As far as dividend-producing investments go, real estate investment trusts (REITs) have to be right up there with the best assets long-term investors can hold. These real estate stocks are structured as trusts to provide income directly back to investors.
As part of a well-diversified portfolio, holding some exposure to real estate is certainly a good idea. This asset class is one that’s been proven to improve risk-adjusted returns over time.
Here are three of the top real estate stocks I’ve got my eye on right now.
Top real estate stocks: Dream Industrial REIT
When it comes to real estate plays with industrial exposure, Dream Industrial REIT (TSX: DIR.UN) is certainly an option worth considering. Indeed, this Toronto-based company’s portfolio of real estate properties located across Europe and North America is quite enticing for investors.
Industrial real estate is the backbone of the logistics space. For those expecting to see a sharp rise in e-commerce volumes, Dream Industrial could be viewed as a sneaky way to play this trend. This is a key reason why I like this trust.
Currently, Dream Industrial offers a dividend yield of 4.2%, which is underpinned by its impressive cash flow position and favourable vacancy rates.
Killam Apartment REIT
For investors seeking residential-focused real estate plays, there are few better options than Killam Apartment REIT (TSX: KMP.UN). In recent years, the management team of the REIT has been efficient in creating value for shareholders.
Accordingly, this stock has been on my radar for quite some time.
The company’s portfolio comprises apartments and condominiums of high quality, which is noteworthy for individuals. Most of these are located in Atlantic Canada. In my view, the growth potential in this geographic region is both overlooked and underappreciated. Accordingly, I think this is a REIT worth considering.
Killam is transitioning to a mixed-use model and is including more retail space in its business model. Given that the economy appears to (finally) be approaching normalcy, there appears to be a tonne of upside on the horizon for Killam.
SmartCentres REIT
Another top real estate play on my watchlist right now is SmartCentres REIT (TSX: SRU.UN). Considering this REIT’s portfolio of world-class retail properties, this is one of the top options in the retail space. Furthermore, investors might like to note that a major portion of its client base includes blue-chip companies. Indeed, this company’s portfolio of tenants is quite impressive as well. Over 25% of the REIT’s rental income comes from Walmart, which anchors 115 of Killam’s total number of properties.
Accordingly, SmartCentres REIT boasts an extremely stable cash flow position. This enables the trust to offer a dividend yield around 6% at the time of writing. That said, I believe there’s room for dividend hikes in the near future. Accordingly, this stock is an excellent option for investors in or approaching retirement.
With the values of retail real estate increasing along with rental rates, there’s room for optimism with regard to SmartCentres. Accordingly, this is an excellent stock, in my view.
