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2 High-Yield Dividend Stocks You Definitely Want to Consider

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With the Dow Jones Industrial Average flirting with the 20,000 mark and the S&P 500 up by 8% over the last two months alone, stocks may seem to be getting expensive. While there's no way to accurately time the market, and stocks could continue to climb from here, I'd like to focus on two high-income stocks that look like bargains right now.

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SPG data by YCharts .

Although the loss of nearly a quarter of the share price may raise some eyebrows, it's important to point out that Simon Property Group's business is doing just fine. Simply put, Simon's objective is to own the best places to shop in the United States.

Chances are that you can think of a crummy, run-down mall that you've been to. Simon's properties are the opposite, with higher-end and trendy retailers, modern facilities and amenities (things like valet parking and free Wi-Fi), and lots of restaurants and newer stores to keep up with changing consumer tastes. For example, lots of Simon's mall properties contain specialty grocery stores such as Whole Foods .

Additionally, one reason I love Simon Property Group as a company is that it actively tries to partner with its tenants to provide the best shopping experience possible. One particularly innovative example is Simon's exclusive cash-back gift card designed to be used at its malls. 5% of every purchase is automatically credited back to the gift card -- for example, if you buy a $100 Simon gift card to give as a holiday gift, and the recipient spends all $100, an additional $10 will be put on the gift card, effectively making the gift worth $110. How successful this was remains to be seen, as we don't have any holiday data yet, but the point is that Simon is willing to innovate and collaborate with its tenants, which should prove to be a long-term competitive advantage over peers.

The company has grown aggressively since its 1993 IPO, with a total of $40 billion in acquisitions since then and a lot of development activity. And the growth keeps coming. In fact, the current development and redevelopment pipeline is nearly $2 billion in size.

The combination of aggressive growth and smart management has paid off tremendously for investors. Since its 1993 IPO, Simon has produced annualized total returns of 16.1%, on average -- a remarkable level of performance to sustain for 23 years. To put this in perspective, a $10,000 investment in Simon's IPO would be worth more than $300,000 today.

As far as the financials go, Simon Property Group has the highest investment-grade credit rating (A) of any U.S. retail REIT, and boasts a low 28% debt-to-capital ratio, one of the best in the real estate industry.

Invest for the long haul

To be perfectly clear, these stocks have underperformed in 2016, but there's a clear reason behind it -- expectations of rising interest rates. And before you buy, it's important to be aware that this trend could continue, especially if rates rise faster than expected. For example, if President-elect Donald Trump's growth plans are successful, we could see rates shoot up even higher than the Federal Reserve has forecast, and these stocks could drop as a result.

However, these businesses are all long-term winners, and if you approach them with a reasonably long investment timeframe (say, five years or more), there's no reason to believe they won't deliver strong performance.

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John Mackey, co-CEO of Whole Foods Market, is a member of The Motley Fool's board of directors. Matthew Frankel owns shares of Public Storage and Whole Foods Market. The Motley Fool owns shares of and recommends Whole Foods Market. Try any of our Foolish newsletter services free for 30 days . We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy .

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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