A 4.56% Dividend Yield REIT With 160% Coverage

A fat dividend yield rewards intelligent investors. Beware the attack of the stupid narrative. FFO is growing rapidly and so is the dividend. I just bought shares. I’m suggesting an initial “buy under” target of $165 and placing the “strong buy under” line at $155. Investors should limit total exposure to any one subsector, especially mall REITs. Digging through mortgage REITs reinforced my skepticism and taught me the importance of taking complex subjects and breaking them into a simpler premise.

Simon Property Group (SPG) is under attack by a stupid narrative. The premise is that malls are dying, and the growth in sales for Amazon gives the narrative room to run. The underlying facts don’t fit the story, but if potential investors don’t visit the malls, they may imagine them to be the bombed out husks of a once vibrant civilization. Simon Property Group’s properties are anything but neglected and rundown vacant structures. Their dividend is secure. Their financial performance is strong. The biggest delay in analyzing them is simply working through the combination of consolidated and unconsolidated positions. In my view, SPG is a strong REIT and is an excellent fit for the buy-and-hold investor looking for another solid dividend growth stock.

Source: Seeking Alpha

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