Millennials in North America are facing a decidedly different economic outlook than their Boomer precursors enjoyed, with homeownership down and student debt up compared even with the previous generation.
If a recession occurs, whole sections of the current generational cohort will inherit a far harsher economic environment. Here’s why investment in a single stock could be the answer to a whole range of financial challenges.
Investing in REITs could be a better play than owning property
The next recession — and there are indications that it could be here sooner rather than later — could be especially hard to bear. Imagine a retiring generation of boomers unsupported by its children due to earnings losses incurred by a market downturn. Imagine the offspring of millennials taking on even more student debt than their parents shouldered. And now bear in mind that this is the situation even without a recession.
In short, investors in real estate assets listed on the TSX should be looking at buying only the very safest of REITs. While a case can certainly be made for the usual suspects (banks, utilities, certain forms of real estate, and consumer staples, not to mention gold), choosing the right stocks among the hundreds that are available can be something of a minefield. That’s why geographical diversity and a recognized, world-class asset management team is essential.
Canadian investors looking for good value for money when it comes to dividend stocks have an excellent choice in Brookfield Property Partners (TSX:BPY.UN)(NASDAQ:BPY). A quality REIT, Brookfield Property pays a dividend yield just shy of 7% and is attractively valued with a P/E and P/B of around market weight. It’s also of the same general volatility as the TSX index, making for a fairly low-risk investment.
A rich yield and world-class asset management make for a solid buy
With a multi-billion-dollar asset portfolio, Brookfield Property is a diversified REIT worthy of a long-range dividend portfolio. Spanning North America, Australia, and Europe, Brookfield Property offers a defensive spread of locations, with its focus on commercial properties, granting access to a huge portfolio of dependable real estate.
Owning and operating sites and business consulting make up Brookfield Property’s main areas of operations, with a considerable spread of properties on its books. This covers everything from office space to multifamily properties as well as self-storage and student accommodation.
In short, if you’re looking for exposure to real estate, but a mortgage doesn’t suit you, or if you’re simply looking to line a TFSA or retirement fund, this is a top stock with plenty to recommend it.
The bottom line
In short, this stock could make up for several shortfalls facing millennial investors today. Its dividend yield and the possibility of longer-term maturation replaces some of the lost capital that the current generation is suffering, while exposure to some of the best commercial real estate goes some way to replacing an actual brick-and-mortar investment.
Sure, a simple stock investment can’t make up for all of the economic challenges young people face today, but it’s a start.
