5% Yield, Strong Growth Potential, And Sustainable Dividend Growth REIT Trading At A Substantial Discount

Looking for a sustainable 5% Yield with 3% to 4% expected growth? Here’s an excellent fit for buy-and-hold investors. Dividend growth rate should average around 3% to 4% increases or around a 2% rate of increase over inflation. I believe a 2.5% growth rate assumption would be very conservative. Rent per square foot continues to grow. This company is trading at a substantial discount to the fair value of their net assets. The one major risk to the company would be their leverage during a market panic.

Macerich (MAC) is the third largest of the traditional mall REITs. There’s only so much that can be said on half a presentation slide. However, there is some history you may want to know. Simon Property Group (SPG) offered to buy MAC. Management of MAC rejected not one, but two takeover offers from SPG. The higher of the two valued MAC at $95.5 per share. MAC’s management claimed this valuation was materially below the value of their real estate assets. The fair value of their assets is dramatically higher than total share value. Recent prices are mid $50s. Share price has fallen substantially since SPG made their offers. At current prices, MAC is trading at a great discount.

Source: Seeking Alpha

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