Cheap stocks are often cheap for a reason. One of the biggest mistakes novice investors make is choosing a laggard and ignoring a leader simply because the laggard has a lower P/E ratio or a higher dividend yield. A low P/E might be a signal that investors think future earnings will be a lot lower, while an outsized dividend yield could be too good to be true.
Simon Property Group's business is getting back on track, but it will really start to show what it can do next year.
When the economy grows, most companies generate the capital needed to expand their operations and some even have enough to pay dividends to shareholders. Growth and capital dry up, hindering some companies' ability to continue paying dividends. Strong companies prove their dividend staying power by paying out during both good times and bad.