Steven Tanger joined Tanger Factory Outlet Centers (NYSE: SKT ) , founded by his father in 1981, as the company's fourth employee. The company had grown to 13 outlet centers by 1992, and the following year became the first outlet center developer to be listed on the New York Stock Exchange as a publicly traded REIT, under ticker symbol SKT. Tanger has been president and CEO since 2009, and the company's portfolio, growing steadily, now includes more than 40 outlet centers across the U.S. and in Canada.
Tanger Outlets did very well, even through the meltdowns of 2001 and 2008. In this video segment, Steven Tanger describes the company's extraordinary performance -- with sales rising in all but one quarter over the last 10 years -- and how it was possible.
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Tom Gardner: Last question: 2001, stock market melted down; 2008, the stock market melted down; two unbelievable events for investors to have happen within a single decade. What happened to SKT, Tanger's stock, during those two periods? I know the answer -- I went and looked back -- but it's notable.
Steve Tanger: Well, thank you.
We are, I think, one of two -- out of 140 REITs -- that have had at least 35 consecutive quarters of comp NOI growth, even through the recession. We're one of a handful of REITs that, even through the recession, raised their dividend every year. And, even through the recession in the last 10 years, we only had one quarter where our sales went down slightly. Every other quarter, our sales went up.
The concept of factory outlets, and the love of the consumer for finding a bargain, sustains us. Also, having a balance sheet that's a fortress sustains us. Today, about 28% of our enterprise value is debt, versus the opposite for most real estate people. Most real estate people have 70% debt and 30% equity. We have the opposite.
Today, only 5% -- maybe 6% -- of our enterprise value is floating-rate debt, so we have no exposure to the fluctuations in the 10-year Treasury. And only 5% of our enterprise value is secured debt, securing our assets, so we are very safe, and have a huge cash flow.
Our cash flow, after dividends, is about $80 million a year, which pays for one of the two shopping centers we've built, or our share of two joint ventures, so we almost self-finance, which is pretty nifty.
Gardner: Unbelievable. What I look for -- Motley Fool ONE members know -- when I look for a great investment, I look for leadership that's bought in, that has a long-tenured stake in that business; I look for excellent underlying financials, a fortress of a balance sheet; I look for great growth opportunities; I look for demonstrated excellence over the period of time of that company's existence; I look for loyalty of all stakeholders.
One of the things I love, to evaluate a business along these lines; there's a marketing study that came out from a firm in the last year, that showed that consumers say 73% of the brands that they encounter could disappear, and it wouldn't actually matter to them. And, as we know, more than 70% of people who go to work say that they're indifferent or slightly negative about the company that they're working for.
I think Tanger is a great example of a company that... consumers are happy to see the mall coming. They're excited when that mall comes to their neighborhood, and you've got great tenure throughout your ranks and employees and leaders at Tanger.
So, congratulations on the last 20 years in the public markets, 30-plus years as a business overall, and we're looking forward to following along for the next 20.
Tanger: Thank you. Thank you for having me, Tom. I appreciate it.
Gardner: Thanks, Steve.
Tanger: Congratulations on the business you've built, too.
Gardner: Thank you.