Now, before I get into this article, it’s important to note something. Dividend yields aren’t everything. In fact, finding dividend stocks with high dividend yields can be quite dangerous, although tempting.
That’s why today we’re going to look at three dividend stocks that may have dividend yields above 10%, but the question is: why? Then we can determine whether these dividend stocks are worth your time or worth forgetting.
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Allied Properties
First up on our list, we have Allied Properties REIT (TSX: AP.UN) with a dividend yield of 11.08% as of writing. The stock focuses on workplace real estate, specifically, in urban locations. This, of course, is likely why the stock is down right now.
Offices already have been struggling since the pandemic. Add in higher mortgage rates and lower turnover, and it can be tricky for stocks like these. But in the case of Allied stock, it could be worth taking another look.
Allied stock tends to take run-down buildings and turn them into trendy office spaces for clients. This means low investment and huge returns. In fact, analysts peg it as a buy right now. So, even though shares are down 42% in the last year, with that juicy dividend, it might be worth taking another look.
Bridgemarq Real Estate
Another of the dividend stocks to take a peek at is Bridgemarq Real Estate Services (TSX: BRE). Bridgemarq stock currently has a dividend yield of 11.18%, as of writing. The key for Bridgemarq here is that the company isn’t a real estate investor. Instead, it provides the services that real estate companies need.
With high interest rates causing higher mortgages, the housing market has dropped, as we’ve seen. This means services from Bridgemarq stock aren’t in as high demand as they once were.
Yet again, this could turn around in the near future. These services will always be needed, but the question is, when will it recover? I have no crystal ball, but I’m sure the stock will come back eventually. So, it might be worth considering, with shares trading down 14% in the last year.
Slate Grocery REIT
Finally, Slate Grocery REIT (TSX: SGR.UN) is certainly another of the dividend stocks to consider. It boasts an 11.31% dividend yield as of writing and trades at just 10.64 times earnings. Now, this company focuses on grocery chains located across the United States. And that here is the key to its success.
In the U.S., there is far more competition and, therefore, more options for investment. Slate stock has then invested across the country, creating ample opportunity for growth. The key here is that grocery locations are critical, essential real estate. And in the U.S., there is a never-ending need for these locations.
So, with shares down 25% in the last year, now is a great time for the patient investor to consider picking up Slate stock. Of course, as with the others, do your own research to make sure that the dividend is worth it. As I said, dividend stocks are nice. But you shouldn’t trade dividends for returns. Instead, opt for both.
