Real estate investment trusts (REIT) have been looking really good lately. These companies offer dividends that are usually paid out on a monthly basis — something we could all use during this volatile market.
However, not all REITs offer the same stability or even a rebounding share price for when the market recovers. That’s why today, I’m going to look at two REITs that offer just that: stability. You can look forward to continuing dividend payments while also seeing share prices rise.
So, let’s dig right in.
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Allied Properties
Allied Properties REIT (TSX: AP.UN) is a solid investment for those seeing Canadians return to work and wanting in on the action. Allied REIT focuses on urban workspaces within major Canadian cities. However, it also started investing in data centres in Toronto. It’s created a strong presence by buying up warehouses and flipping them into strong workspaces, creating a solid return on investment.
The problem is that this method of reinvesting while strong, may see a decline thanks to inflation coupled with investor sentiment. However, long-term investors shouldn’t worry. Analysts remain bullish on the company’s performance, and the recent selloff provides an attractive point of entry.
In fact, as of writing, shares trade at just $39 per share, with a target price of around $50. That’s a potential upside of 28% as of writing. It currently also trades at nine times earnings and is still down 11% year to date.
Automotive Properties
Then there’s Automotive Properties REIT (TSX: APR.UN). Automotive continues to trade near fair value, though, near term, this company looks like it may suffer less-than-ideal performance. That comes as the company looks to lock in rates and extend its terms on credit facilities for the quarter. But long-term investors again should see now as an opportunity to jump on the stock.
Over the next decade, Automotive may see an increase in acquisitions, as Canadians look to invest in electric vehicles. Companies continue to make the switch to their fleet, and this provides an opportunity for an REIT devoted to the automotive industry.
Yet again, shares trade at just 6.27 times earnings and 1.16 times book value. With a share price of $13 and a target price of about $15, it doesn’t leave a huge amount of growth short term. That’s a potential upside of 15% as of writing. But long term, this could be a great choice for any portfolio.
Dig the dividends
What these companies both offer in the meantime are strong dividends based on these stable performances. You can pick up a yield of 4.49% from Allied, and 5.91% from Automotive REIT. So, if you had $20,000 to invest in both of these stocks today, you could bring in a total of $2,126 on an annual basis, or $177 per month!
What’s more, both of these stocks are due for major growth in the next few years. So, you could also be looking at huge returns, as they recover from this market volatility. That means you’ll be looking at stable income for life and amazing returns from shares by locking in these numbers today.
