96 | Analyst Avg PT: $45.13
$37
🔴 Bear
$43
📊 Base
$48
🚀 Bull
| Tier | Price | Action |
|---|---|---|
| Tier 1 — Starter | ≤$41 | Begin position |
| Tier 2 — Add | ≤$39 | Add on weakness |
| Tier 3 — Full | ≤$38 | Full allocation |
| Sell Alert | ≥$52 | Above fair value — consider trimming |
How tiers are set: Tier 1 = Base IV × 0.92 (8% discount to base case). Tier 2 = midpoint of Bear & Base IV (building on meaningful weakness). Tier 3 = Bear IV × 1.05 (just above worst-case — maximum margin of safety). Sell alert = Bull IV × 0.85 (15% discount to bull case — above fair value range).
Verdict: Hold. NNN is a high-quality net-lease REIT trading close to its base-case intrinsic value. At $43.96, the 5.5% yield is attractive, but upside to $45–46 is limited. The 37-year dividend growth streak is real, but 2.5–3.2% growth means the dividend barely outpaces inflation. Accumulate below $41 (starter), add aggressively below $38 (full position). The stock becomes a Sell above $52, where yield compresses below 4.6% without sufficient growth to compensate.
📂 Current Position Summary
| Metric | Value |
|---|---|
| Shares Held | 5,296.57 |
| Average Cost Basis | $40.02 |
| Current Market Value | $232,837 |
| Unrealized P&L | $+20,868 (+9.8%) |
| Annual DPS | $2.400/yr |
| Annual Dividend Income | $12,712/yr |
| Current Yield (at price) | 5.46% |
| Yield on Cost | 6.00% |
| vs Target (~$200K) | $232,837 / $200,000 (116%) |
🔧 Model Notes & Calibration
| Assumption | Rationale / Notes |
|---|---|
| DDM Base (AFFO-aligned) | Using DPS of $2.40 (2026 annualized $0.60/quarter × 4) as DDM base. AFFO per share guidance midpoint is $3.55 for 2026. AFFO payout ratio ~67.5% — well within sustainable range for a REIT. |
| Growth Calibration | Stage 1 growth at 3.2% matches 2026 AFFO guidance midpoint ($3.52–$3.58). NNN has delivered 2.5–3.5% dividend growth annually for the past decade, so 3.2% is well-anchored. |
| Ke Build | Ke = 4.25% (10-yr Treasury) + 0.805 × 5.5% (ERP) = 8.45%. Beta from Finnhub reflects REIT's lower systematic risk. Terminal growth at 2.5% consistent with long-run nominal GDP. |
| Analyst PT Anchoring | Base IV targeted near analyst consensus PT of $45.13. DDM at 3.2% growth and 8.45% Ke produces base value close to $44–$46, consistent with consensus. |
| REIT Quality Notes | Using REIT-adjusted quality scorecard. Debt/EBITDA of 5.5× is normal for net-lease REITs (not a red flag). ROIC excluded — not meaningful for asset-heavy REITs. FCF margin of 72% reflects D&A-heavy accounting. |
Bore Family Office • Analysis generated by Lurch • Not investment advice.