The U.S. retail industry has been a battleground over the last couple of years as Amazon Inc. (NASDAQ:AMZN) has continued to wreak havoc on brick-and-mortar retailers. If you think the selling is overdone, like I do, then here are two great ways to play a rebound.
Tanger Factor Outlet Centers Inc.
Tanger Factor Outlet Centers Inc. (NYSE:SKT) is a publicly traded REIT that owns and operates upscale outlet shopping centers. Its portfolio currently consists of 44 outlet centers, and one under construction, which are located across 22 states and total about 15.1 million square feet of gross leasable area.
Tanger’s stock has been punished so far in 2017, falling over 29%, and it now sits more than 40% below its 52-week high of $42.20 reached back in August. I think the sell-off in Tanger is well overdone, especially since it has continued to report strong earnings results, including 54 consecutive quarters of consolidated portfolio same-center net operating income growth. The stock also offers a juicy 5.4% dividend yield, and it has raised its dividend for 24 consecutive years, making it an all-around strong buy in my opinion.
SPDR S&P Retail ETF
If you do not want to own an individual stock like Tanger, then you could always buy the SPDR S&P Retail ETF (NYSE:XRT), which seeks to track the performance of the industry as a whole. Its largest holdings include Sprouts Farmers Markets Inc. (NASDAQ:SFM), Five Below Inc. (NASDAQ:FIVE), Wayfair Inc. (NYSE:W), Best Buy Co. (NYSE:BBY), and Etsy Inc. (NASDAQ:ETSY).
The SPDR S&P Retail ETF has fallen over 7% so far in 2017, and it now sits over 15% below its 52-week high of $48.26 reached back in December. The ETF does not offer as much upside as an individual stock, but it does reduce your overall risk. It also currently pays an annual dividend rate of $0.5564 per share, which gives it a 1.4% yield today.
Disclosure: Baystreet.ca contributor Joseph Solitro owns shares of Tanger Factory Outlet Centers Inc.
