The stock market has remained highly volatile in the last couple of years, as inflationary pressures, growing geopolitical tensions, and other macroeconomic issues have kept investors on edge. These are some of the key reasons why the TSX Composite has shed 5.6% of its value in the last 12 months.
While macroeconomic challenges might be over yet, better-than-expected domestic economic growth in the first quarter and the Bank of Canada’s recent decision to hold key interest rates steady have made TSX stocks look attractive again, with a strong possibility of a recovery in the coming months. That’s why it could be the right time to add some quality dividend stocks to your portfolio when they still look undervalued.
In this article, I’ll highlight one such beaten-down Canadian dividend stock you can buy on the dip right now to generate monthly passive income. Interestingly, this stock currently trades under $8 per share and offers a high dividend yield.
One Canadian dividend stock to buy for monthly passive income
When investing for the long term, you should ensure that the stock you pick has a strong fundamental outlook and a robust balance sheet to support future growth. With that in mind, Artis REIT (TSX:AX.UN) could be worth considering, especially after steep declines in its share prices in the last year. It’s a Winnipeg-headquartered closed-end REIT (real estate investment trust) with a market cap of $851.7 million, and it trades at $7.45 per share.
Since the end of 2021, this TSX-listed dividend stock has seen 37% value erosion, as investors became cautious about the real estate sector due to the dimming economic outlook. These recent declines in its share prices, however, have made its monthly cash distributions look even more attractive. At the time of writing, Artis REIT offers an attractive annualized dividend yield of around 8.1% and distributes its dividend payouts on a monthly basis.
Top reasons to buy this stock in 2023
Artis REIT had a strong portfolio of 134 properties with a primary focus on industrial, office, and retail at the end of 2022. Its properties had a gross book value of $4.6 billion, an occupancy rate of 92.3%, and a gross leasable area of 15.5 million square feet. Besides the government, large corporations like Bell Canada, AT&T, Bell MTS, and Prime Therapeutics were some of its major tenants. Moreover, its top 10 tenants made up only about 20% of its total gross revenue in the last quarter, reflecting Artis’s continued focus on tenant base diversification.
Last year, the REIT completed the construction of its “Park 8Ninety V” industrial project with a leasable area of 675,000 square feet in Texas. Also, Artis is actively engaged in the development of multiple residential and industrial projects in Canada and the United States. These efforts should help the Canadian REIT to accelerate its financial growth trends in the coming years and its share price to soar.
Bottom line
Despite all these positive factors and its improving fundamental outlook, Artis REIT stock has underperformed the broader market by a wide margin in the last year, making it look undervalued. Given that, long-term investors can consider buying this amazing monthly dividend stock on the dip.
