When it comes to making passive income, dividend investing can often be the best and easiest way of creating long-term earnings. However, not all of these dividend stock income providers are alike.
Some may offer an opportunity through dividends but not through returns. For others, it’s the exact opposite. Today, however, we’re going to look at a dividend stock that offers both. With an attractive dividend yield of 8.2%, let’s look at why investors might consider SmartCentres REIT (TSX:SRU.UN).
Why SmartCentres
SmartCentres stock is a great dividend stock for a variety of reasons. But perhaps the best of these reasons is the company’s diversification. You’ve likely seen the company nearby, as it invests in open-air retail locations. These locations have partnerships with some of the biggest brands, including Wal-Mart and Canadian Tire.
However, what you may not be as aware of is the company has expanded out of retail as well. The dividend stock now invests in industrial properties as well. This is an important and growing area that will prove lucrative in the years to come, especially with its links to retail.
Furthermore, the dividend stock is investing in residential spaces. These include retirement homes — a growing need in Canada. This will allow Canadians to live and shop in the same area and provide SmartCentres stock with long-term income.
Yet shares are down
The thing is, the dividend stock has seen shares drop because of this investment in retail and residences. With higher interest rates and supply-chain disruptions, plus the weaker spending from high inflation, the dividend stock has dropped. Shares are now down 16% in the last year, as of writing.
When the dividend stock released its earnings report, the company saw minor increases of 3.2% in same-property net operating income. Rental income also increased by 3.7%, with net income up to $0.93 per unit.
These numbers aren’t great, but they show stability — especially as the dividend stock saw lease activity remain strong at a 98.2% occupancy rate. Furthermore, construction was underway on high-rise residences in Vaughan, Laval, and Ottawa for its mixed-use properties. So, while it’s not surging growth, there is stability to be had with this dividend stock.
Value abounds
Now that SmartCentres stock is stable, with growth expected in the years to come, it’s a great time to consider the dividend stock. The 8.2% dividend comes out on monthly basis at $1.85 per share annually. Shares trade at 11.72 times earnings as well, as of writing. So, with shares down, investors may want to consider picking up the stock as a long-term hold.
That high dividend yield means you’ll see income coming into your portfolio while you wait for the stock to recover. And as it’s a monthly dividend stock, that will happen almost immediately! In fact, let’s see what a $2,000 investment could bring in on the TSX today.
| COMPANY | RECENT PRICE | NUMBER OF SHARES | DIVIDEND | TOTAL PAYOUT | FREQUENCY |
| SGR.UN | $22 | 91 | $1.85 | $168.35 | monthly |
So, even while your shares remain down, you’ll have an extra $168.35 in your pocket each year. That’s a nice little $14.03 each month. While not every dividend stock with a high yield is a great buy, I would urge investors to look further into whether SmartCentres dividend stock works with your goals.
