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Passive Income Investing: 3 REITs That Provide Huge Dividends

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Volatility picked up in North American markets in late February. This was largely due to rising bond yields that threw equities into turmoil. Fortunately, bond yields have corrected to kick off the month of March. Bonds have fallen out of favour over the past decade. Historically low interest rates have throttled yields for traditional fixed income vehicles. Investors on the hunt for passive income should instead look to equities that offer strong dividends. Today, I want to look at three real estate investment trusts (REITs) that can fulfill your passive income dreams.

This highly diversified REIT boasts big income

SmartCentres REIT (TSX:SRU.UN) principally generates revenue from property leasing operations. It consists of two groups of properties: retail and mixed-use. Shares of this REIT have climbed 3.6% in 2021 as of early afternoon trading on March 3.

The company released its fourth-quarter and full-year 2020 results on February 10. SmartCentres put together a strong quarter in the face of very challenging conditions for its industry. Fortunately, there appears to be an end in sight to the pandemic as vaccine production ramps up. Regardless, in Q4 2020 SmartCentres’ committed occupancy level remained at an industry leading level of 97.3%.

This REIT offers a monthly dividend of $0.154 per share. That represents a monster 7% yield. Investors on the hunt for passive-income should look hard at SmartCentres today.

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Soak up passive income through the robust grocery retail space

Slate Grocery REIT (TSX:SGR.UN) is an unincorporated, open-ended mutual fund trust focused on acquiring, owning, and leasing a portfolio of diversified revenue-producing commercial real estate in the United States. It emphasizes investment in grocery-anchored retail properties. Shares of this REIT have climbed 16% in 2021 so far.

This REIT released its final batch of 2020 results on February 24. Occupancy increased 0.4% quarter-over-quarter to 92.9%. This illustrated the resiliency of Slate Grocery’s essential tenancies in 2020. Net income rose 51.7% from the prior year to $21.2 million. In Q4 2020, the REIT stated that it was well-positioned from the liquidity perspective to weather any further headwinds from the COVID-19 pandemic.

Slate Grocery last possessed an attractive price-to-earnings ratio of 9.6. Better yet, this REIT offers a monthly dividend of $0.072. That represents a huge 9.2% yield. Passive-income investors should hunt out this top REIT today.

One more REIT to snatch up in early March

Are you finished building your passive income empire? If not, you should target the True North Commercial REIT (TSX:TNT.UN). True North will release its final batch of 2020 results when the market closes on March 3. Its shares have climbed 4.8% in 2021 at the time of this writing.

True North owns and acquires Canadian commercial real estate properties. In Q3 2020, the REIT announced 99% contractual rent collection. This was a very promising development as investors worried that the pandemic could greatly destabilize entities like True North. Fortunately, government assistance and a rebounding economy have come to the rescue.

This REIT has a favourable P/E ratio of 17. True North last paid a monthly distribution of $0.05 per share, which represents a beastly 9.1% yield. This is another equity that can power your passive-income empire going forward.

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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 Ambrose O'Callaghan has no position in any of the stocks mentioned. The Motley Fool recommends Smart REIT.

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