Simon Property Group (
), the largest shopping mall operator in the U.S., has nearly
doubled its cash dividend over the past couple years as profits
The quarterly payout has gone from 60 cents a share at the
start of 2010 to $1.10 a share now. In this year alone, the
company has increased its dividend by 5 cents a share in all four
Meanwhile, the stock has climbed 22% this year, outpacing the
S&P 500's 14% rise. It's currently just 3% below an all-time
high as it climbs the right side of a saucer base. The annual
dividend yield is 2.8% at the current share price, well above the
S&P average of 2.1%.
Simon owns, develops and manages more than 300 malls and other
properties in North America, Europe and Asia.
Profit, revenue and the dividend have bounced back after
declining in the 2008-09 recession. Earnings dropped 7% in 2009,
were flat in 2010 and grew 14% in 2011. The Street sees 14%
growth this year.
As a real-estate investment trust, or REIT, Simon must pay 90%
of its taxable income as dividends.
Simon's base shows tight trading, with a modest shakeout on
the left side of the pattern followed by an uptick in
accumulation on the right side. The bottom of the base shows an
upside reversal in strong volume, a bullish sign.
Accordingly, the stock's Accumulation-Distribution Rating has
risen from D+ at the Nov. 16 bottom to B- now, indicating net
positive demand for the shares.
Yet Simon remains vulnerable to any hiccups in the economy
that might affect consumer spending. The Commerce Department said
Friday that personal income and spending for November rose 0.6%
and 0.4%, respectively, beating expectations. But the
Reuters-University of Michigan consumer sentiment index for
December plunged 9.8 points to 72.9 amid worries about the fiscal
And while annual pretax margin and cash flow have risen
solidly in the past two years, the company's debt-to-equity ratio
is a hefty 397%.
) on Monday upgraded Simon Property from neutral to buy, saying
the company's outlets and malls should provide solid income