Simon Property Group (NYSE: SPG) - the REIT that owns Premium Outlets - has raised its dividends once again this year, and expects to distribute a record of $6 per share within the year. Year-over-year dividend growth has thus far reached 19 percent, and dividend yield is 3.2 percent - not bad for a supersize $58 billion market cap regional mall REIT.
During Q2 2015, FFO-per-share reached $2.63, including a $0.22 gain through securities sales, resulting in a net figure of $2.41 and giving us a 14 percent year-over-year growth. Same-property net operating income has increased 3.6 percent - lower than its own recent figures and Macerich's (NYSE: MAC) Q2 figure.
Management, taking advantage of a volatile REIT stock market, has repurchased shares, lowering the number of outstanding shares and units - a signal that they see no big deals on the horizon. They have focused on development or redevelopment of properties. Pursuing this strategy, Simon Property has partnered with Sears to redevelop their stores - a possible sign, too, that they will not pursue another offer to Macerich.
This share buyback is also interesting in that it gives us an interior bird's-eye view of where management stands on share prices. We may think the stock is trading on the lower side of the dividend yield (3.2 vs. the peer median of 3.6 percent) and on the high side of price-to-FFO (19.1x vs. peer median 15x); according to management, however, it looks cheap when high dividend growth in the future is embedded.
Source: Simon Property Group, Fast Graphs
Written by Heli Brecailo
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