Dividend investors are always on the lookout for stocks that have a history of boosting their payouts regardless of economic conditions. The most stable and consistent of these are called Dividend Aristocrats -- members of the S&P 500 that have increased the amount they pay out for at least 25 consecutive years.

But it's not just S&P 500 constituents that have proven their reliability. One stock outside the index that has lifted its dividend for 32 consecutive years is National Retail Properties (NNN 1.61%).

Two of the major factors that have made National Retail Properties' dividend increase streak possible are the company's focus on single-tenant triple-net-lease retail properties and its diversification from both a geographic and an industry standpoint. Let's dig into both and see why National Retail Properties is a top dividend stock.

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The business model proved its strength

National Retail Properties is a triple net lease real estate investment trust (REIT) that specializes in acquiring single-tenant retail properties valued in the $2 million to $4 million range.

A triple net lease is a lease agreement where a tenant pays for all of the property's expenses, such as taxes, insurance, utilities, and maintenance, as well as the base rent. The base rent figure almost entirely flows to the landlord's bottom line, as it only needs to pay general and administrative expenses such as the salaries of office staff. Tenants with a triple net lease often enjoy the benefit of more freedom in customizing their space to fit their brand image. Landlords also collect a reliable source of income (lease terms are often 10 years to 15 years with built-in contractual rent increases) without needing to take an active role in overseeing the property.

And the benefit to acquiring single-tenant retail properties is that, unlike multi-unit properties (e.g., malls), there is no anchor store that has increased leverage over the landlord in base rent negotiations. When an anchor store is doing well, it draws traffic to a specific property, which then drives business for smaller tenants and helps them to be able to afford their rent. Conversely, if an anchor store goes out of business or moves, it can hurt smaller tenants.

Despite facing the most difficult operating environment in recent times last year, National Retail Properties held up fairly well in the early days of the COVID-19 pandemic and is positioned to return to pre-pandemic growth this year.

Even though National Retail Properties' cash collection rate of 89.7% for last year was well below its historical rate of close to 100%, it didn't take as much of a toll on the company as one might expect. National Retail Properties' adjusted funds from operations (AFFO, the REIT equivalent of earnings) fell 10.4% from $2.80 a share in 2019 to $2.51 a share in 2020. But with National Retail Properties' cash collection rate improving from its nadir of 69% in Q2 2020 to 99% in Q2 2021 amid better business conditions for tenants such as movie theaters and family entertainment centers, the company is forecasting that its AFFO per share will increase to $2.95 to $3.00 this year -- 5% to 7% over the pre-pandemic year of 2019.

A diversified real estate portfolio

Even though National Retail Properties' portfolio is entirely concentrated in retail, the second strength of the company helped to mostly overcome concentration risk at the peak of the COVID disruptions in Q2 2020.

National Retail Properties boasted 3,117 properties in 48 states as of Q2 2020 (compared to 3,173 as of Q2 2021), which means the company is geographically diversified to protect against weak regional economies, natural disasters in particular regions, and so forth. As COVID cases spiked and prompted lockdowns in some states last year, other states weren't hit as hard and partially offset the adverse economic impact.

In addition to being geographically diverse, National Retail Properties is also diversified among industries, with convenience stores accounting for 18% of the annualized base rent (ABR) in Q2 2021 and automotive service chipping in another 11.4%.

Even as movie theaters and family entertainment centers had to have their rent deferred last year, National Retail Properties endured the pandemic just fine. If the company was able to survive the challenges of last year only to bounce back this year, I think it's fair to say there aren't too many events that could cause this company to go insolvent.

A retail pure play fits nicely within a diversified REIT portfolio

While some investors may prefer to invest in more diversified REITs, such as W.P. Carey and steer clear of a pure-play retail REIT such as National Retail Properties, I believe there is as much of a place in a diversified REIT portfolio for the latter as the former.

National Retail Properties is benefiting from the economic reopening as more Americans are vaccinated. And even if the Delta variant prompts the reintroduction of restrictions and social distancing guidelines at some point, National Retail Properties has already proven once that it can emerge stronger from such an event.

National Retail Properties' 4.5% yield at Friday's prices is about in line with its 13-year median yield of 4.6%. The 4.5% yield is secure, since the AFFO payout ratio is going to be 70% to 71% for this year based on current company guidance, which suggests National Retail Properties could be a good buy for long-term investors.