Co-produced with Beyond Saving for High Dividend Opportunities
Washington Prime Group (WPG) is a mall REIT that is beaten down and trading at highly opportunistic valuations. Investors have been very negative on anything that is retail related, despite the fact that WPG has made significant progress in re-positioning their portfolio and is set to return to growth soon. No credit is being given by Mr. market for this progress. The dividend yield is today sky-high at 18.5% and unlikely to be reduced anytime during the year 2019. The bears have been betting on a dividend cut, and they have been wrong. We will explain in our report why we are very bullish on WPG, and this is likely one of the best opportunities in the Property REIT space.
Washington Prime Group has seen their share prices fall due to extreme pessimism surrounding malls, highly publicized tenant bankruptcies like Sears Holdings (SHLDQ), and the actions of CBL Properties (CBL) a REIT in the same space which has dramatically cut its dividend.
When the market is at its most pessimistic, it can create an opportunity to invest in a solid company at a substantial discount. We believe this is the case with WPG.
- WPG malls remain high-quality real estate with fundamentally strong values. Malls are changing, not dying.
- WPG has a good plan to redevelop vacant and soon to be vacant big box stores. The new tenants will be more attractive to modern consumers and will pay higher rents.
- WPG has the ability to fund their plan, without taking extraordinary measures.
- WPG is committed to maintaining their dividend at $1.00/year.
- Significant insider buying suggests that those who know the most believe shares are trading at a significant discount and that insiders' interests are well-aligned with shareholders.
'Retail Redefined' Source: WPG website
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