TFSA Investors: 3 REITS That Pay Over 5% in Dividends

Granite Real Estate Investment Trust (TSX:GRT.UN)(NYSE:GRP.UN) and these two other REITs can provide you with some stable monthly dividend income with yields of over 5% per year.

office building

TFSA investors looking for dividend income can often look to REITs to generate some stable payouts. With the real estate industry strong and always finding ways to grow in Canada, it’s not hard to see why it might be a good investment option. I have a list of three REITs below that have yields of over 5% that could be great additions to your portfolio today.

Granite Real Estate Investment Trust (TSX:GRT.UN)(NYSE:GRP.UN) owns 92 properties spanning about 30 million square feet in North America and Europe. The company’s portfolio consists mainly of industrial properties and its largest tenant is Magna International Inc. and its subsidiaries.

The company currently pays a dividend of around 5.2%, which is paid out in monthly installments. Although it has only been traded since 2013, the company has increased its payouts about once a year. Since 2013, dividend payments of $0.175 have grown to $0.217 for a an increase of 24% and a compounded annual growth rate (CAGR) of 5.5%. With earnings per share (EPS) of $5.93 in the trailing 12 months, the company is also paying out just 44% of its net income and could easily continue to increase the dividend if it’s able to maintain or grow these profits.

Artis Real Estate Investment Trust (TSX:AX.UN) offers a more diversified portfolio with properties in industrial, retail, and office spaces. The company makes most of its income from its office locations, and Artis averages an occupancy rate of over 93% among all its properties. Geographically, more than half of the company’s income comes from Canada, with Alberta making up over a quarter of it, and the remainder coming from south of the border.

The company has not increased its dividend in many years, but with monthly payments yielding an annual return of 8.2%, that may not be a deal breaker. The bigger concern for investors likely revolves around whether or not Artis can afford to maintain that dividend. In the trailing 12 months, EPS for Artis has totaled just $0.95, meaning dividend payments of $1.08 a share are in excess of the company’s most recent earnings.

However, if we look at cash flow, the company has posted free cash of $233 million in the trailing 12 months, and dividend payments have used up just over 80% of that, suggesting the payout is still very manageable.

Choice Properties Real Est Invstmnt Trst (TSX:CHP.UN) has a portfolio of 537 properties totaling almost 44 million in square feet, with over 96% being office locations. The company’s locations are all in Canada, and Loblaw Companies Ltd (TSX:L) is both the largest shareholder and Choice’s main tenant. Although this REIT may be the least diversified of the three, with the strong backing and stability of a company like Loblaw behind it, it is in good position for future growth.

Currently, the stock pays a dividend of about 5.6% per year, which is also paid on a monthly basis. After posting losses in the last two years, the company’s EPS for the trailing 12 months has totaled $5.84, which makes its currently annual payout of $0.74 a share just a drop in the bucket. As Loblaw runs out of room to grow its grocery chains, I wouldn’t be surprised to see Choice Properties become the focus of its growth strategy 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 David Jagielski has no position in any stocks mentioned. Magna is a recommendation of Stock Advisor Canada.

More on Dividend Stocks

edit U-turn
Dividend Stocks

Down 11% From its 52-Week High, Can goeasy Stock Turn Things Around?

Investors looking for value should be drooling at goeasy (TSX:GSY) stock. With a higher dividend and more room to run,…

Read more »

calculate and analyze stock
Dividend Stocks

Sun Life Stock Is Paying $3.24 Per Share in Dividends: Time to Buy the Stock?

Sun Life (TSX:SLF) stock recently bumped its dividend upwards by 4%, creating even more value for investors today.

Read more »

A Canada Pension Plan Statement of Contributions with a 100 dollar banknote and dollar coins.
Dividend Stocks

Retirees: Here’s How to Boost Your CPP Pension

If you hold dividend stocks like Fortis Inc (TSX:FTS) in a TFSA, you'll take home more income than if you'd…

Read more »

A worker gives a business presentation.
Dividend Stocks

3 Safe Dividend Stocks to Own for the Next 10 Years

Given their consistent performances, healthy growth prospects and solid cash flows, these three dividend stocks are excellent buys for the…

Read more »

A bull outlined against a field
Dividend Stocks

The Bullish Market Left These 3 Stocks Behind, But They’re Buys Right Now

The bullish market left Air Canada (TSX:AC) stock behind.

Read more »

grow money, wealth build
Dividend Stocks

2 Ultra-High-Yield Stocks to Buy Hand Over Fist and 1 to Avoid

I have identified two ultra-high-yield stocks that have fallen to their lows despite strong fundamentals because of sector weakness.

Read more »

Various Canadian dollars in gray pants pocket
Dividend Stocks

3 Stocks Under $50 New Investors Can Confidently Buy

Investors looking for strong stocks can be a bit overwhelmed with options. Which is why today we're looking at these…

Read more »

Golden crown on a red velvet background
Dividend Stocks

Cash Kings: 3 TSX Stocks That Pay Monthly

These monthly dividend stocks offer steady and predictable income and high yields, making them attractive to investors seeking regular cash…

Read more »