For investors who are looking for passive income, there is nothing better than dividend stocks. However, to ensure sustainable dividend payouts in the long run, they must select companies with excellent financials and strong growth prospects.
In this regard, Dream Industrial REIT (TSX:DIR.UN) stock can be an excellent choice. It is one of Canada’s largest real estate investment trusts (REITs) with a portfolio of around 321 industrial assets across its home country, USA and Europe. This REIT aims to generate profitable returns for its unitholders by securing strong cash flows via an investment-grade balance sheet and a high-quality asset portfolio.
Here are a few reasons why investors should consider adding this stock, which currently yields 5.7%, to their portfolios.
Another dividend distribution declared
Dream Industrial REIT initiates dividend payouts to its unitholders on a monthly basis. For October 2023, it has declared a payment of US$0.058 per unit, amounting to US$0.70 per unit annually.
This dividend will be payable on Nov. 15 for shareholders of record on Oct. 30. Currently, the company’s dividend yield sits at an even 5.7% at the time of writing, which is substantially higher than the 3.91% sectorial average, indicating the stock’s market-beating potential.
Strong financial performance in Q3 2023
Dream Industrial REIT recently reported excellent financial performance in the third quarter (Q3) of 2023. The REIT saw 17.4% growth in its net rental income, amounting to US$84.5 million.
Its comparative properties net operating income also appreciated by 10.4%, with figures reaching US$84.6 million. Diluted FFO also increased by 10.4%, reaching USD 0.25/unit from last year’s US$0.22/unit.
The REIT’s total assets reached US$7.9 billion, indicating 7.9% growth. As per sources, higher investment property values and acquisitions were the main driving factors behind this growth.
Dream Industrial renews its at-the-market equity program
In early September, Dream Industrial filed and obtained a receipt for its final base shelf prospectus of its at-the-market equity program. This will be valid for 25 months and will allow the REIT to issue units, debt securities, and subscription receipts from time to time.
It has also renewed its at-the-market equity program. The trust can now issue units up to US$250 million from its treasury to the public at its discretion.
With the funds generated, DIR plans on repaying debts, along with developing and redeveloping its existing assets. It also plans on utilizing the money for future property acquisitions and general trust purposes.
Bottom line
Given the solid financials and growth prospects of Dream Industrial REIT, this trust can sustainably keep on providing dividend payouts in the long run. Thus, investors looking for dividend stocks should definitely add it to their portfolios.
