Business & Investment

Three REITs that pay monthly dividends

Real estate stocks, especially REITs, tend to offer higher dividends. However, as shown in 2020, REITs tend to be more open to the idea of ​​reducing dividends compared to other companies when they are undergoing income-constrained stages. There is. Still, most REITs are an option worth considering if you want to start passive income with dividend stocks for two reasons.

One is a relatively generous yield and the other is a monthly distribution. If you organize your finances more efficiently, the last should not be a major factor to consider, but monthly distributions make things much easier.And if you is As you are about to start a passive income with a REIT, there are three things you should have on your radar.

Underrated REIT

Nexus REIT (TSX: NXR.UN) has been underestimated for some time. Currently, the price-to-book value ratio is 6.7 times and the price-to-book value ratio is 0.8 times. There are three different portfolios of commercial real estate assets: 41 industrial real estate, 13 office real estate and 22 commercial real estate. Nexus Its portfolio, And its asset base may not be as impressive as many other commercial REITs.

Nexus is an impressive stock for two reasons. One is a generous yield of 7.5% and the other is a very stable payment rate of 50.8%. Explains why many other REITs did not cut dividends in 2020 and why they may continue to reward investors. If market conditions in 2020 weren’t harsh enough to push that payout ratio into a dangerous territory, hopefully it’s just going down.

Overrated REIT

Chrome bee REIT (TSX: CRR.UN) is currently overrated compared to other REITs. Absent It has grown at a strong pace after the market crash (only about 20% in the last 12 months). REITs also do not offer stable payout rates, but they do have an impressive commercial real estate portfolio. It also offers historically high returns compared to some of its peers (average 8.4% over the last decade).

Its retail portfolio is primarily backed by grocery and pharmacy businesses, making it relatively safe in volatile market conditions. The other two sections of the portfolio are retail-related industrial real estate and office real estate. the company We are also considering housing development. It currently offers a juicy yield of 5.6% and has maintained payments for the past 7 years (and in some cases special dividends).

Grocery REIT

Slate Grocery REIT (TSX: SGR.U) is currently relatively undervalued. The price-earnings ratio is 7.8 times, and the price-earnings ratio is 0.8 times. It also offers an appetizing yield of 7.1% with a relatively stable payout rate of 98.37%, which itself is not stable, is Compared to REIT’s past payout ratios. We have raised our monthly payments four times over the last five years.

REITs are headquartered in Canada, but most of their assets are scattered throughout the United States. With stock prices rising more than 73% in the last 12 months, if investors bought it just before the market crash, they would have been fixed at a sweeter yield and would also benefit from decent capital gains.

Stupid takeaway

By investing $ 10,000 in each of the three REITs, you can start a passive income of about $ 168 a month. This is sufficient, especially if it comes from TFSA. In one year, the dividend may be enough to cover one-third of next year’s TFSA contribution ($ 2,000).

This article represents the opinion of a writer who may disagree with the “official” recommendation position of the Motley Fool Premium Services or Advisors. We are Motley! Asking investment treatises, even our own treatises, can help you think critically about your investment and make decisions to be smarter, happier, and richer. As a result, we may publish articles that may not match recommendations, rankings, or other content. ..

Stupid contributor Adam Ottoman There are no positions in any of the listed stocks.

Three REITs that pay monthly dividends Three REITs that pay monthly dividends

Back to top button