Kimco Realty Corp.
), a real estate investment trust (REIT), has recently declared a
quarterly dividend of 19 cents per share or 76 cents on an
annualized basis for the second quarter of 2012. The dividend is
payable in cash on October 15, 2012, to shareholders of record on
KIMCO REALTY CO (KIM): Free Stock Analysis
SIMON PROPERTY (SPG): Free Stock Analysis
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A steady dividend payout facilitates the long-term strategy of
Kimco to provide attractive risk-adjusted returns to its
stockholders. Investors looking for high dividend yields are
increasingly favoring REITs like Kimco, which presently has a
decent yield of 3.8%. Solid dividend payouts are arguably the
biggest enticement for REIT investors as U.S. law requires REITs to
distribute 90% of their annual taxable income in the form of
dividends to shareholders.
Kimco intends to pay its dividends from operating cash flows. The
company maintains a conservative dividend payout ratio to maintain
an optimum mix of investments to fuel its growth engine as well as
strengthen its balance sheet by reducing debt and increasing its
Over the years, Kimco has established a track record of
conservative capital management and has historically maintained
strong investment-grade debt ratings. Furthermore, the company has
continuous access to capital through debt or equity financing, that
provide the necessary resources to expand and develop its business.
With a geographically diverse portfolio concentrated mostly in
high-income, high-growth areas, Kimco is the largest publicly
traded owner and operator of neighborhood and community shopping
centers in the U.S.
The company generally signs long-term leases with high credit
tenants, which limits the downside risk and provides a steady
source of income. Given the current uncertainty in the capital
markets, Kimco has also modified its business strategy to focus on
core retail competencies. The company intends to concentrate its
future investments on the neighborhood and community shopping
center segment, primarily focusing on the North American market.
We maintain our long-term Neutral recommendation on Kimco Realty.
However, we have a long-term Outperform recommendation for
Simon Property Group
), one of the competitors of Kimco.