National Retail Properties (NNN) Stock Sinks After Pricing Public Offering

NEW YORK (TheStreet) -- Shares of National Retail Properties (NNN) were falling 1.7% to $38.28 Tuesday after the REIT priced an offering of 4.75 million shares of common stock.

National Retail Properties priced the public offering of 4.75 million shares of common stock at $38.16 a share. The underwriters of the offering have a 30-day option to buy up to 715,000 additional shares of common stock.

The company said it plans to use the net proceeds from the offering to repay outstanding indebtedness under its credit facility. National Retail Properties will use ant remaining net proceeds to fund future property acquisitions and for general corporate purchases.

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TheStreet Ratings team rates NATIONAL RETAIL PROPERTIES as a Buy with a ratings score of A. TheStreet Ratings Team has this to say about their recommendation:

"We rate NATIONAL RETAIL PROPERTIES (NNN) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its increase in stock price during the past year, growth in earnings per share, revenue growth, expanding profit margins and increase in net income. Although no company is perfect, currently we do not see any significant weaknesses which are likely to detract from the generally positive outlook."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • The stock has risen over the past year as investors have generally rewarded the company for its earnings growth and other positive factors like the ones we have cited in this report. Turning our attention to the future direction of the stock, it goes without saying that even the best stocks can fall in an overall down market. However, in any other environment, this stock still has good upside potential despite the fact that it has already risen in the past year.
  • NATIONAL RETAIL PROPERTIES has improved earnings per share by 10.7% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past year. We feel that this trend should continue. During the past fiscal year, NATIONAL RETAIL PROPERTIES increased its bottom line by earning $1.06 versus $1.03 in the prior year. This year, the market expects an improvement in earnings ($1.15 versus $1.06).
  • Despite its growing revenue, the company underperformed as compared with the industry average of 13.7%. Since the same quarter one year prior, revenues slightly increased by 9.2%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • The gross profit margin for NATIONAL RETAIL PROPERTIES is rather high; currently it is at 60.47%. Regardless of NNN's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, NNN's net profit margin of 43.60% significantly outperformed against the industry.
  • The net income growth from the same quarter one year ago has exceeded that of the S&P 500, but is less than that of the Real Estate Investment Trusts (REITs) industry average. The net income increased by 8.1% when compared to the same quarter one year prior, going from $44.35 million to $47.94 million.
  • You can view the full analysis from the report here: NNN Ratings Report

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