A great monthly dividend stock is something we could all use right now. Knowing you have income from a job is one thing. But creating passive income that will be there, even when you retire is quite another. And when the market is down, it becomes all but essential.
This is why today I’m focusing on a dividend stock that pays cash every single month. One that holds a 7.52% dividend yield as of writing. And further, one that trades far lower than necessary right now. So, let’s look at why this dividend stock might belong in your portfolio on the TSX today.
Allied Properties REIT
Allied Properties REIT (TSX:AP.UN) is a real estate investment trust (REIT) that mainly focuses on urban office environments in cities across Canada. Shares of the company are down almost 50% in the last year, as of writing, which is absolutely insane. I mean sure, there is some reason, but certainly not enough for this drop.
The reason for the fall in share price comes from being in the property market in general. Allied stock fell as property prices plummeted. It then continued to fall as interest rates and inflation rose. Not to mention that companies like this, which focus on offices, remain under pressure after the pandemic.
However, Allied stock has proven through earnings that there isn’t as much to fear as some believe.
Earnings show growth
Sure, inflation and interest rates have had their impact on Allied stock. The dividend stock did see lower net income this year, especially impacted by the drop in share price. However, when it comes to the business itself, earnings proved the company remains strong.
Allied stock saw funds from operations (FFO) rise 32% year over year for 2022, with investment property value up 1.5%. Total assets rose 14.7% in the last year as well, with annualized adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) up 10.4%. Rental revenue also increased by 10% for the year.
So, the issue for this dividend stock comes to the stock price itself. It remains in a strong financial position and continues to see rent come in steadily. The only negative was that occupancy fell by a slight 0.3%. Everything else negative came down to share price, which could be remedied by the end of the year.
Pick it up while it lasts!
With that in mind, analysts continue to recommend Allied stock as a dividend stock to buy or at least keep on your watch list. It trades at a fair 19.8 times earnings and offers a 7.52% dividend yield, and that comes out every month. For the year, you’ll receive $1.80 per share.
Let’s say that you purchased $5,000 in Allied stock and then saw the dividend stock return to 52-week highs. Let’s see where you could be in a year from now versus if you waited and purchased at those heights.
| COMPANY | RECENT PRICE | NUMBER OF SHARES | DIVIDEND (ANNUAL) | TOTAL PAYOUT (ANNUAL) | FREQUENCY | TOTAL INVESTMENT |
| AP.UN — Highs | $47.24 | 106 | $1.80 | $190.80 | Monthly | $5,000 |
| AP.UN — Now | $24.40 | 205 | $1.80 | $369 | Monthly | $5,000 |
| AP.UN — Growth | $47.24 | 205 | $1.80 | $369 | Monthly | $9,684.20 |
As you can see, buying before would have only brought in $191 per year. Buying now, you’ll receive almost double the amount! Furthermore, when shares return to those 52-week highs, you’ll have almost doubled your investment as well.
