Your goal in 2020 could be something different: you could aim to build a multi-million-dollar nest egg next year. True North (TSX:TNT.UN), Slate (TSX:SRT.UN), and Inovalis (TSX:INO.UN) are outstanding real estate investment trusts (REITs) and dividend kings can help you amass a fortune.
Dividend king no. 1
True North is the owner and operator of 46 commercial properties with high-profile tenants. The properties of this $489.56 million REIT are located in urban and select strategic secondary markets across the country. The federal government of Canada is the most prominent tenant.
At the onset, True North has been strict in selecting tenants. The goal is to focus or accept government and credit-rated tenants who will sign up for long-term leases. The lengthy contracts will ensure stable rental payments and favourable leasing spreads.
So far, True North has the most active tenant profile among all REITs. The occupancy rate remains consistent at 96%. From an investment perspective, the 8.5% dividend is fantastic considering you can purchase the stock for less than $7 per share.
Even if True North is the only stock you can afford, your investment could be worth double in eight-and-a-half years. You can compound your earnings by reinvesting the dividends.
Dividend king no. 2
Should the inflation rate in Canada rise in 2020, Slate is the perfect hedge. The dividend of this REIT stock is 8.77%, which is four times more than the 2% inflation rate forecast next year.
Likewise, Slate is best suited in your TFSA, as all earnings from the ample dividends are tax-free and a real boost to your after-tax income. The beautiful thing about Slate is its concentration on grocery-anchored retail plazas. This popular REIT owns and operates commercial real estate properties in the U.S., mostly in medium-sized cities.
With consumer spending driving the American economy, the majority of Slate’s tenants are enjoying brisk business, notwithstanding the stiff competition with e-commerce stores. Consumers are comfortable buying the essentials and everyday needs at the grocery stores.
The occupancy rate of the total of 85 properties in the real estate portfolio of Slate is over 95%. This high rate is the reason why this REIT continues to generate stable cash flows.
Dividend king no. 3
Inovalis completes the triumvirate of the dividend kings. This $252.8 million REIT might be small, but it pays a 7.35% dividend. With this yield, a $16,500 investment would translate into $101 in monthly income.
By investing in Inovalis, you become an international landlord, as the rental properties are mostly office spaces in France, Germany, and other European countries. The advantage of Inovalis is the location of its properties. You can find the properties in the busiest prime areas in both Germany and France.
Another plus factor with this European-focused REIT is its growth potential. Growing and expanding its relatively small real estate portfolio is part of the master plan.
But don’t expect any stock price appreciation. If ever there is one, the increase is minimal, if not negligible. You’re investing in Inovalis because it’s a good dividend play with international exposure.
Multi-million-dollar nest egg
True North, Slate, and Inovalis are your dividend kings that can combine to build a multi-million-dollar nest egg. The average dividend of the three high-yield stocks is 8.2%. To achieve your goal, you would need to have an investment window of 25 years and an investment of $280,000. Your nest egg will be a cool $2,000,000.
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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 Christopher Liew has no position in any of the stocks mentioned. The Motley Fool recommends Inovalis REIT.