If you’ve been following Sears Holdings Corp. (NASDAQ:SHLD) and Macy’s Inc.’s (NYSE:M), it may be difficult to believe that strong companies in the retail space still exist.
Sears had been posting losses since 2012. And Macy’s fundamentals have been deteriorating since 2015; its long-term growth is estimated to be about 2% per year, which would be hardly keeping pace with inflation. One should, of course, avoid investing in these types of retailers.
However, it’s not all bad in the retail space. Here are a few quality stocks whose fundamentals have remained strong as they face the challenges in the industry.
Simon Property Offers a ~4.4% Yield
Simon Property Group Inc. (NYSE:SPG) is a global leader, which owns premier shopping, dining, entertainment and mixed-use destinations with properties across North America, Europe, and Asia.
In the second quarter, Simon Property slightly increased its guidance for the year (due to the elimination of some debt), and now estimates to generate $11.14 to $11.22 funds from operations per share, which would represent a growth of ~7% compared to 2016.
As well, management also increased its quarterly dividend to $1.80 per share, which represents a boost of nearly 9.1% from a year ago. Simon Property has hiked its dividend payout every year since 2011.
At ~$164.50 per share, Simon Property is reasonably priced at a multiple of ~15 (and some say even undervalued because the quality shares have historically commanded a premium multiple of ~18). Here the best three places to look for safe dividend income.