We recently published a list of the 12 Best Mid-Cap Dividend Aristocrats to Invest in Now. In this article, we are going to take a look at where NNN REIT, Inc. (NYSE:NNN) stands against other mid-cap dividend aristocrats.
There’s a common misunderstanding that dividend payouts are mostly limited to large-cap companies, but mid-cap firms are often just as generous—and notably stable—when it comes to dividends. Recently, mid-cap dividend stocks, which had fallen out of favor, are making a comeback and drawing renewed interest from investment strategists. The MidCap Dividend Aristocrats Index, which includes 53 mid-sized companies that have raised their dividends for at least 15 consecutive years, has declined just 1.2% year-to-date through May 5. In comparison, the broader market has dropped 3.7% over the same period. Notably, these mid-cap companies generate about 82% of their revenue from within the US, significantly higher than the roughly 60% average for broader market firms and 53% for those in the Nasdaq Composite, based on data from S&P Dow Jones Indices and FactSet as of April 30.
Alongside investors, analysts are also recommending that income portfolios include mid-cap companies. According to Simeon Hyman, global investment strategist at ProShares, these stocks can help cushion downside risk amid current market volatility. He noted that this is particularly relevant for investors whose portfolios are heavily weighted toward large-cap growth names like the “Magnificent Seven” tech giants. Hyman emphasized the importance of diversifying equity exposure across a wider range of asset classes to help manage risk in today’s environment.
Analysts are leaning toward mid-cap dividend stocks largely because they appear undervalued. As of April 30, the MidCap Dividend Aristocrats Index had a price-to-earnings (P/E) ratio of 17.87, which is significantly lower than the P/E ratios of the broader market and the Nasdaq. Larry Adam, chief investment officer at Raymond James, made the following comment about this:
“Now is the time for bargain-hunting since midcap dividend stocks are trading at historically low valuations relative to large-cap stocks. They could be the sweet spot for investors when you consider they are more insulated from tariff exposure and are expected to outpace the earnings growth of large-caps this year.”
According to analysts, instead of picking individual mid-cap dividend stocks, investors should consider exchange-traded funds (ETFs) as an alternative. These funds offer tax efficiency and diversification across multiple industries and typically come with low expense ratios.
For instance, the WisdomTree U.S. MidCap Dividend ETF (DON), which manages $3.47 billion in assets, posted a year-to-date return of -6.47% through April 30, with a 12-month return of 4.72% and a 12-month yield of 2.54%. Its expense ratio stands at 0.38%. Meanwhile, the ProShares S&P MidCap Dividend Aristocrats ETF (REGL), with $1.69 billion in assets, returned -1.88% so far this year, delivered a 6.96% one-year return, and yields 2.60% over 12 months. Its expense ratio is 0.40%, according to Morningstar Direct.
Though both ETFs are showing negative returns for the year, their dividend payouts help cushion losses. Financial advisers often recommend reinvesting those dividends rather than withdrawing the cash, as this approach can build wealth over time by acquiring more shares while prices remain subdued.
NNN REIT, Inc. (NNN): One of the Best Mid-Cap Dividend Aristocrats to Invest in Now
An exterior view of a modern retail property, embodying a landlord’s real estate investment.
Our Methodology
For this list, we scanned the holdings of MidCap 400 Dividend Aristocrats, which tracks the performance of mid-sized companies within the MidCap 400 index that have maintained a consistent track record of increasing dividends annually for at least 15 years. From the index, we picked 12 dividend stocks that have garnered the most attention from hedge fund investors by the conclusion of Q4 2024, using data from Insider Monkey’s database. The stocks are ranked according to the number of hedge funds having stakes in them.
At Insider Monkey, we are obsessed with hedge funds. Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
NNN REIT, Inc. (NYSE:NNN) is an American real estate investment trust company focused mainly on restaurant properties, typically secured through long-term triple net leases, often arranged as leaseback agreements. As of March 31, 2025, the company’s portfolio included 3,641 properties spread across all 50 states, encompassing a total gross leasable area of roughly 37.3 million square feet, with an average remaining lease term of 10 years. The stock has surged by over 5% since the start of 2025.
NNN REIT, Inc. (NYSE:NNN) reported strong earnings in the first quarter of 2025, with its revenue coming in at $230.8 million, up by over 7% from the same period last year. The company’s revenue and EPS of $0.51 beat analysts’ estimates by $11.01 million and $0.03, respectively. It continued to demonstrate strong balance sheet flexibility, supported by a sector-leading weighted average debt maturity of 11.6 years, a fully unencumbered asset base, and minimal exposure to floating rate debt at just 2.5%. In addition, the company maintained robust liquidity, with $1.1 billion in total available resources. Occupancy levels remained high at 97.7%, closely aligned with NNN’s 20-year average of 98.2%, reflecting consistent portfolio stability.
In addition to its solid earnings this quarter, NNN REIT, Inc. (NYSE:NNN) is also a strong dividend payer. It is among just three publicly traded real estate investment trusts that have raised their annual dividend for at least 35 consecutive years. The company offers a quarterly dividend of $0.58 per share and has a dividend yield of 5.49%, as of May 5.
Overall, NNN ranks 8th on our list of the best mid-cap dividend aristocrats to buy now. While we acknowledge the potential of NNN as an investment, our conviction lies in the belief that some deeply undervalued dividend stocks hold greater promise for delivering higher returns, and doing so within a shorter time frame. If you are looking for a deeply undervalued dividend stock that is more promising than NNN but that trades at 10 times its earnings and grows its earnings at double digit rates annually, check out our report about the dirt cheap dividend stock.
