SPG - Simon Property Group Can Go Higher After Increased Dividend And 2024 Guidance

2024-06-07 12:00:00 ET

Summary

• Simon Property Group has seen a 40.86% increase in shares over the past year, proving the demand for physical retail.
• SPG's occupancy rate is above 95% and the base minimum rent per sq foot continues to increase, driving value for shareholders.
• Despite the potential risks of a credit crunch and a recession, SPG's strong financials and leasing activity make it an attractive investment.

Despite a narrative that convinced some of the investment community that physical retail was on its way to extinction, I have consistently been bullish on Simon Property Group (SPG). Class A malls offer much more than physical retail as they are anchored by restaurants, movie theaters, and other attractions that help create experiences. While some Class B malls have fallen on hard times, most Class A malls are supported by high-end brands in affluent areas with large amounts of traffic. SPG is finally back to its pre-pandemic levels, as shares gained 40.86% over the past year. While instant gratification and an emphasis on time allocation have become front and center driven by the popularity of smartphones and tablets, there is still a large demand for physical retail. After comparing SPG to its peers, I still believe it's attractively valued, especially after increasing its dividend for the tenth time since reducing the dividend during the pandemic, and raising its 2024 guidance . I was at a large SPG mall the other day, and everything was packed, from the restaurants to the stores. SPG continues to drive value for its shareholders as their occupancy rate is above 95%, and the base minimum rent per sq foot continues to increase. Even though shares of SPG have outpaced the market over the past year, I feel there is still a lot of value to be unlocked, and SPG can not only appreciate further, but shareholders can still benefit from a growing dividend....

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