Shopping for Income? This Stock is On Sale

Shopping for Income? This Stock is On Sale

In good times and bad, people love a bargain. Today we have an opportunity to own a company who provides bargains at a bargain –with the possibly of 40% growth in stock price while earning a dividend of 6.2% along the way.

Understand, I’m not someone who loves shopping, and evidence of what some call the retail armageddon is clear. Thousands of stores are closing every year, bankruptcies for retailers are at an all time high, and ecommerce hit it’s crescendo last holiday. I never would have believed that I would be recommending a stock based on brick and mortar retail, but amidst the rubble and destruction there are winners, and Tanger Factory Outlet Centers is one worthy of our consideration.

eCommerce hasn’t put a dent in this outlet powerhouse who’s been in business since 1981. Outlet stores in general have doubled their sales over the past 5 years to $50 billion, and Tanger, who has properties in both the US and Canada continues to grow as well through thoughtful planning and execution. With high profile tenants such as Nike and Polo Ralph Lauren, their occupancy rates have not dipped below 96% since the company went public 1993.

CEO Steven B. Tanger, in their Annual Report, proudly reported their 14th consecutive year of net operating income growth and their 24th year of consecutive dividend increases.

Tanger is still family owned, and the business is organized as a real estate investment trust (REIT). If you’re familiar with REIT’s you know this model doesn’t pay corporate income taxes, but is required to return most of it’s cash flow back to investors via distributions or dividends. Their annual payout per share has only grown since 1993 as well, from $0.1338 to it’s current day $1.3525. At it’s current price, this is a 6.2% yield – not too shabby.

Our opportunity here is that Tanger’s share price has temporarily fallen because Wall Street has mistakenly lumped it in the same basket as retail stocks most of which I wouldn’t touch with any length of pole. Today we can load up on this bargain below $25 (it’s at $23 as of this writing) and wait for it to return to it’s 2017 high of over $37 per share.

So what would investing in 108 shares today look like in 5 years’ time?

Investment cost: $2,484; 108 shares @ $23/share, 6.2% dividend yield reinvested for 5 years

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

You would end up with $3,403.66 for a total gain of 37.02%. Since this is over 5 years, that would make your average annual gain 7.40% and this is doesn’t even factor in any rise in share price, which could easily be in the double digits. 

ACTION: Buy shares of Tanger Factory Outlet Centers (SKT) up to $24.50

Costco Savings and Secrets

Costco Savings and Secrets

Oh, Costco. How we have a love hate relationship with you. We love the high quality selection, the savings, and of course the free samples throughout the warehouse. We hate the crowded parking lots, long lines, and the fact we can’t leave there without spending at least $100, and entering another small line to have you highlight our receipts.

While these are things we know about Costco, today we will share some fairly unknowns about the big box retailer including ways to shop at Costco without having a membership. Yes, you can still shop at Costco without a membership under certain conditions. 

Use a Gift Card

You can shop with a Costco gift card. According to Costco.com  “Members and non-members may use the Costco Cash Cards to shop at any Costco location in the United States, Puerto Rico, Canada and online at Costco.com.”

Fill a Prescription at the Pharmacy

Like many products and services, Costco frequently has the lowest prices on medications and you don’t have to be a member to use the pharmacy.

Test Your Hearing or Vision 

No membership is required to use Costco’s hearing and optical services for screenings or examinations. Actually purchasing the hearing aids or glasses, however would require a membership. Find a friend who has a membership and they can purchase them for you, or use the costco gift card.

Even frequent Costco shoppers may not be aware of some other fairly unknowns, such as pricing structure and coupons. Costco coupons come out every Thursday. And you might not be aware that while most regular priced items are priced ending in .99, if a product ends in .97 you know it’s most likely been marked down. Other prices ending in .49, or .79 is sometimes a signal that it was a special buy for Costco and might be the lowest price you can find for that item.

At themoneybeat.com we love our red wine, and recently found a bottle that is priced the same as wine club members get for that particular winery from Paso Robles, CA.

Sometimes you may also see  “” in the upper right-hand corner of the price tag. Most likely, this is an item that is limited and you may not see again as it isn’t going to be reordered.

Have a Costco secret you would like to share? We would love to hear it!

 

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