GREENSBORO, NC – Tanger Factory Outlet Centers, Inc. (NYSE: SKT) announced today that its Board of Directors has approved a 6.1% increase to its quarterly dividend, raising the payment to $0.26 per share. This marks the 28th consecutive year that Tanger has increased its dividend, underscoring the company’s commitment to delivering value to shareholders.
The new dividend represents an annualized rate of $1.04 per share and a yield of approximately 4.5% based on Tanger’s closing share price of $23.19 on October 12, 2023. The dividend will be paid on November 15, 2023 to shareholders of record as of October 31, 2023. The ex-dividend date is October 30, 2023.
Tanger’s track record of consistent dividend growth stands out in the retail REIT sector. While many retail landlords were forced to cut dividends during the pandemic, Tanger maintained its payout throughout the crisis. This enabled the company to emerge in a position of strength, ready to resume sequential dividend increases.
The latest hike comes as Tanger continues to rebound from the impacts of COVID-19. Occupancy rates have climbed back above 90% after dipping into the mid-80s% range during pandemic-related shutdowns. Traffic and sales productivity have also recovered close to pre-pandemic levels.
The company’s outlook is further brightened by its focus on outlet centers, which offer resilient value-oriented retail. Shoppers have become more cost-conscious amid high inflation, playing into the discount appeal of Tanger’s properties.
Tanger also stands to benefit from secular tailwinds as brands increasingly turn to off-price retail channels. Outlet stores generate strong profitability compared to traditional mall locations, especially as more shopping moves online.
CEO Stephen Yalof commented: “The resiliency of our portfolio, balance sheet strength, and consistent ability to deliver quality earnings growth provides us flexibility to strategically expand our dividend distribution.
We remain committed to our core strategy of maintaining a strong balance sheet, recycling capital, and delivering steady dividend growth from our durable cash flows.”
Tanger will fund its latest dividend increase while maintaining a conservative payout ratio below 65% of projected 2023 AFFO. The company expects to generate sufficient cash flow going forward to support further incremental dividend growth over time.
Tanger’s financial position is bolstered by its capital recycling strategy, which has unlocked value through sale-leaseback transactions. Since launching this program in 2021, Tanger has sold four non-core assets and realized gross proceeds exceeding $170 million.
Meanwhile, selectively developing new centers with pre-leased stores continues to be an avenue for Tanger to boost NOI. Construction is currently underway on company’s first ground-up development in over a decade located near Nashville, TN.
With a prudent balance sheet and multiple levers to drive growth, Tanger appears poised to sustain its long-running dividend growth streak. The latest 6.1% raise signals management’s upbeat assessment of the business and optimism for continued success as a leading outlet operator.
For income-focused investors, Tanger offers an increasingly attractive yield backed by 28 years of payout increases.