Higher interest rates and a tougher retail environment have punished the stock of real estate investment trusts the likes of Simon Property Group Inc.
Shares of the Indianapolis-based shopping-mall giant trade lately around $152 each, down from a high of more than $180 in the spring.
But the owner of more than 320 retail properties still landed on the Barron’s list of top stock picks for 2014, with the financial publication citing an improved outlook and an analyst upgrade.
“Despite the growth in online retailing, Americans still like shopping at malls; foot traffic was higher over the Thanksgiving weekend than it was a year earlier,” Barron’s wrote in Saturday's edition.
A key measure for REITs known as funds from operations was up about 11 percent for Simon in the third quarter and is expected to grow 8 percent in 2014.
Simon’s occupancy rate was up about 1 percent, to 95.5 percent, in the third quarter, which is near all-time highs. Profit was up 22 percent through the first nine months of this year.
Barron’s also pointed to Morgan Stanley’s recently boosted price target for Simon: to $186 a share from $180.
It also didn’t hurt that Simon recently boosted its dividend by 5 cents, to $1.20 per share.
In the third quarter, Simon opened three new premium outlet centers, including St. Louis Premium Outlets in Chesterfield, Mo., near Interstate 64.
It’s also been disposing of less-lucrative holdings. It recently sold Arsenal Mall and Office, near Boston, and Terrace at The Florida Mall, in Orlando, fetching $76 million.
Among other stocks Barron’s likes in 2014 are Citigroup, Deere & Co., General Motors, Intel Corp., MetLife, Nestle SA and US Airways Group.