Taubman Centers Increases Dividend - Analyst Blog

Taubman Centers Inc. (TCO), a real estate investment trust (REIT), has recently increased its dividend payout by 5.4% to a quarterly payment of $0.4375 per share or $1.75 on an annualized basis. The company also declared a special dividend of $0.1834 per share payable on December 31, 2010 to shareholders of record as on December 17, 2010.

Since its initial public offering in 1992, Taubman Centers has never reduced its common dividend, while increasing the same on 13 occasions. The company has one of the strongest balance sheets in the sector with adequate liquidity. The debt-to-market capitalization stood at 43.0% by the end of third quarter 2010, with $17.3 million of cash and cash equivalents. Taubman Centers has also taken prudent steps to reduce operating expenses by pruning its pre-development spending in the U.S. and Asia, as well as significantly reducing its overall workforce. This, in turn, has improved the bottom line of the company.

Taubman Centers owns, develops, acquires and operates regional and super-regional shopping centers throughout the U.S. and Asia. Retail shopping centers spanning over 400,000 square feet of gross leaseable area (GLA) are generally referred to as regional shopping centers, while those with GLA in excess of 800,000 square feet are called super-regional shopping centers. A large number of these shopping centers are strategically located in major metropolitan areas, including Los Angeles, San Francisco, Denver, Detroit, Phoenix, Miami, Dallas, Tampa, Orlando and Washington DC.

Taubman Centers has a strong portfolio of the best-in-class retail malls that generate the highest average sales per square foot in the country. Consequently, the company is relatively better placed than most of its peers to withstand the challenges of the macroeconomic environment. We maintain our ‘Neutral' recommendation on Taubman Centers, which presently has a Zacks #3 Rank that translates into a short-term ‘Hold' rating. We also have a ‘Neutral' recommendation and a Zacks #3 Rank for Equity One Inc. (EQY), a peer of Taubman Centers.

 
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