Yield Alert: This Monster 8.32%-Yielding REIT Is a No-Brainer Buy

REIT stocks give you the opportunity to supercharge your investment, and shares like BTB REIT exemplify that through its remarkable dividend yield.

| More on:
Red siren flashing

Image source: Getty Images.

You’re reading a free article with opinions that may differ from The Motley Fool’s premium investing services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn more

I would not be wrong to say that an income investor’s best friends are the highest dividend-paying stocks that offer reliable payouts. When it comes to stocks that give regular payouts to shareholders with a high yield, few sectors compare to Canada’s real estate industry.

Real estate investment trust (REIT) stocks constitute a substantial portion of portfolios for income investors. The asset class happens to be the highest dividend payer on the Toronto Stock Exchange. The stock’s price itself does not matter as much as the sustainability of dividend yield when it comes to income investing.

In this yield alert, I am going to discuss BTB Real Estate Investment Trust (TSX:BTB.UN). The REIT is a straightforward buy for income investors looking to capitalize on a healthy dividend yield of a reliable company in the long run. Let us take a better look at BTB, so you can determine whether or not the stock is a good buy for your investment portfolio.

Focused approach

BTB is not one of the largest companies you will see in Canada’s real estate sector. It has a modest market capitalization of just $313.59 million — much less than most of its peers. That being said, BTB has plenty going for it. The company is paying its shareholders dividends at a phenomenal yield of 8.32% at the time of this writing.

Usually, such a high dividend yield is an alarming sign for investors. Paying out such a significant percentage in dividends per share is typically unsustainable, and you would be right to worry about it. BTB, however, is a REIT with a focused approach that allows the company to sustain the high dividend yield.

The company owns 5.7 million square feet of leasable area in total. The company’s diverse portfolio consists of a total of 66 commercial, office, and industrial properties. The REIT’s primary focus on the province of Quebec allows it to generate a stable and growing cash distribution, keeping everything tax efficient.

At a price of just $5.05 per share, the stock is a lot cheaper than its peers. The REIT has an accretive acquisition program that allows it to thrive. The company continues to expand its assets, increasing the potential income for years to come.

The company’s clients are from income-producing, retail, mid-market office, and industrial property segments. There is little risk for the company compared to the remarkable rewards it stands to gain. For shareholders, it means they can rely on a stable flow of cash from the company through dividends.

Foolish takeaway

BTB has been paying dividends to investors since 2006. The real icing on the cake, aside from the high dividend yield, is the fact that it pays shareholders monthly. I think it is a very attractive option for income investors looking to boost their monthly income or to accumulate wealth over a long period.

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 Adam Othman has no position in any of the stocks mentioned.

More on Dividend Stocks

money cash dividends
Dividend Stocks

TFSA Passive Income: 2 Top TSX Dividend Stocks to Buy on the Correction

These top dividend stocks look cheap to buy right now for a TFSA focused on passive income.

Read more »

Target. Stand out from the crowd
Dividend Stocks

2 Oversold TSX Stocks to Buy in July

Invests can now find good value right now in top TSX dividend stocks.

Read more »

You Should Know This
Dividend Stocks

OSFI: Mortgage Arrears Only 0.15% Despite Rate Hikes

The OSFI is happy with the low mortgage delinquency but remains worried over the impact of rising rates on Canadian…

Read more »

Female hand holding piggy bank. Save money and financial investment
Dividend Stocks

2 Great TSX Stocks to Start a TFSA Retirement Fund During a Market Correction

These top TSX dividend stocks look cheap right now to buy for a TFSA retirement portfolio focused on passive income…

Read more »

consider the options
Dividend Stocks

Recession Worries? Try Buying These 2 Stocks

Consider investing in these two safe dividend stocks if you are worried about your investment returns due to fears of…

Read more »

A close up image of Canadian $20 Dollar bills
Dividend Stocks

TFSA Investors: Should You Be Holding Cash Now?

Holding cash might not be the best option for TFSA investors in 2022, but using surplus cash to purchase dividend…

Read more »

stock market
Dividend Stocks

4 Dividend Stocks With Yields of at Least 5% in a Bearish Market

By investing in these stocks, investors can earn reliable dividend yield of 5% or more.

Read more »

Path to retirement
Dividend Stocks

Retirement Investors: 2 Top Defensive TSX Stocks to Own During a Recession

These top defensive TSX dividend stocks look good to buy for a retirement fund during an economic downturn.

Read more »