...He calls it a bombshell strong buy. The yield is surely attractive, is the price decline more a case of bearish mall sentitment?https://seekingalpha.com/article/4242278-tanger-outlets-pure...
....and I thought Brad Thomas had run out of superlatives for SKT. ;-)Cheers!MurphBL and MFPP Home Fool(long SKT and DRIPing)
Dividend Sensei also puts it at the top of his High Yield Dividend Growth best buy now list...https://seekingalpha.com/article/4242310-best-dividend-stock...
Did anyone notice that Brad Thomas only lists five REIT holdings - SKT, SPG, KIM, TCO & UNIT?He normally lists 10-20 REIT holdings. Notice that four of the five own retail properties. Wonder if he is down to five or just didn't list all his holdings?
I guess those are the tickers mentioned in the article. He owns almost all REIT's :)
I guess those are the tickers mentioned in the article. He owns almost all REIT's :)Except for CBL and WPG when CBL cut their dividend and he finally decided they might be to risky :)Andy
Nice Call on UNIT, too.
I have no interest in who thinks this or that about some stock....my interest is in how well the company can grow its cash flows.I just updated SKT's CFs for 4Q18, and they do indeed appear strong. Using rolling 4Q periods, for 3Q18 ==> 4Q18Revenue/share 1.317 ==> 1.323, a very modest increaseNet CFFO/Share .638 ==> .672, where Net CFFO = CFFO - preferred div - Dist to Non-Controlling InterestsInterest Expense as % of [CFFO + Interest]: 20.2% ==> 20.1% Again, modest improvement, but this ratio has been virtually unchanged over past 20QDividend-to-Net CFFO payout ratio: 54.6% ==> 52.2%, another modest improvement and very favorable for a retail REITPercent of CFFI paid with Net CFFO AFTER dividends: 166% ==> 300% This is VERY unusual for a REIT, who, due to the requirement they distribute most of their cash, rarely have enough cash left to pay for all their investing activities. Most REITs I follow, if they are in the 30% - 50% range, they're great performers. This means there is cash left for financing activities...Paid-Down Debt for 4Q18: 124.8MMSKT has another unusual financial character: the past 5 Cash Flows from Financing Activities, or CFFA, after adding back common and preferred dividends, have been ($MM) -8, -4, -16, -21, -36. This represents the amount of financing capital that has been repaid or bought down (a negative number on the Statement of Cash Flows means a net payout from the company). Again, this is VERY unusual for a REIT. Even the better REITs I track show CFFA, with dividends added back, a usually a positive value with an occasional negative value.You just don't see many REITs this strong with this kind of consistently positive trending cash flows. Now, does SKT face headwinds in the Retail arena...I'm sure they do. And some of their CF metric growth is indeed slowing. Indeed, SKT has had periods of slowing CFs and corresponding slow dividend growth. Annual dividend growth was <1% 2000-2003 and 2009-2011. SKT finished 2018 with a 2.9% dividend growth rate, the lowest since 2011 when it was 2.6%. It would seem evident that SKT management is conservative in their cash management.This is probably one of the better 6.6% yielding stocks around.Just one viewBruceM
I'm in SKT. It got beat up with the retail/mall REIT stocks in the Amazon online shopping REIT selloff last year. I thought it was being painted with too broad a brush and thought I saw a good price on a good company.. Outlet malls are almost as "destination" resort type thing for a certain swath of Americans. A lot of folks go as much for the outing as much as anything in some parts of the country. IMHO, outlet malls seem to have a different, somewhat disconnected market dynamic than typical malls sensitivity to online shopping.Currently SKT is:1.45% of my total portfolio2.24% of my total portfolio income
Have been mulling over a purchase of SKT at these levels. Have owned it in the past. I don't recall why I sold it since I don't keep notes on such things, assume wasn't overly confident in their future. The retail sector still taking some lumps of late.I have found that in the past when I buy something that is in the cellar it tends to stay there and on the other hand when I buy something that is growing and rising it continues to do so (to a point of course).Brad Thomas has been beating the drum to buy them for 18 months. Economy pretty well humming along, appears more square feet of retail space will be vacant if we continue the present path....When I buy a stock I like to keep it long term generally. What is the path for SKT to grow and prosper? Yield is good.Thanks for your comments!
I have mixed feelings on malls, outlets and other retailer based REIT's. Projecting the past 20 years for the future seems incorrect. There is a reason why they are cheap, I think.
I had purchased SKT in the 30s, then I sold out early this year.Why?- Management is great- Headwinds of economy, internet, location- People are moving to City Centers, away from suburbia and this bodes ill for SKT.- Most of their renters are for goods that suffer from internet competition, reducing SKT's pricing power.- In the event of a recession, I could see the dividend yield spiking to 10% on SKT.- Dividend growth shouldn't be great.- Difficult to see alternate purposes for their outlet centers. A city center store could with som effort become an office, or condo. City Malls/Shopping Centers could become multipurpose areas with some residential, office, retail etc. What do you do with something that's 20 miles from major city centers?I still love the company and have great respect for the management, unfortunately I have come to the conclusion that there are too many headwinds from the economy, demographic and social changes for SKT to be a decent investment going forward.I'd rather invest in BRX or KIM.
2 other thoughts:1. Outlets could become Warehouses/Industrial Lots as most Tanger Outlets are on major Highways/interstates etc.2. I have a very poor opinion of Brad Thomas, in my opinion he has made a name for himself by riding the coat tails of a bull market in REITs and at the same time has little regard for his readers, who believe in what he writes. Despite "Caveat Emptor", "do your own research" etc; I believe that there is a responsibility towards people who place their trust in you and your work.My standards are higher than most people, and that let's me sleep better.
I'd rather invest in BRX or KIM. Me, too, coolprash. I have stayed away from SKT for the reasons you articulated in spite of the attractive dividend yield.DavidLong BRX and KIM
Thank you for the input on SKT, I picked up a starter position a couple of weeks ago and was looking and thinking about it again before buying more and I started to have second thoughts. I considered many of the cons that you have listed so likely won't be buying more. KIM appears better positioned for the future with a good yield and also there is BPR and BPY (have quite a bit of BAM also) that I wanted to look into some more. Do own some O, ARE, and SPG but pretty light in REIT's overall. Good investing to you and thanks again to all......
I too am considering purchasing SKT. It would be my first time buying this well known REIT.What I like about it most are:1) Cheap.2) Good occupancy rate.3) Good dividend and good coverage. I will probably hold off for now for the following reasons;1) I would like to wait and see how the economy, retail, and SKT's fundamentals progress over another quarter or two.2) Would like a cheaper entry price, $18 perhaps.3) The short interest scares me, I've learned to respect the short sellers. 4) Remember when enclosed malls were destinations, could a similar shift hit the outlets?Schwab provides analyst reports from CFRA, previously S&P's. They see SKT a little different than Brad Thomas with a target price of $18. I have seen that neither CFRA/S&P or Brad Thomas bats anywhere near 1,000!
I appreciate the contrarian view of SKT voiced here. About increasing urbanization etc...It's a good ponder for me and a caution. I'll keep that in view. Have not had plans to add to it other than reinvesting distributions. Currently it's less than 3% of my portfolio income and less than 2% of total holdings so I've got some risk/diversification buffer against those contrarian concerns. I think the significance of rural and suburban culture and migration and sales in flyover red states may be underestimated. Are the roving bands of blue haired ladies in red hats who go thrifting, antiquing and to outlet mall areas for retail therapy weekends going to go the way of the American Bison? Or will they continue to roam the prairies and woodlands outside of the blue coasts?
<Or will they continue to roam the prairies and woodlands outside of the blue coasts?>Surely this pilgrimage will go on thru the eons of time (at least in my neck of the woods here in Central MO)haha..carry on.......
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