Affordable Dividend Sharesboast Impressive Earnings Reports -- Find Out Why They're Worth Investigating Further
In the latest financial updates, both Tanger Factory Outlet Centers (SKT) and Realty Income Corporation have announced increased full-year guidance and impressive second-quarter results.
Tanger Factory Outlet Centers, a pure-play outlet mall REIT with approximately 40 outlet properties, primarily located along coastal and tourist-heavy areas, reported a 9.4% year-over-year growth in funds from operations (FFO) in the second quarter. The company also raised its full-year FFO guidance, reflecting the strength of its second-quarter results. Tanger's spreads on new and renewal leases were 12% during the quarter, and its portfolio occupancy stood at 96.6% at the end of the period, marking an 80-basis-point sequential increase. The average tenant at Tanger had $465 per square foot in sales over the past 12 months, $27 more than a year ago.
Meanwhile, Realty Income Corporation, a leading REIT known for its diverse portfolio of over 15,000 single-tenant properties, primarily retail in nature, also reported strong second-quarter results. The company increased its full-year FFO guidance midpoint, with Realty Income's tenants selling non-discretionary products, being service-based, or deeply discount-oriented. In the second quarter, Realty Income invested $1.2 billion in properties at an average initial yield of 7.2%. The company also issued about $1.3 billion in new debt at an average interest rate of about 3.6%.
Realty Income pays a 5.7% dividend yield in monthly installments, making it an attractive investment for income-focused investors. Tanger, on the other hand, offers a 3.7% dividend yield that is nicely covered by its cash flow.
Both Tanger and Realty Income trade at premium prices relative to their FFO. Tanger trades for about 14 times FFO, while Realty Income trades for 13.4 times expected FFO.
The current leadership of Tanger Factory Outlet Centers includes President and CEO Michael J. Colaneri, while Realty Income's leadership is headed by Chairman and CEO Sumit Roy.
It's worth noting that the author of this article owns both Tanger and Realty Income in their portfolio, with Realty Income being one of their largest investments.
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