I opened a new position with the purchase of Tanger Factory Outlet Centers, Inc. (SKT)
126 shares @ $16.50 on 6/14/2019.
This increases my forward 12-month dividend income by $178.92 to a total of $8,788.40. I also updated my portfolio page to reflect the change.
My Thoughts
This is my second buy lot of this company. I first made my first purchased on April 16. Since that time the stock price has decreased. I believed that the company was underpriced when I first purchased it, and now it is even more undervalued to my intrinsic value.
The company has been increasing its dividends for 26 constitutive years. They sport a 5-year and 10-year dividend growth rate of 9.5% and 6.4% respectively. Tanger most recent dividend increase was earlier this year of just 1.4%.
I do not see them increase its dividend more then 2-3% for the foreseeable future. The company is currently having issues with filling up vacancies spots as well as consumers are continue to move to e-commerce.
Currently, SKT has a dividend payout ratio of 63% based on projected AFFO of $2.24 for 2019.
I find SKT to be undervalued, and I recommend it as a BUY at this time. I have a fair value price at $26.35. This means that SKT is 62.5% Undervalued based on today’s price of $16.21 (6/30/2019).
Source: Fastgraphs.com
What do you think about the company? Plan on owning it or already do? or why not?
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FV –
Great pick up and think they are one of the higher quality real estate companies out there. We have quite a few Tanger outlets within 3 hours of us and will say – they are some of the more well-developed/maintained/higher traction outlet malls.
Also – their metrics look very, very good and did not realize that. I may have to look deeper to potentially add them to my portfolio, as well. Congrats.
-Lanny
HI Lanny,
Thanks! I have never been to one, but thanks for giving me your observations. I think this company is very undervalued based on the information I have. Take a look and let me know what you think of the company. Thanks for stopping by.
I recognize that a couple of financial bloggers who I‘m following started to initiate a position in SKT as of late (or at to their already existing positions).
I also still like SKT’s business model and think that outlet centers will have their place in an Amazon-dominated world.
Could you tell me your source for FFO/AFFO estimates?
Thanks in advance!
– David
Hi David!
I agree with you. Outlet centers will still have a place. People love to go out and do something. They love to feel and touch what they are buying.
I use fastgraphs for FFO estimates. Thanks for reading and commenting David.