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Tanger's Solid Fundamentals Make It A Buy


  • In this article, I take on the task of writing about a "Battleground" stock/company - Tanger Factory Outlet.
  • I consider the company a buy, and during the Coronavirus drop, I added more as it fell. While problems exist and risks are there, I argue for the long-term quality.
  • I find both extremes of sides (Bull/Bear) as being too far out and focus on the fundamentals of the business in relation to the valuation we're having.
  • SKT is a "BUY".

I rarely write about these types of businesses. However, when I see valuation that "bothers" me, it's hard to stay silent. I want to preface this article by saying that Tanger Factory Outlet (NYSE:SKT) is a stock with a higher risk level than your typical, "safe" dividend stock. However, it also comes with a proportionally higher sort of reward - and I argue that the risk is far smaller than some bears would make it out to be.

I come into the stock not having bought at $40/share, nor at $30, nor $20. My first position was initiated at around $15/share, and I've been averaging down since. I'll show you why I've done that in this article (the valuation portion) and why I'll keep doing it as we go forward.

Tanger Factory Outlet is one of my very few REIT picks. Others include Simon Property Group (SPG), which is my largest (over 3.5% of my portfolio), as well as small positions in Macerich (MAC) and Public Storage (PSA).

So, let's go through this step by step. Since many of my readers don't typically read about American REITs, I'll take this from the ground up.

Bildresultat för tanger factory outlets logo

Tanger Factory Outlet - what does the company do?

Tanger Factory Outlet is Real Estate Investment Trust - a REIT. This particular REIT invests in shopping centers specifically containing outlet stores. The stores are focused primarily along the east coast NA, and SKT is headquartered in North Carolina.

(Source: Motley Fool)

Some quick stats on the location include:

  • 39 locations in 20 states + Canada
  • 14.3M sqft of retail space
  • 88% are located in Top 50 MSA leading tourism destinations

When looking at a REIT like this, part of the focus should be on tenants and occupancy as well as the later focus on

This article was written by

Wolf Report profile picture
Leader of iREIT on Alpha
The #1 Service For Safe and Reliable REIT Income

Mid-thirties DGI investor/senior analyst in private portfolio management/wealth management for a select number of clients. Invests in USA, Canada, Germany, Scandinavia, France, UK, BeNeLux. My aim is to only buy undervalued/fairly valued stocks and to be an authority on value investments as well as related topics.

I am a contributor for iREIT on Alpha as well as Dividend Kings here on Seeking Alpha and work as a Senior Research Analyst for Wide Moat Research LLC.

Analyst’s Disclosure: I am/we are long SKT, SPG, PSA, MAC. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

While this article may sound like financial advice, please observe that the author is not a CFA or in any way licensed to give financial advice. It may be structured as such, but it is not financial advice. Investors are required and expected to do their own due diligence and research prior to any investment. I own the European/Scandinavian tickers (not the ADRs) of all European/Scandinavian companies listed in my articles.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

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