Safe Dividend Stocks for the Next Market Crash: Simon Property Group (SPG)
SPG Dividend Yield: 4.1%
5-year Annual Dividend Growth Rate: 13.2%
Simon Property Group (NYSE:SPG) is the largest real estate investment trust (REIT) by market cap. The company owns 227 malls totaling 189 million square feet of retail space in North America, Europe and Asia.
And lest you think that malls are going the way of the dodo, the fact is that the high-end, premium properties Simon specializes in are actually doing very well.
In fact, despite Amazon’s seeming relentless butchering of brick and mortar retailers, Simon’s occupancy rate is at a record high 96.3%. And that’s after another year of strong rent increases that sent rent/square foot soaring 10.9% and adjusted funds from operations or AFFO (REIT equivalent of free cash flow) per share up 6.8% for the first nine months of 2016.
Better yet? Thanks to a strong development pipeline of highly profitable (cash yields as high as 10%) investments coming into service in 2017, this year’s AFFO/share is expected to rise by an even stronger 11.6%. For a REIT of this size, that is truly impressive growth.
With one of the strongest balance sheets and lowest AFFO payout ratios in the industry (61%), not just is the generous dividend secure, but it’s also likely to grow at around 7% over the long-term.
So Simon isn’t just one of the better dividend stocks you can own despite being so tethered to retail, but it should hold its own in a market crash.