If you’re one of the many Canadians who opened a Tax-Free Savings Account (TFSA) a decade ago this year, I don’t have to tell you how great the program is. But for those of you who are still humming and hawing about whether to keep your cash in your savings or start up this account, let me convince you with one phrase:
This isn’t a joke, and it’s not like one of those game shows where you win $10,000 and walk away with $5,000 after taxes. No, if you invest in a reliable stock with a strong, stable monthly dividend, that dividend will give you money no matter what happens to your shares. They go up, they go down, and there remains that reliable dividend coming into your account month after month. The best part, because it’s in your TFSA, you won’t have to worry about the government taking even one dime back from what you’ve made.
Those dividend funds don’t have to be small either. If you choose the right stock, you can receive as much as $275 every month to pay groceries, bills, or put away from that dream vacation. And to get there, the simplest and most reliable way it to choose a real estate investment trust (REIT) with a dividend yield higher than 5.5%.
The ideal candidate I’ve found is also one that has a strong chance to skyrocket in share price over the next decade. WPT Industrial Real Estate Investment Trust (TSX:WIR.U) focuses on a sub-industry that is about to see a lot of growth in the coming years. This comes from the substantial increase in e-commerce and online shopping, where businesses will need a place for logistics and distribution centres. In fact, retail industry analysts expect e-commerce sales to increase by US$1.2 trillion between the end of 2018 and into 2020. That’s an enormous opportunity for a REIT like WPT.
WPT is a young stock, which means it’s in an ideal place for investors to get in before both the industrial properties industry and the stock itself seriously take off. Meanwhile, WPT is growing on a large scale, already owning 70 light industrial properties across the United States, with an incredibly impressive occupancy rate of 99.1%.
On top of that, as the company completes acquisitions, those new properties will add to WPT’s strong bottom line. In its latest quarter, the company reported an increase of 3.4% year over year in net operating income.
While the stock is fairly valued at the moment, analysts predict the stock will be on the rise in the next few years, reaching about $15 per share in the next 12 months. That makes this stock a rare opportunity for investors looking for growth in a new industry, which is hard to find among REITs.
Then, of course, there’s that dividend of 5.58% at the time of writing, which is paid out monthly at $0.063 per share. To take advantage of this stock and receive $275 per month, that would mean investors would need to invest $60,150 at the time of writing.
WPT has it all when it comes to a reliable dividend stock. It’s in an area of rapid expansion, it’s in a period of growth, and it has a dividend yield that will likely only increase as the company continues to perform well. As e-commerce providers seek more and more space, WPT will be among the few that can offer it up to the growing industry.
For the investor that’s looking for a strong source of income and wants their stock to consistently over perform, WPT is the ideal candidate for your TFSA.
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 Amy Legate-Wolfe has no position in any of the stocks mentioned.