Tanger: 4% Yield, Re-Tenanting Upside, Low FFO Multiple

Core Viewpoint - Tanger Inc. is positioned as a strong investment opportunity for long-term passive income investors due to its robust same center net operating income growth, high occupancy rates, and favorable lease expirations [1] Shopping Center Portfolio, NOI Growth and Re-leasing Opportunity - The trust has experienced a significant recovery in occupancy, reaching 97%, up from a low of 92% during the pandemic [21] - Positive rental spreads indicate strong demand for shopping center real estate, providing a catalyst for rental growth [3][5] - Between 2024 and 2026, 51% of the trust's lease base and 53% of its lease space are set to expire, presenting an opportunity for net operating income and funds from operations growth [13] Financial Performance and Projections - For the year ending December 31, 2024, estimated diluted FFO per share is projected to be between $2.02 and $2.10, with a current FFO multiple of 13.5x [7][18] - The trust's same center net operating income for Q1 2024 was $80.6 million, reflecting a year-over-year growth rate of 5% [22] - The blended rental spread in Q1 2024 was 12.9%, indicating potential for further NOI and FFO growth through higher lease rates [24] Dividend and Payout Ratio - Tanger's dividend was raised by 6% in April, bringing it to an annualized amount of $1.10, which translates to a 4.0% stock yield [11][17] - The funds from operations in Q1 2024 were $0.51 per share, resulting in a dividend payout ratio of 51%, which is an increase from 49% in 2023 [17] Market Position and Valuation - Tanger's low FFO multiple and consistent dividend growth enhance its value proposition for passive income investors [1][27] - The trust's experience in managing open-air shopping centers positions it well to capitalize on the current favorable market conditions [26]