3 Valuable REIT Stocks Analysts Recommend on the TSX Today

These three real estate investment trusts are perfect buys for those seeking value and passive income. And with the TSX today trending down, who isn’t?

Amy Legate-Wolfe

Author Bio Amy became interested in investing in 2018 after having her first daughter. After receiving a masters degree in journalism from Western University, she became frustrated that the finance industry remained a confusing place for Canadians like her: new parents, millennials, and other young people who needed to understand their finances. Now, Amy focuses on tech companies and renewable energy for growth opportunities, coupling that with long-term investing strategies and equities. She also provides investors with a daily newsletter, Canada Stock Digest, for daily market updates. Her work can also be found at Canada's National Observer, where she writes on the business side of climate action. Before joining Motley Fool Canada, Amy wrote for major news organizations including HuffPost, CTVNews.ca, and CBC. When she’s not researching investing strategies, Amy’s time is pretty much monopolized by her two wild daughters, but in what little spare time she has she loves to do yoga, go on walks with her dog, and travel with her husband. Social Media Follow Amy on LinkedIn and Canada Stock Digest. Favorite Investment Quote “October: This is one of the particularly dangerous months to speculate in stocks. The others are July, January, September, April, November, May, March, June, December, August and February.” – Mark Twain

Published May 11, 2022 10:15 am EDT

Real estate investment trusts (REIT) can be some of the best stocks to have in a portfolio for Motley Fool investors. But not all are created equal. We learned during the pandemic that should a shutdown happen, companies can lose that longed for stable revenue.

That’s why with the TSX today trending downwards, we want to find REITs that are value stocks. These are large companies that have stable growth behind them and even more stable growth in the future. So, let’s dive in to three options for Motley Fool investors to consider.

Dream Industrial

The industrial sector continues to grow by leaps and bounds. REITs that offer space for assembly, storage and more are in high demand with supply chain up and e-commerce booming. And that’s why Dream Industrial REIT (TSX: DIR.UN) remains a strong option.

Dream REIT falls into the territory of value stocks trading at 3.56 times earnings and 0.86 times book value. It offers a potential upside of 36% identified by analyst at writing. Investors can pick up a 4.99% dividend yield and a deal with shares down 20% year to date.

RioCan REIT

RioCan REIT (TSX: REI.UN) just got off strong earnings, boasting a first-quarter profit of $0.52 per diluted share and $160.1 million profit. The company remained committed to a 97% occupancy rate, up from 95.8% the year before. And yet even with all this, the company remains one of the value stocks on the TSX today

RioCan currently trades at a valuable 11.37 times earnings and 0.90 times book value. Analysts give it a potential upside of 24% as of writing as well. Furthermore, you can pick it up for a dividend yield of 4.67% today. And with shares down 7% year to date, you also get another deal on the TSX today.

CT REIT

Finally, CT REIT (TSX: CRT.UN) is another of the strong value stocks to pick up among REITs. It has stable passive income and managed to grow significantly during the pandemic. Its e-commerce branch boomed, and that’s not going away just because restrictions are easing. In fact, while other companies had to close locations, CT remained strong. With lease agreements that on average last over a decade.

In fact, the company is doing so well it’s not completely in value territory at the moment. It trades at 19.15 times earnings, but at a valuable 2.52 times book value. Shares are just below analyst target prices, with a potential upside of about 10% as of writing. But that may be boosted after the company’s strong earnings recently reported.

Meanwhile, you can pick it up with a dividend yield of 4.85% and shares down 7% from year-to-date highs. In fact, this could be one of the value stocks that sees you through stable growth, while other stocks remain volatile on the TSX today.

Foolish takeaway

Not all REITs are alike, but these three offer strong growth and stable payouts now and in the future. Each is in a solid industry with long-term contracts that will see years of growth in the future. Plus, you get a sweet dividend while you wait. So, latch onto these value stocks if they fall into your investing strategy.