The ShinesRooms.com Provides Stock Research on Simon Property Group Inc. and General Growth Properties Inc.
New York City, New York -- Retail property companies are doing well on the back of improving economic scenario. With customers returning back to the malls and showrooms, these REIT companies are able to gain higher occupancy rates for their properties. Major companies like Simon Property Group (SPG) are increasing their dividends to provide better return to their investors while General Growth Properties Inc. (GGP) also posted better quarterly results. However, the sector still is expected to remain cautious as the occupancy rate is likely to be mild in the near future. Established retail companies may also face increased competition from new entrants with better infrastructure.
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Simon Property Group Inc. reported healthy financial numbers for its fourth quarter. The company reported its revenue at $1.34 billion, handily beating consensus estimate of $1.30 billion. Its funds from operations also increased to $2.29, up from $1.91 per share it had reported for the corresponding quarter of the last year. Simon Property stock grew 16 percent in the past 12 months and coupled with 2.74 percent dividend yield is at attractive investment venue. The company has a long streak of reporting better-than-expected results and thus the stock is expected to keep performing well into the foreseeable future. Simon Property also reported increased dividend. It is the consecutive sixth quarter for the company to pay higher dividends.
Simon Property is one of the leading outlet center and Mall companies in the U.S. The company expects its FY 2013 FFO to be in the range of $8.40 to $8.50, again higher than consensus estimate of $8.41 per share in FFO. It is also expanding itself as it bought 28.7 percent interest in Klepierre SA. The company further plans capital outlay of $5 billion over the course of next four years. Simon Property has solid balance sheet, healthy plans and strong track record of positive results and its stock price is expected to grow further.
Conversely, General Growth Properties Inc. recently reported good fourth quarter results, which were not as spectacular as Simon Property results, but still quite positive. It saw 5 percent surge in revenue at $675.7 million, while its net income jumped to 4 cents per share, up from a loss of 39 cents per share it had incurred in the corresponding quarter of the last year. The company has come a long way from 2009 bankruptcy proceedings. General Growth Properties is now ready to buy back some of the stock it had sold to Fairholme and Blackstone at that time and the fact shows that the company is back on the right track.
General Growth Properties still has a long way to go. Despite the growth in economy, the company may see high vacancy rate. General Growth Properties currently focuses on premium properties with higher margins. It plans to divest out of non-core properties and streamline its business. While the company’s dividend yield is lower than that of its peers’, General Growth Properties announced dividend at one cent higher for its first quarter. The company is looking to pay 12 cents per share in dividend, making its dividend yield 2.20 percent.
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Michael Thomas Smith
- Investment & Company Information
- Simon Property Group
- General Growth Properties