Retirees: 2 High-Yield Stocks to Boost Your Monthly Income

Here’s why RioCan Real Estate Investment Trust (TSX:REI.UN) and Keg Royalties Income Fund (TSX:KEG.UN) are top picks for income investors.

| More on:
The Motley Fool

Income investors are always searching for new stocks that offer reliable and above-average yields.

Here are the reasons why I think RioCan Real Estate Investment Trust (TSX:REI.UN) and Keg Royalties Income Fund (TSX:KEG.UN) deserve to be on your radar.

RioCan

RioCan owns more than 300 shopping malls in Canada and just sold of its 49 properties in the United States.

The REIT sector came under pressure last year as concerns mounted that rising interest rates would put the squeeze on earnings. REITs tend to carry significant debt, so higher rates are generally a negative for the industry.

In Canada, rates are not expected to rise anytime soon, and the U.S. is probably going to take a slow and measured approach.

As such, RioCan shouldn’t be overly affected.

The company’s properties remain in high demand. RioCan renewed one million square feet of space in Q1 2016 at an average rent increase of 6.2%. Funds from operations for the quarter jumped 7% compared with the same period last year.

Some pundits are concerned the Internet will eventually replace brick and mortar stores. Businesses in certain segments of the market will definitely feel the pinch, but RioCan’s anchor tenants operate in sectors where the Internet isn’t likely to have a significant negative impact.

Grocery stores, pharmacies, and discount retailers are among the company’s top tenants, and Canadians still prefer to go to the store to buy these types of items.

RioCan is using the proceeds from the sale of the U.S. properties to reduce debt and invest in new opportunities.

One growth project is the addition of condos to some of the company’s top urban locations. If the concept takes off, RioCan could see a nice boost in revenue in the coming years.

RioCan pays a monthly distribution of 11.75 cents per unit for a yield of 5%.

The Keg

The Keg opened its first restaurant 45 years ago, and Canadians have flocked to the company’s upscale locations ever since.

Investors have to tread carefully when investing in restaurant names. Fads come and go, and the sector is littered with the corpses of one-time favourites that couldn’t build a loyal customer base.

The Keg has remained popular because it continues to deliver on its core strengths: its great food served by friendly staff in a fun atmosphere.

Today, 100 restaurants contribute to the royalty pool, and the chain continues to deliver steady results as well as consistent distribution growth.

The company raised the payout three times in 2015 and just increased it again. The current monthly payment of $0.09 per unit provides a yield of 6%.

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 Andrew Walker has no position in any stocks mentioned.

More on Dividend Stocks

young woman celebrating a victory while working with mobile phone in the office
Dividend Stocks

3 CRA Benefits Most Canadians Can Grab in 2024

You can save on taxes by claiming the dividend tax credit on Fortis Inc (TSX:FTS) shares.

Read more »

Two seniors float in a pool.
Dividend Stocks

TFSA: How to Earn $1,890 in Annual Tax-Free Income

Plunk these investments into your TFSA to earn passive income and avoid the taxman.

Read more »

Engineers walk through a facility.
Dividend Stocks

1 TSX Stock I Wouldn’t Touch With a 10-Foot Pole

AtkinsRéalis (TSX:ATRL) is one TSX stock I'd never invest in.

Read more »

edit Woman in skates works on laptop
Dividend Stocks

3 No-Brainer Stocks to Buy Under $30

These three stocks all offer a huge deal for investors looking for dividends, as well as growth that will last.

Read more »

You Should Know This
Dividend Stocks

How to Convert a $300 Monthly Investment Into $338 in Monthly Income

If you want a certain amount in monthly passive income, invest a similar amount today and leave the rest to…

Read more »

Increasing yield
Dividend Stocks

3 Income Stocks With Big Yields to Consider in April 2024

If you haven’t yet made your March investments, here are three income stocks to buy the dip and lock in…

Read more »

Senior Man Sitting On Sofa At Home With Pet Labrador Dog
Dividend Stocks

RRSP Investors: Don’t Miss Out on This Contribution Hack!

This hack has so many benefits for you -- not just when you put it in your RRSP but for…

Read more »

A red umbrella stands higher than a crowd of black umbrellas.
Dividend Stocks

Passive Income: 2 Safe Dividend Stocks to Own for the Next 10 Years

Dividend stocks such as Manulife and Fortis can help you generate a stable and recurring passive-income stream.

Read more »