Please ensure Javascript is enabled for purposes of website accessibility

Simon Property Group Cuts Its Dividend; Yield Falls to 7.6%

By Eric Volkman – Jun 30, 2020 at 5:29PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The REIT's distribution is chopped by nearly 40%.

Simon Property Group (SPG 0.70%) is conserving financial resources by reducing its quarterly dividend. The company's board of directors has declared a new payout of $1.30 per share, which is 38% lower than the $2.10 per share it most recently distributed.

As a real estate investment trust (REIT), Simon is obligated to hand out at least 90% of its net profits as shareholder dividends. But since it is a retail REIT, it has struggled with mandatory store closings around the country, not to mention "stay at home" orders in many locations.

A person cutting a set of U.S. currency bills.

Image source: Getty Images.

The dividend cut was announced within an operational update issued by the company. In that document, Simon took pains to point out that it has around $8.5 billion in liquidity, comprising roughly $3.5 billion in cash, and $5.0 billion available in potential borrowings from a term loan and revolving credit facilities. 

The REIT added that nearly all of its properties have reopened -- 199 out of a total of 204, to be exact. These represent 95% of its overall net operating income. It expects the remaining five properties to reopen in the coming days.

Meanwhile, the company is locked in a legal fight with a would-be acquisition, peer Taubman Centers. The two REITs had agreed to merge in February, but Simon scotched the deal in the wake of the SARS-CoV-2 coronavirus pandemic. Taubman would like to see it consummated. The pair are scheduled to go into mediation on the issue in July.

Simon's upcoming dividend is to be handed out on July 24 to stockholders of record as of July 10. On the latest closing share price, it would yield 7.6%.

On Tuesday, Simon shares inched up by almost 0.4%. That lagged behind the gains of the broader stock market.


Eric Volkman has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Simon Property Group, Inc. Stock Quote
Simon Property Group, Inc.
$89.75 (0.70%) $0.62
Taubman Centers, Inc. Stock Quote
Taubman Centers, Inc.

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
S&P 500 Returns

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 10/01/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.