What happened

The stock market was modestly higher on Thursday, with all three major indexes up by 0.5% or less as of 11:45 a.m. EST. However, retail real estate investment trust Tanger Factory Outlet Centers (NYSE:SKT) was a major standout, with shares up by more than 13% for the day.

So what

Tanger's business was hit hard by the pandemic. Most of its properties were closed for several months in 2020, and several of its largest tenants went bankrupt. So it came as a pleasant surprise to investors today when the company announced that it will reinstate dividend payments after having suspending them indefinitely as the pandemic spread.

Person with shopping bags walking towards a mall entrance.

Image source: Getty Images.

Specifically, Tanger announced that it will pay a cash dividend of $0.1775 per share on Feb. 12 to common shareholders of record as of Jan. 29. This is exactly half the $0.355 quarterly dividend it had been paying before the pandemic. Based on the current stock price, this quarterly payout translates to an annualized yield of about 5.4%.

Now what

To be sure, Tanger's business took a hit. Its vacancy level is the highest it's been since its 1993 initial public offering. But the company is comfortably profitable (with positive cash flow throughout the fourth quarter), so it isn't a total surprise that management is confident enough to start distributing some of its income.

Since most people invest in REITs like Tanger for income, this is certainly welcome news. It opens Tanger up as a potential buy for income-seeking investors (as well as dividend-based funds), so that's the main reason we're seeing such a big gain today.