U.S. REITs: Longest Dividend-Paying Stocks — Tanger Outlets

chart01

Tanger Outlets has enjoyed an incredible combination of growth and track record. This shopping centers company has emerged as a top operational performing REIT in our US equity REIT ranking. In addition, shareholders have benefited from a 22 year history of either same or increased quarterly dividends. Although there are a plethora of experts that have recently predicted the demise of shopping centers, Tanger continues to not only survive, but also thrive by expanding their footprint. Just take a nice drive to a property and see it for yourself.

I have to say that shopping centers are not our preferred sector. The category is close to other retail sectors, including free standing, and regional malls, in terms of dividend growth potential. This refers to the potential of an average REIT, nothing more or less. Regardless, Tanger has an ideal profile for people that invest in dividend stocks.

chart02.pngSeveral long dividend-paying stocks have good records in our analysis. Many have accumulated twenty plus years of steady dividend payouts, however the benefits end there for several of them. Many of these same REIT stocks have an average or below average cash flow generation, or profitability. That being said it is fine to enjoy the benefits of a stock’s accomplishment, especially if they have durable dividends. Funding is less costly providing them with access to better deals, and management is more commitment to making the dividend payments. With Tanger Outlets investors can actually have both.

For example, the company’s Q3 performance has been on par with their Q2 figures. Funds from operations (FFO) per share have increased by 13 percent year over year versus 15 percent in Q2. The dividend is still 19 percent higher than it was last year, and the 2015 FFO per share is expected to gain 20 percent.

Although the stock appears to be fairly priced, (price to FFO 15.5x versus the sector median of 16.3x), and dividend yield is at 3.4 percent, which is on the low side for a REIT, it is actually down 16 percent from its peak last January.

Source: Tanger Factory Outlet Centers, Inc. (NYSE:SKT) 

Disclaimer: This newsletter is not engaged in rendering tax, accounting, or other professional advice through this publication. No statement in this issue is to be construed as a recommendation to buy or sell any security or other investment. Please do your own due diligence before making any investment decision. Some information presented in this publication has been obtained from third-party sources considered to be reliable. Sources are not required to make representations as to the accuracy of the information, however, and consequently the publisher cannot guarantee accuracy.

Disclosure: The author has no positions in any shares mentioned, and no plans to initiate any positions within the next 72 hours.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s