Through its subsidiary partnership, Simon Property owns or has an interest in about 230 properties in the United States and Asia. The company also has a 28.9% interest in Klepierre, a European REIT with over 260 shopping centers in 13 countries.
One key driver of growth will include the $1.0 billion or more of development/redevelopment planned over the next few years. The company also posted solid results with net income attributable to common stockholders coming in at $617.3 million, or $1.88 per diluted share, as compared to $254.2 million, or $0.83 per diluted share in 2020.
Results for the second quarter of 2021 include a non-cash gain of $118.4 million, or $0.32 per diluted share, because of the reversal of a deferred tax liability associated with an international investment.
Shareholders receive a 4.58% distribution. Goldman Sachs recently raised its $148 price target to $163. The consensus target is $138.71, and Simon Property stock ended trading on Tuesday at $128.1.
SL Green Realty
This is a leading large-cap office REIT that the Goldman Sachs team prefers now, and it is a solid contrarian play. SL Green Realty Corp. (NYSE: SLG), Manhattan’s largest office landlord, is a fully integrated REIT focused primarily on acquiring, managing and maximizing value of Manhattan commercial properties.
As of December 31, 2020, it held interests in 88 buildings totaling 38.2 million square feet. This included ownership interests in 28.6 million square feet of Manhattan buildings and 8.7 million square feet securing debt and preferred equity investments.
During the past year, SL Green Realty grew its earnings by 44%. The share price gain of 56% certainly outpaced the earnings growth. This indicates that the market is now more optimistic about the stock. While the Manhattan market is just coming back to life, and the new vaccine rules may slow the reopening, this is a very solid long-term play.
Investors receive a generous monthly 5.01% dividend. Goldman Sachs has set a $93 price target. The consensus price objective is $77, and SL Green Realty stock closed most recently at $72.91.
These five top companies pay dependable distributions. With the stock market horribly overbought, inflation posting some of the biggest jumps in years and interest rates still at generational lows, moving capital to hard assets now makes a ton of sense. Investors should remember that REIT distributions may contain return of principal. And note that most of these stocks closed either higher or just slightly lower after the Tuesday sell-off.