Dead Dividend Stocks Are Just Stocks To Sell

This research report was produced by The REIT Forum with assistance from Big Dog Investments.
Sometimes I come out with buy ratings.
Sometimes I come out with sell ratings. Those generate more emotional responses.

Let's see what happens when you don't listen…
Simon Property Group Simon Property Group (SPG) is still a buy. They have been a buy since summer of 2017. SPG is the best of the mall REIT operators. They have the best net operating margins on their properties and they have the best scale on their overhead expenses. Consequently, they are able to extract more value out of each property than any of their peers. On average, SPG's portfolio is very high quality. It is not quite as good as the portfolio for Taubman Centers (TCO) measured by sales per square foot, but they still have the best margins. For comparison, CBL Properties (CBL) and Washington Prime Group (WPG) have much lower quality assets. WPG has recently outperformed and therefore they get a hold rating. There is a very material gap between those two REITs and Simon Property Group.
Simon Property Group has several great factors going for them. They have excellent growth in FFO per share each year. They have raised the dividend year after year. The yield is already over 5%. They still have a conservative payout ratio so they have a great deal of free cash flow available for redeveloping properties. Bon-Ton (BON), J.C. Penney (JCP), and Sears (SHLD) are all in the process of... Read more