This 8% Dividend Stock Pays Cash Every Month

This dividend stock has a solid present, and a strong future for investors looking to gain monthly passive income while they wait.

Amy Legate-Wolfe

Amy became interested in investing in 2018 after having her first daughter. After receiving a masters degree in journalism from Western University, she became frustrated that the finance industry remained a confusing place for Canadians like her: new parents, millennials, and other young people who needed to understand their finances. Now, Amy focuses on tech companies and renewable energy for growth opportunities, coupling that with long-term investing strategies and equities. She also provides investors with a daily newsletter, Canada Stock Digest, for daily market updates. Before joining Motley Fool Canada, she wrote for major news organizations including HuffPost, CTVNews.ca, and CBC. When she’s not researching investing strategies, Amy’s time is pretty much monopolized by her two wild daughters, but in what little spare time she has she loves to do yoga, go on walks with her dog, and travel with her husband. Follow Amy on LinkedIn and Canada Stock Digest. Favorite Investment Quote: “October: This is one of the particularly dangerous months to speculate in stocks. The others are July, January, September, April, November, May, March, June, December, August and February.” – Mark Twain

Published March 15, 2024 9:15 pm EDT

Canadian investors may still have a focus on creating passive income from dividend stocks. Yet if you’re like me, you might also be shifting towards finding dividend stocks that offer growth in the near future. And if so, you’re wanting monthly income while you wait!

So today, we’re going to look at a dividend stock currently yielding a whopping 8%. What’s more, it’s in a growing and expanding sector. So let’s get right into it.

Going industrial

When it comes to finding great dividend stocks, real estate investment trusts (REIT) are where many might start looking. Yet there are still so many to search through! Which is why I would recommend narrowing your focus to industrial REITs for long-term growth and immediate dividends.

Industrial REITs have a strong outlook based on numerous factors. The rise of e-commerce continues to drive demand for warehouse and distribution space. Industrial REITs cater to this sector and should certainly benefit.

Furthermore, there are a limited supply. Vacancy rates for industrial properties tend to be low, meaning there’s a healthy demand for the space currently available. This further allows these companies to demand high rents.

These dividend stocks also provide a hedge against inflation, since they can raise rents to keep pace. This can protect your investment value long term.

A “Smart” investment

If you’re looking at this sector then, I would certainly consider SmartCentres REIT (TSX:SRU.UN). This REIT invests in industrial properties, including self-storage facilities, light industrial properties, and distribution centres. It operates with a focus on strong self-storage as well as healthy occupancy rates.

This focus is something analysts view as a strength as well. That’s because there continues to be consistent demand for self-storage in particular.

So not only are you going to gain exposure to the growth of the industrial sector, but it’s based on consistent demand as well. And that’s been seen during its most recent earnings report.

Earning their earnings

During its most recent earnings report, SRU reported occupancy at an exceptional 98.5%, with minimal vacant space and consistent rental income. Further, it will be signing on more new leases, with the average rent growing by 5.3%.

The dividend stock is also constructing more self-storage facilities, as well as residential developments. All while remaining solid in terms of finances. The company saw net operating income (NOI) rise slightly, though falling slightly below analyst targets.

Funds from operations (FFO) grew slightly as well, in part from condo sales. Net income, however, decreased, as did its payout ratio. Overall, the REIT saw stable earnings that show it may be neutral now. However, it should show a huge increase when residential properties grow in demand in the future. Never mind the growth from current industrial properties.

Bottom line

SRU is a solid stock to consider as it continues to expand. It now offers a diverse range of properties, from self-storage to residences. What’s more, earnings remain stable even while the market turns away from REITs. So now could be an excellent time to consider the stock, especially while you bring in an 8% dividend yield. One that comes out each and every month.