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Simon (SPG) Partners With Five Below to Boost Sales & Traffic

Simon Property Group, Inc. SPG, the behemoth in the retail real estate market in the United States, has announced an expansion of its partnership with Five Below, Inc. FIVE, a leading retailer of trendy products for teens and tweens, to open more stores at its properties by 2023.

Five Below will offer a variety of products for tweens, teens and beyond at seven or more Premium Outlets locations. The new stores will launch starting this spring and summer of 2023 at Albertville Premium Outlets, Pleasant Prairie Premium Outlets, Johnson Creek Premium Outlets, Gaffney Outlet Marketplace, Indiana Premium Outlets, Pismo Beach Premium Outlets and Pocono Premium Outlets.

Five Below is also coming to Great Mall, a Mills property, in Milpitas, CA, and Miller Hill Mall in Duluth, MN, this year. Further, FIVE is undergoing a complete makeover at Arundel Mills in Hanover, MD.

This partnership is a win-win for both companies as it allows Simon to fill spaces with a popular and fast-growing retailer, which can appeal to younger consumers and boost sales per square foot. It also allows Five Below to leverage Simon's prime locations and large customer base to expand its market share and brand awareness.

Currently, Simon owns or has a stake in more than 250 premier retail destinations worldwide. Meanwhile, Five Below operates 21 stores within the Simon portfolio.

Simon Property Group is a good investment choice for income-oriented investors who are looking for a high dividend yield and a stable cash flow from a leading retail real estate company that has shown resilience and adaptability amid challenging times.

The company has a track record of paying dividends for several years and recently increased its quarterly dividend by 2.78% sequentially to $1.85 per share. This translates to an annualized dividend yield of 7.01% (considering SPG’s Thursday’s closing of $105.54), which is higher than the average of 4.93% for its industry. However, limited consumers’ willingness to spend due to macroeconomic uncertainty and high interest rates could affect SPG’s top-line growth.

Shares of this Zacks Rank #3 (Hold) company have declined 3% in the past year compared with its industry’s fall of 1.5%.

Zacks Investment Research
Zacks Investment Research

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A Stock to Consider

A better-ranked stock from the retail REIT sector is Saul Centers, Inc. BFS, which carries a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

The Zacks Consensus Estimate for Saul Centers’ ongoing year’s FFO per share has been revised marginally upward over the past month to $3.03.

Note: Anything related to earnings presented in this write-up represent funds from operations (FFO) — a widely used metric to gauge the performance of REITs.

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Simon Property Group, Inc. (SPG) : Free Stock Analysis Report

Saul Centers, Inc. (BFS) : Free Stock Analysis Report

Five Below, Inc. (FIVE) : Free Stock Analysis Report

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