FTSE 100 incumbent LondonMetric Property (LSE: LMP) looks like it has all the hallmarks to become a potential future Dividend Aristocrat, in my eyes.

Here’s the thinking behind my assertion, as well as why I’d love to buy some shares when I next can.

Diversified property

You might have already guessed from the name but LondonMetric makes money from diversified property assets. From a returns view, it’s set up as a real estate investment trust (REIT). This is a huge plus, as it means that the business must return 90% of profits to shareholders.

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LondonMetric shares have risen 16% in the past 12 months from 175p at this time last year, to current levels of 204p.

My investment case

First off, I’m a big fan of LondonMetric’s business model. In most cases, REITs tend to focus on one type of property. LondonMetric possesses a diversified range of assets, which can help offer protection against a downturn in one area. Plus, it’s capitalising on popular trends to grow profits and hopefully returns. A prime example of this is its exposure to logistics facilities in the wake of the e-commerce boom.

Furthermore, it understands market trends. For example, it is moving away from office space as working from home trends have risen since the pandemic. Plus, a recent acquisition has given it access to defensive properties such as hospitals, which will give it good earnings visibility as demand for hospitals isn’t going to slow down.

Another aspect I like about LondonMetric’s modus operandi is targeting assets with long-term tenants for growth. These tenants are tied down to long-term agreements, and are less likely to default on rent payments.

Moving on, LondonMetric’s recent updates have confirmed its operating with a 99% occupancy rate, which is impressive, if you ask me.

Looking at returns, the shares offer a dividend yield of 5.2%. For context, the FTSE 100 average is 3.6%. However, I do understand that dividends are never guaranteed.

Finally, LondonMetric has a great track record of payouts, and has increased these for the past nine years in a row. However, I do understand that the past isn’t a guarantee of the future. If it can continue in this vein, I can certainly see it becoming a top dividend stock in the future.

Risks and my verdict

The biggest risk I’m concerned about right now for LondonMetric is debt levels. These can be trickier to manage during higher interest environments, like now. Plus, debt repayments can take precedence over growth and returns initiatives, so I’ll be watching with interest. However, it is worth noting the debt ratio compared to payout coverage on its balance sheet isn’t a concern, not yet at least.

A smaller concern is the firm’s propensity for acquisitions. They’re great when they work out, but can be damaging from a financial and investor sentiment perspective when they don’t.

Overall, I reckon LondonMetric could be a fantastic stock to buy for returns and growth. A diverse range of assets, defensive traits, and a good track record help my investment case.