Tanger Inc. (NYSE: SKT)

Sector: Real Estate Industry: REIT - Retail CIK: 0000899715
Market Cap 3.74 Bn
P/B 10.18
P/E 109.09
P/S 13.52
ROIC (Qtr) 6.97
Div Yield % 3.07
Rev 1y % (Qtr) 9.18
Total Debt (Qtr) 1.70 Bn
Debt/Equity (Qtr) 2.42
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About

Tanger Inc., commonly known as SKT, is a prominent real estate investment trust (REIT) specializing in the ownership, development, and management of outlet and open-air shopping centers across the United States and Canada. The company's portfolio boasts 31 outlet centers and one open-air lifestyle center, encompassing approximately 12.7 million square feet of gross leasable area. This extensive real estate portfolio is occupied by over 2,400 stores, which collectively represent around 660 store brands, including popular retailers such as Nike, Gap,...

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Investment thesis

Bull case

  • Operating cash flow of 289.38M provides exceptional 64.51x coverage of minority interest expenses 4.49M, showing strong core operations.
  • Operating cash flow of 289.38M provides strong 23.19x coverage of stock compensation 12.48M, indicating sustainable incentive practices.
  • Strong operating cash flow of 289.38M provides 3.71x coverage of SG&A expenses 78.10M, showing efficient operational cost management.
  • Cash position of 50.23M provides exceptional 11.20x coverage of minority interest expenses 4.49M, indicating strong liquidity.
  • Cash reserves of 50.23M provide ample 10.42x coverage of acquisition spending 4.82M, enabling strategic growth opportunities.

Bear case

  • Operating cash flow of 289.38M barely covers its investment activities of (332.26M), with a coverage ratio of -0.87, indicating heavy reliance on external financing for growth which may not be sustainable in a tighter credit environment.
  • Operating cash flow of 289.38M provides thin coverage of dividend payments of (128.97M) with a -2.24 ratio, suggesting potential dividend sustainability issues if operational performance deteriorates.
  • Free cash flow of (50.78M) provides weak coverage of capital expenditures of 340.16M, with a -0.15 ratio suggesting additional external financing needs for growth initiatives.
  • Operating earnings of 171.50M show weak coverage of depreciation charges of 146.14M, with a 1.17 ratio indicating high capital intensity and potential reinvestment needs.
  • High depreciation of 146.14M relative to operating cash flow of 289.38M, which is 0.50x suggests significant maintenance capital requirements affecting free cash flow.

Peer comparison

Companies in the REIT - Retail
S.No. Ticker Company Market Cap P/E P/S Total Debt (Qtr)
1 SPG Simon Property Group Inc. 62.65 Bn 27.30 11.19 26.32 Bn
2 O Realty Income Corp 15.99 Bn 61.56 15.32 28.37 Bn
3 KIM Kimco Realty Corp 14.22 Bn 20.86 8.63 8.35 Bn
4 REG Regency Centers Corp 14.06 Bn 27.37 9.05 4.98 Bn
5 PECO Phillips Edison & Company, Inc. 11.82 Bn 3,838.00 46.61 2.38 Bn
6 FRT Federal Realty Investment Trust 8.00 Bn 23.50 8.55 5.03 Bn
7 EPRT Essential Properties Realty Trust, Inc. 6.41 Bn 25.34 11.42 2.51 Bn
8 ADC Agree Realty Corp 5.53 Bn 44.48 15.36 3.29 Bn

Industry comparisons

Current Valuation Value Ind Avg Percentile
EV to Assets EV to Assets 1.65 1.13
EV to Cash from Ops. EV/CFO 36.65 22.52
EV to Debt EV to Debt 2.55 2.49
EV to EBIT EV/EBIT 63.52 42.49
EV to EBITDA EV/EBITDA 27.53 19.89
EV to Free Cash Flow [EV/FCF] EV/FCF 105.89 27.13
EV to Market Cap EV to Market Cap 1.16 461,431.31
EV to Revenue EV/Rev 15.72 13.31
Price to Book Value [P/B] P/B 10.18 3.17
Price to Earnings [P/E] P/E 109.09 177.24
Dividend Metrics Value Ind Avg Percentile
Dividend Coverage Ratio Div Coverage (Qtr) 0.84 0.69
Dividend Payout Ratio % Div Payout % (Qtr) 119.60 169.12
Dividend per Basic Share Div per Share (Qtr) 1.15 2.32
FCF Dividend Payout Ratio % FCF Div Payout % (Qtr) -257.02 -68.66
Interest Coverage Int. cover (Qtr) 2.69 2.52
Growth Metrics Value Ind Avg Percentile
Capex Growth (1y) % Capex 1y % (Qtr) 17.37 -12.09
Cash and Equivalents Growth (1y) % Cash & Equiv 1y % (Qtr) 354.43 68.41
Dividend Growth (1y) % Div 1y % (Qtr) 6.36 13.80
EBIAT Growth (1y) % EBIAT 1y % (Qtr) 11.82 224.52
EBITDA Growth (1y) % EBITDA 1y % (Qtr) 10.21 0.11
EBIT Growth (1y) % EBIT 1y % (Qtr) 11.82 222.92
EBT Growth (1y) % EBT 1y % (Qtr) 12.42 290.94
EPS Growth (1y) % EPS 1y % (Qtr) 6.74 273.30
FCF Growth (1y) % FCF 1y % (Qtr) 69.25 -81.48
Gross Profit Growth (1y) % Gross Profit 1y % (Qtr) 9.20 6.10
Liquidity Ratios Value Ind Avg Percentile
Asset Utilization Ratio Asset Util Ratio (Qtr) 0.21 0.12
Cash Payout Ratio Cash Payout (Qtr) 0.20 0.14
Cash Ratio Cash Ratio 0.00 0.00
Current Ratio Current Ratio 0.00 0.00
Debt to Equity Ratio Debt/Equity (Qtr) 2.42 -2.59
Interest Cover Ratio Int Coverage (Qtr) 2.69 2.52
Times Interest Earned Times Interest Earned (Qtr) 2.69 2.52
Profitability Value Ind Avg Percentile
EBITDA Margin % EBITDA Margin % (Qtr) 56.50 78.58
EBIT Margin % EBIT Margin % (Qtr) 30.52 45.34
EBT Margin % EBT Margin % (Qtr) 19.18 25.50
Gross Margin % Gross Margin % (Qtr) 69.50 73.99
Net Profit Margin % Net Margin % (Qtr) 19.20 23.85