Real estate investing can be a good place to consider for income and long-term price appreciation. The Canadian real estate investment trusts (REITs), which tend to pay out monthly cash distributions, are a good place to look for passive-income seekers. Here are a few of the top Canadian REITs that pay monthly cash distributions and you can consider buying on any weakness this month.
CT Real Estate Investment Trust (TSX:CRT.UN) is a decently resilient REIT given that it has moved essentially sideways (with ups and downs) since mid-2021 in a rising interest rate environment. The retail REIT owns more than 370 properties, with Canadian Tire being its largest tenant. It also enjoys an investment-grade S&P credit rating of BBB. Without a doubt, though, it is a higher-risk investment but offers higher income than Guaranteed Investment Certificates (GICs). For reference, the one-year GIC yields about 5% in interest income.
The REIT has increased its cash distribution for 10 consecutive years. Few Canadian REITs can make that claim. In fact, CT REIT is increasing its monthly cash distribution by 3.5% this month, which would be payable in July. The new cash distribution equates to an annualized payout of $0.8982 per unit. At $15.16 per unit, it offers a decent forward yield of 5.9%. Analysts also believes it trades at a discount of about 13%.
CT REIT reported stable first-quarter results, for which, year over year, its net operating income (NOI) rose 4.5% and funds from operations (FFO) per unit climbed 4.2% to $0.32. Consequently, its FFO payout ratio was sustainable at approximately 68%.
Choice Properties REIT
Choice Properties REIT (TSX:CHP.UN) is another retail REIT that has been fairly resilient with a stable tenant base and solid balance sheet. The stock is trading at similar levels as in late 2021. Like CT REIT, it enjoys an investment-grade S&P credit rating of BBB.
In the first quarter, the retail REIT increased its NOI by 2.9% and FFO per unit by 0.8%. It last raised its cash distribution by close to 1.4% in March. The new cash distribution equates to an annualized payout of $0.75 per unit, which results in a cash distribution yield of 5.5% at $13.63 per unit at writing. At this quotation, analysts think the stock is discounted by about 14%.
Granite REIT (TSX:GRT.UN) earns rental income from about 128 properties primarily in the United States and Canada. Its other properties are located in Germany, the Netherlands, and Austria.
The stock has been building a base from $80 to $85 per unit this year. A technical breakout above $85 could set the stock higher, as the analyst 12-month consensus price target indicates it trades at a discount of close to 15%.
The industrial REIT is the top Canadian Dividend Aristocrat within the Canadian REIT industry with the longest dividend-growth streak. Specifically, it has increased its cash distribution for 12 consecutive years. For reference, its five-year cash-distribution growth rate is 3.5%.
It last increased its cash distribution by almost 3.3% in December. At $83.73 per unit at writing, the stock yields 3.8%.