The Bank of Canada (BoC) has done it again. The BoC increased the interest rate to 5% this week as inflation rose, though only slightly. The economy in Canada continues to remain resilient in the face of inflation. With prices starting to stabilize, there is hope that we could certainly see a soft landing when it comes to entering a recession or not.
Yet that still doesn’t help if you’re struggling with these rising rates to begin with. That’s why today, we’re going to look at two top dividend stocks with yields above 8%. While they may be down now, they’re due for a huge recovery when the markets rebound. That means you can lock up a higher yield while you wait.
Sienna Senior Living
When it comes to healthcare stocks, there are few that offer the growth and stability of senior living residences. That’s why today, one of the best dividend stocks you can pick up is Sienna Senior Living (TSX: SIA). Sienna stock is a strong choice for those wanting to attach themselves to the growing momentum of the baby boomer population beginning to age. In the next decade and beyond, as this population ages, they will continue to need more healthcare availability and, in many cases, in a senior living facility.
During its most recent earnings report, Sienna stock announced strong year-over-year results. The company’s same-property net operating income (NOI) increased by 9.9% to $34.7 million, which included an 11% increase in retirement homes and 9.1% in long-term care.
Retirement occupancy increased during that time to 88.2%, with long-term care reaching 96.8%. Sienna stock has also been focusing on keeping down costs and, unfortunately, had to let go of staff, resulting in staffing cost savings of 35% year over year. With construction underway on many campuses, there is certainly room for optimism.
“As we move further into 2023, we have many reasons to be encouraged. Strong demand for our retirement residences supported significant year-over-year growth in our same-property NOI, our long-term care communities continued to stabilize, and our focus on cost management is showing early signs of success.”
Nitin Jain, president and chief executive officer
Shares of Sienna stock are down 11% in the last year, with a dividend yield of 8.38% as of writing.
Slate Grocery REIT
Another strong option if you’re on the hunt for high-yielding, safe dividend stocks is to consider consumer staples. That’s certainly what you can get when investing in grocery-anchored real estate investment trusts (REIT). Of these, Slate Grocery REIT (TSX: SGR.UN) would certainly be a top choice. Prices may rise, but grocery chains will continue to be in demand to feed the masses. And Slate stock has a diverse portfolio of different brands throughout the United States, where competition is varied.
During the most recent earnings report, Slate stock announced that both occupancy and revenue growth came in the quarter, with new deals 17.1% above average for the company. New leasing also drove an increase to 93.7% occupancy at the end of the quarter, with net operating income (NOI) up 3% year over year.
Even as interest rates rise, the company has managed to see adjusted funds from operations (AFFO) increase by $100,000. Furthermore, it created a partnership with the potential to provide a “consistent source of private equity capital in addition to the REIT’s public funding strategies,” the statement read.
“Against a backdrop of persistent inflation and rising rates, our grocery-anchored real estate continues to demonstrate its durability and ability to perform. Demand for our high-quality, well-located spaces has driven strong leasing momentum in the first quarter, boosting occupancy and revenue growth within our portfolio. Looking ahead, we believe our below market rents will enable us to further grow organically and our strong liquidity position will allow us to grow through strategic, high-quality acquisitions that will be accretive to our unitholders.”
Blair Welch, chief executive officer of Slate Grocery REIT.
Shares of Slate stock are down 4.4% in the last year, with a current dividend yield of 8.69%.
