3 REITs to Buy for a Steady Stream of Monthly Income

Want to supplement your income? If so, consider investing in Chartwell Retirement Residences (TSX:CSH.UN), Milestone Apartments Real Estate Invt Tr (TSX:MST.UN), or Interrent Real Estate Investment Trust (TSX:IIP.UN).

| More on:
The Motley Fool
You’re reading a free article with opinions that may differ from The Motley Fool’s premium investing services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn more

Investing in monthly dividend stocks is a great way to supplement your income, and real estate investment trusts (REITs) offer some of the best opportunities to do so. Let’s take a quick look at three with yields of 3-4% that you could add to your portfolio today.

1. Chartwell Retirement Residences

Chartwell Retirement Residences (TSX:CSH.UN) is the largest owner and operator of senior housing communities in Canada. It has full ownership of 132 communities with a total of 16,617 suites, it has partial ownership of 47 communities with a total of 8,322 suites, and it manages seven communities with a total of 1,117 suites in Ontario, Quebec, British Columbia, and Alberta.

It pays a monthly distribution of $0.046818 per share, or $0.561816 per share annually, which gives its stock a yield of about 3.8% at today’s levels.

It’s also very important to make the follow two notes about its distribution.

First, Chartwell’s 2% distribution hike in February has it on pace for 2016 to mark the second consecutive year in which it has raised its annual distribution.

Second, I think the company’s strong growth of adjusted funds from operations, including its 23.5% year-over-year increase to $0.21 per share in the first quarter of 2016, its low payout ratio, including 64.7% in the first quarter, and the growing demand for senior living and care services, will allow its streak of annual distribution increases to continue for many years to come.

2. Milestone Apartments Real Estate Investment Trust

Milestone Apartments Real Estate Invt Tr (TSX:MST.UN) is one of the largest residential landlords in the United States. It owns and operates 72 apartment communities comprised of 22,546 units located across 14 major metropolitan markets in the southeastern and southwestern United States.

It pays a monthly distribution of US$0.04583 per share, or US$0.55 per share annually, which gives its stock a yield of about 3.8% at today’s levels.

It’s also very important to make the follow two notes about its distribution.

First, Milestone’s 11% distribution hike in October 2015, which was effective for its January 2016 payment, has it on pace for 2016 to mark the first year in which it has raised its annual distribution since it became a public company in 2013.

Second, I think the company’s strong growth of adjusted funds from operations, including its 8.7% year-over-year increase to US$0.25 per share in the first quarter of 2016, its low payout ratio, including 64% in the first quarter, and its rapidly growing property portfolio, including its addition of 13 properties totaling 2,802 apartment units over the last year, will allow 2016 to mark the starting point to an extensive streak an annual distribution increases.

3. Interrent Real Estate Investment Trust

Interrent Real Estate Investment Trust (TSX:IIP.UN) is one of the largest residential landlords to mid-sized population markets in Ontario and Quebec with 8,362 suites available for lease.

It pays a monthly distribution of $0.01925 per share, or $0.231 per share annually, which gives its stock a yield of about 3% at today’s levels.

It’s also very important to make the follow two notes about its distribution.

First, Interrent’s 5% distribution hike in November 2015 has it on pace for 2016 to mark the fifth consecutive year in which it has raised its annual distribution.

Second, I think the company’s very strong growth of adjusted funds from operations, including its 21.1% year-over-year increase to $0.069 per share in the first quarter of 2016, its modest payout ratio, including 83.8% in the first quarter, and its rapidly growing property portfolio, including its addition of 1,377 residential suites over the last year, will allow its streak of annual distribution increases to continue going forward.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

Fool contributor Joseph Solitro has no position in any stocks mentioned. Milestone Apartments is a recommendation of Stock Advisor Canada.

More on Dividend Stocks

Payday ringed on a calendar
Dividend Stocks

How to Convert $500 Monthly Investment Into $200 Monthly Income

If you want the stock market to give you regular monthly income, you have to invest in the stock market…

Read more »

worry concern
Dividend Stocks

3 Ultra-Safe Dividend Stocks for Jittery Investors

Motley Fool investors nervous about the market downturn should consider these ultra-safe dividend stocks that keep paying passive income no…

Read more »

House Key And Keychain On Wooden Table
Dividend Stocks

Is the Real Estate Boom Finally at an End?

It might be hard to believe, but Canada’s decades-long housing boom might be at an end.

Read more »

Caution, careful
Dividend Stocks

3 Mistakes to Avoid When Investing in a Recession

Avoid making these crucial investing mistakes during market downturns to protect your investment portfolio.

Read more »

Various Canadian dollars in gray pants pocket
Dividend Stocks

2 Dividend ETFs for Easy Passive Income

Canadians can earn generous passive income the easy way from two dividend ETFs with monthly payouts.

Read more »

Payday ringed on a calendar
Dividend Stocks

TFSA Pension: How Retired Couples Can Get an Extra $815 Per Month in Tax-Free Passive Income

Retirees now have an opportunity to buy top dividend stocks at cheap prices to generate high-yield, tax-free passive income inside…

Read more »

exchange traded funds
Dividend Stocks

2 Dividend-Paying ETFs You Can Buy in 2022

These two dividend-paying ETFs in Canada allow them to earn a steady stream of passive income.

Read more »

Dividend Stocks

Attention Canada: It’s Time to Buy These REITs in Your TFSA

Rising interest rates created a correction in REIT prices. It’s time to buy some REITs in your TFSA and lock…

Read more »