Now usually when we start focusing in on a dividend stock, investors like to see double digits. Yields that are so high you’re being paid handsomely to own them. But here’s the problem: would you rather have a high dividend yield, and almost no returns? Or a slightly lower dividend yield, and far higher returns?
I’m guessing the latter.
Which is why today we’re focusing on monthly-paying dividend stock SmartCentres REIT (TSX:SRU.UN). This real estate investment trust (REIT) has a strong outlook and proven to be a stable investment even during times of trouble. All while paying out a handsome 8.1% dividend yield. So let’s get into it.
About SmartCentres
First, let’s get into why SRU stock is so smart to begin with. SmartCentres REIT owns and manages a significant portfolio of retail properties across Canada. Many of these properties are anchored by Walmart, providing stable and reliable rental income. The REIT’s strategic focus on essential retail properties has helped it maintain high occupancy rates and stable rent collection even during economic downturns.
In fact, SmartCentres has shown resilience during periods of market stress. Its diverse tenant base, including essential service providers, has contributed to consistent financial performance. This stability makes it a strong candidate for future growth and income reliability.
This strength and reliability was seen during its most recent earnings reports. The company has consistently maintained high occupancy rates, around 97%, which underscores the strength of its tenant base. This stability is crucial for ensuring reliable rental income streams.
Dividend strength
What’s more, the dividend looks solid. SmartCentres has a history of consistent dividend payments. Over the years, the company has demonstrated a strong commitment to returning capital to shareholders, even during challenging economic periods. This consistency makes it a reliable source of income for dividend investors.
What’ more, while the dividend yield is high, SmartCentres has also shown a commitment to growing its dividend over time. This growth is a positive signal to investors about the company’s confidence in its future cash flows and financial health.
Finally, the focus on essential retail properties has proven resilient during economic downturns. This strategic positioning not only ensures consistent rental income but also supports the long-term sustainability of its dividend payments.
More to come
Those essential retail properties are key to the history of SRU stock, but also to the dividend stock’s future. SmartCentres is actively involved in various development projects, including mixed-use developments that combine residential, retail, and office spaces. These projects are expected to enhance revenue streams and asset values over time.
However, it’s also expanding beyond essential retail. SmartCentres has been developing residential properties as part of its mixed-use strategy. For example, the REIT has been working on multiple residential projects across Canada, including high-rise condominiums, townhomes, and rental apartments. These projects aim to provide long-term rental income and capital appreciation.
Furthermore, the dividend stock has also been exploring opportunities in self-storage facilities and seniors’ housing, further diversifying its portfolio. Altogether, this monthly-paying dividend stock has a lot going for it. With a strong history and an exciting future, it looks like a stellar buy on the TSX today for dividend seekers.
