Tanger Factory Outlet Centers
Tanger Factory Outlet Centers (SKT - Get Report) is a real estate investment trust (REIT) that owns 37 outlet centers in 25 states, comprising more than 11.4 million square feet of leasable space. Tanger benefits from creating a destination in its outlet malls -- shoppers are typically willing to spend whole days at the outlets, a factor that gives SKT a traffic advantage over more fragmented retail REITs. All told, more than 175 million shoppers visit Tanger properties each year.
Generally, investors think of REITs as a way to gain exposure to real estate, but that's not exactly the case. Instead, these trusts are really income-generation vehicles -- they typically sign long-term triple-net leases that separate ownership of retail properties from the risks associated with insurance, property tax, and maintenance costs. And because REITs are legally obligated to pay out the vast majority of their incomes as dividends, they're purpose-built to deliver income to investors.>>10 Dow Dogs That Are Barking for Gains Last Thursday, Tanger announced a 5% increase in its dividend payout, bringing the REIT's quarterly payout to 21 cents per share. That's a 2.84% dividend yield at current price levels. I do think that there are some more attractive niche REITs out there right now, but there's something to be said for Tanger's ability to draw shoppers as a destination in good times and bad. Follow @stockpickr