BUY Conviction4/5 Analysis quality80/100 now
John Klost recommends Tanger Factory Outlets (SKT) as a special situation REIT, currently yielding 4%. He notes that the company's financials are recovering post-pandemic, with funds from operations up 63% year-over-year. As a REIT, it's required to pay out over 90% of earnings as dividends, suggesting a potential increase to 7-8% yield on cost as the business fully heals and rents are renegotiated.
“If you buy today yes you get the four percent today it's not out of the realm of possibility that you're going to be getting seven percent eight percent on your cost basis in a year from now.”