Real estate is an excellent industry to gain exposure to, both by buying high-quality REITs but also through other top-notch businesses that serve the sector. Real estate is one of the oldest industries, and it’s also one of the most defensive. And with the pressure that real estate stocks have come under recently, they are some of the best Canadian stocks to buy now.
The key is to ensure that companies you buy have the ability to weather the storm over the short term should we get more economic turmoil ahead.
With that in mind, if you’re looking for investment ideas, here are two high-quality Canadian stocks to buy that offer unique exposure to real estate.
One of the best Canadian stocks to buy of all time
If you’re looking for high-quality Canadian stocks to buy and hold long term, one of the first stocks to consider is Brookfield Asset Management (TSX:BAM.A)(NYSE:BAM). Brookfield is a massive company with investments in several different industries, one of which is real estate.
Brookfield has a massive real estate portfolio. In fact, it’s one of the world’s largest investors in real estate. Plus, it doesn’t just own properties. It also develops and manages real estate properties. In total, its real estate assets under management are a whopping $256 billion, with more than 500 million square feet of commercial space in its properties.
Real estate, of course, isn’t its only business. However, it’s a large portion of Brookfield’s operations, accounting for over 15% of its revenue in 2021. So, buying the stock can give you excellent exposure to its high-quality properties located all over the world.
If you’re looking for high-quality Canadian stocks to buy, especially after the recent pullback in the market, Brookfield Asset Management is easily one of the best.
A high-quality stock to buy for dividend investors
In addition to Brookfield, another high-quality Canadian stock to buy that offers investors unique exposure to real estate is Diversified Royalty (TSX:DIV).
Diversified Royalty is one of the best Canadian stocks to buy for dividend investors, because it pays a safe and attractive dividend. That’s not all. The dividend currently has a yield of roughly 7.9%, which is paid to investors on a monthly basis.
Diversified Royalty, as its name suggests, is a corporation that receives royalties from several different partners, giving it highly diversified revenue. The company’s main goal is to find reliable and predictable companies that are constantly growing their cash flow.
In addition, it aims to ensure its royalty income stays diversified by investing in several different industries. Today, its partners include Mr. Lube, Air Miles, a restaurant chain, a home nursing business, and an after-school tutoring company.
However, the stock also receives a royalty from Sutton Group, a leading provider of services to residential realtors. Sutton earns income from the franchise fees that it charges to its national network of real estate agents in Canada that operate under its brand.
It’s not the majority of Diversified Royalty’s business. However, the stock does offer significant exposure to the industry. For example, in the first quarter, just under 10% of Diversified Royalty’s revenue came from Sutton’s royalty payments.
Therefore, if you’re looking for high-quality Canadian stocks to buy now, Diversified Royalty is a unique company that offers exposure to many different industries, including real estate. Plus, in the current market environment, its nearly 8% dividend yield is incredibly appealing.