![]() The REIT may have already announced their next upcoming dividend value, which may be different from previously paid dividend value. I believe the stock can be priced at least modestly higher, at a price/FFO of 11x, and its hefty 6.2% yield should be a promising catalyst for this.*The forward annualized dividend and dividend yield are based on the most recent dividend value paid by the REIT. This is quite odd to me since Simon features multiple qualities, including market-leading rents per square foot, a diversified portfolio of properties, and skilled management with shareholder value creation in mind. At the midpoint of management's FFO/share outlook, the current forward price/FFO stands at 9.75x, implying a significant discount from its peers' average. ![]() That said, I believe that the stock remains modestly undervalued. Shares of Simon have rallied by 34% from their 52-week lows. Based on this, I would say there is a high chance that Simon's will sustain these quarterly increases, possibly until the quarterly rate reaches its levels prior to the cut ($2.10/quarter). Well, the $7.20 annualized dividend suggests a comfortable payout ratio of 61% at the midpoint of Simon's updated guidance. The question that arises now is whether these attention-drawing sequential increases can be sustained. That's quite an established trend already! Along with its Q3 results, the company raised its dividend for a seventh consecutive quarter to a quarterly rate of $1.80, celebrating a 2.9% increase sequentially, or a 9.1% increase year-over-year. While Wall Street should be pleased by SPG posting solid growth in revenues and FFO/share, I believe what has actually driven the stock's recent gains were its successive dividend hikes, which have likely captured investors' attention.įollowing Simon slashing its dividend amid the pandemic, the company has now increased it for seven sequential quarters. Successive Dividend Hikes Attract Investor Attention At the midpoint, this is only 4.1% away from the company's pre-pandemic FFO/share of $12.37 in Fiscal 2019. ![]() They are now expecting SPG's funds from operations per share (also known as FFO/share, the cash flow from a real estate company) to land in the range of $11.83 to $11.88 (up from $11.70 to $11.77 previously). Thus, seeing growing NOI, including the Taubman properties, should reassure investors of management's confidence to allocate capital efficiently.įinally, backed by SPG's better-than-expected results, management boosted its prior outlook once again. At the time, the market was somewhat skeptical of the buyout. I like this number, but most importantly, I like the fact that it indicates that Taubman has been accretive to the company's results. ![]() Its portfolio's net operating income (NOI), which includes its domestic properties, its overseas properties, and the acquired Taubman properties, rose by 3.2% compared to Q3 2021. Simon is capitalizing on its improving rent revenues and operating metrics to drive higher profitability. In fact, occupancy was 94.5% at the end of the quarter compared to 92.8% at the end of Q2, suggesting a substantial increase of 170 basis points. To be more specific, higher revenues were driven by the ongoing recovery in the retail real estate market, robust leasing momentum, and improving occupancy levels. With foot traffic in malls resuming and retailers once again looking for prime locations to set shop, Simon achieved total revenues of $1.32 billion in its most recent Q3 results, indicating a 1.5% increase from the comparable period last year.
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