Well covered — light leverage, long leases. A quarterly single-tenant net-lease payer: the dividend was raised 2.3% to $0.225 a share in the second quarter of 2026, and AFFO covers it at a 64% payout — $0.35 of Q2 AFFO a share against the new rate. The portfolio was 100% occupied on a 10.0-year weighted-average lease term across 859 investments leased to 156 tenants, with investment-grade and investment-grade-profile tenants at 56.5% of annualized base rent. Adjusted leverage of 3.2× sits well below the company's 4.5–5.5× comfort range, and 2026 AFFO guidance of $1.37–$1.39 a share covers the $0.90 annualized dividend at about 65%. Growth is real but equity-funded — AFFO a share grew 6.1% in Q2 while the portfolio grew much faster — so the share count is the number to watch. For a REIT, the House reads AFFO payout — never the EPS payout, which depreciation makes meaningless.
Key risk: Equity-funded growth — expansion is paid for largely with new shares and forward equity, so if acquisition spreads compress, per-share AFFO growth stalls even while the portfolio keeps growing; retail-tenant credit is the second watch.
Changes if: The AFFO payout pushes well past ~64%, adjusted leverage rises toward the top of the 4.5–5.5× comfort range, or occupancy slips below ~99%. The cushion is the verdict.
- ✓AFFO coverage check: 64% of AFFO paid out at the new $0.225 rate — Q2 AFFO was $0.35 a share, up 6.1% year over year — and full-year 2026 AFFO guidance of $1.37–$1.39 covers the $0.90 annualized dividend at about 65%. A real cushion for a REIT.
- ✓Yield check: ~5.2% is earned — backed by 100% occupancy and a 10.0-year weighted-average lease term across 859 investments in 46 states, with 56.5% of annualized base rent from investment-grade or investment-grade-profile tenants and no reliance on a single tenant.
- ✓Leverage check: 3.2× adjusted net debt to annualized adjusted EBITDAre at June 30, 2026 (3.1× pro forma for subsequent ATM sales), well below the 4.5–5.5× comfort range, with about $1.09 billion of pro forma liquidity. The watch item is dilution: growth is funded with equity, so per-share AFFO growth trails portfolio growth.
What this grade doesn't say: It screens the dividend only — covered, real, compounding. It says nothing about valuation or price: a well-covered payer can still be overpriced, and its price can still fall.