Simon Property Group ( SPG ), the largest shopping mall operator in the U.S., has nearly doubled its cash dividend over the past couple years as profits revived.
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 quarters.
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 cliff.
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%.
Nevertheless,Citigroup ( C ) on Monday upgraded Simon Property from neutral to buy, saying the company's outlets and malls should provide solid income growth.
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