Sometimes investing is a game of patience, and that's where income-generating stocks can reward your loyalty. A steady flow of distributions can come in handy, and the fine art of dividend investing is often just a matter of parking yourself in the right high-yielding opportunity.
Tanger Factory Outlet Centers (SKT 0.07%), AMC Entertainment (AMC 0.44%), and AT&T (T 0.89%) are three investments generating yields north of 5% that belong on your radar. I happen to own all three personally, but let's get into why I think they belong in your dividend-hungry portfolio.
Tanger Factory Outlet Centers
Head out to a shopping mall this year, and you may be surprised to find parking spaces despite this being the peak holiday gifting season. The allure of e-tail is only getting stronger, and that's making it harder for malls to attract both shoppers and investors.
Tanger is a leading operator of factory outlet centers, serving as the landlord to the clearance shops for many popular retailer chains. Traditional malls may be running on borrowed time, but factory outlets centers are holding up better offering up the discounted prices that deal seekers are used to in the new age of e-commerce with the convenience of instant fulfillment gratification. Vacancies at Tanger don't last long given its 96% occupancy rate, and tenant sales have inched higher over the past year.
Like most publicly traded mall operators, Tanger is structured as a real estate investment trust (REIT) that hands over nearly all of of its funds from operations to its investors. With a current yield of 9.5%, this is as close as you can get to an all-weather shopping REIT play, stomaching the risk of its tenants that file for bankruptcy given the dicey climate for brick-and-mortar chains in general.
A record number of people will be trekking over to the multiplex later today to see the Star Wars: The Rise of Skywalker, but investors are generally steering clear of movie theater chains. A night at the movies isn't as tempting as it used to be, and it doesn't help that streaming services that offer a month of access for less than the price of a pair of movie tickets are only gaining momentum.
AMC is the country's largest multiplex operator, but it's not at its best right now. The stock has shed more than half of its value since its springtime peak, and that has pushed the yield north of 10%. BofA analyst Bryan Goldberg doesn't expect the beefy rate to last, and not because the stock will appreciate to the point where it drives the payouts lower. He feels that there are a lot of headwinds facing AMC, and that a dividend cut is certainly possible in the near future if business continues to deteriorate.
The silver screen silver lining here is that AMC isn't afraid to disrupt itself. It has taken a page out of the playbook of streaming services offering a smorgasbord of content by rolling out AMC Stubs A-List, a subscription plan it introduced in the summer of 2018 that lets folks see as many as three movies a week for a monthly price of roughly $20. The plan is helping keep its screens more active than many of its more cautious rivals, and that should make AMC a survivor in this niche.
Tanger and AMC have had challenging years with both stocks down sharply in 2019, but that's not the case with AT&T. The telco giant has soared 44% year to date, beating the market. The stock's 5.4% yield is naturally lower than when it was trading north of 7% at the start of the year, but investors don't mind given the capital appreciation that's taken place in 2019.
AT&T's wireless business continues to thrive, and it's scoring early wins on the Time Warner assets it acquired last year. There are naturally laggards in its portfolio, largely its legacy wireless operations and its DIRECTV satellite television arm. However, with AT&T's board shaking things up in light of activists rattling the cage, the end result will be more focus on the parts of AT&T that are growing in this climate. Armed with confidence after decades of annual dividend hikes, if this yield does drop below 5%, it will be the handiwork of the stock trading nicely higher.