NNN REIT (NYSE: NNN) flies under the radar of many investors. It doesn't have a flashy name -- the real estate investment trust (REIT) focuses on owning properties secured by triple net, or NNN, leases, hence the name. It's also not yet a member of the S&P 500 index due to its relatively smaller size.

However, it has done something that should catch the attention of dividend investors. The retail REIT recently delivered its 35th consecutive annual dividend increase. That put it in a very select group of dividend stocks.

A rare milestone

Many companies have long records of increasing their dividends. For example, there are over 400 stocks on the Nasdaq Dividend Achievers list, companies with 10 or more years of consistent dividend growth. However, the number of companies with longer track records of dividend growth is much smaller. Some companies haven't been public for much more than a decade, while many others had a period in the past where they stopped increasing their payouts.

Less than 80 publicly traded companies in the U.S. have reached the milestone of 35 or more years of consecutive dividend increases. The list of REITs hitting that level is even smaller. NNN REIT is only one of three companies in the sector that have achieved that landmark.

The keys to its success

NNN REIT employs a very simple investment strategy, which has been the key to its consistent results. It only invests in single-tenant net lease retail properties. That lease structure requires tenants to cover all operating costs, including routine maintenance, real estate taxes, and building insurance. Because of that, the REIT collects very predictable rental income that escalates each year at either a fixed rate or one linked to inflation.

It selects properties in strong markets that will be desirable to replacement tenants if the initial one doesn't renew its lease. It also owns a diversified portfolio based on geography, line of trade, and tenant. The company currently has about 3,550 properties in 49 states leased to 375 national and regional tenants in over 35 lines of trade. For example, its top lines of trade are:

• Convenience stores (16.4% of its annual base rent last year)

• Automotive service locations (15.6%)

• Restaurants (8.7% full-service and 8.5% limited service)

Meanwhile, its largest tenants were 7-Eleven (4.4%), Mister Car Wash (4.2%), and Camping World (3.8%). That diversification helps reduce risk and earnings volatility.

NNN REIT also has a very conservative financial profile. Its dividend payout ratio is 67% of its adjusted funds from operations (FFO), which is low for a REIT. That provides a lot of cushion for the dividend while enabling the company to retain cash to fund new investments. It also has a low-leverage balance sheet financed with long-term, low fixed-rate debt. The REIT has a weighted average debt maturity of 12.6 years, which leads the sector.