Shares of real estate investment trust (REIT) stock Simon Property Group (SPG -0.66%) jumped 13.1% in the first four trading days of the week, according to data provided by S&P Global Market Intelligence, driven by a strong earnings report.
The performance of this mall owner has been simply outstanding coming out of the pandemic. In the third quarter of 2021, net income jumped from $145.9 million a year ago to $679.9 million, or $2.07 per share. Funds from operations were $1.18 billion, or $3.13 per share, up 52.7% from a year ago.
Occupancy at malls and premium outlets was 92.8% and the base minimum rent was $53.91 per square foot. For perspective, in the third quarter of 2019 occupancy was 94.7% and base minimum rent was $54.55 per square foot, so performance is back to near pre-pandemic levels.
With any REIT, the dividend payout is watched closely and management increased the dividend to $1.50 per share for the quarter, a 15.4% increase over a year ago and a 7.1% sequential increase.
Despite the risk that malls would be one of the places hurt most during the pandemic, companies like Simon Property Group have come through nearly unscathed and are now thriving. I don't see any reason to think this momentum won't continue and with shares now trading for an implied yield of 3.6% it's a strong dividend in today's environment.