Will Washington Prime Group Cut Its Dividend?
Washington Prime Group (NYSE: WPG) is a real estate investment trust (REIT) that owns and operates 108 shopping centers in the United States. On paper, Washington Prime is set to deliver an annual dividend of $1 per share, implying a nearly 30% yield on its stock price (high-yield REITs generally average 10%-14% performance). However, the eye-popping yield indicates that investors are skeptical the dividend will be maintained. The company has reaffirmed its dividend as recently as July 2019, but will it be able to make good on this promise?
It's no secret that consumer shopping behavior has changed in recent years. People are spending more time shopping online and less time in malls. As a result, many retailers have closed stores and quite a few have even gone bankrupt.
This is all bad news for Washington Prime, which operates malls across the U.S. The company has seen its occupancy rate at malls decline on the heels of several customer bankruptcies, including Charlotte Russe, Gymboree, and Payless ShoeSource.
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