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Buy This Undervalued Stock Before Everyone Else Does


There's bad, and then there's really bad. Simon Property Group (NYSE: SPG) started 2020 out with a bad problem, and then the pandemic made it really bad. But this mall landlord has a history of using bad times to its advantage. If its efforts to do that this time around work out, it could be pretty attractive for long-term investors, even though its stock has more than doubled over the past year.

The 2007-to-2009 recession was one of the deepest in the history of the United States -- in fact, it was dubbed the Great Recession. Mall landlord Simon Property Group ended up cutting its dividend from $0.90 per share per quarter to $0.60. For three quarters, that was made up of a mixture of stock and cash as the real estate investment trust (REIT) looked to preserve funds.

REITs are specifically designed to pass income on to shareholders, so the dividend cut was a bad sign. However, the company didn't simply hunker down and hope for the best. It continued to build the new properties it already had in process, and in 2009 it agreed to buy Prime Outlets. In other words, it used the downturn to get better. That eventually translated to improved performance, and helped the dividend grow from $0.60 per share per quarter to $2.10 in early 2019. 

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Source Fool.com

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