A trustworthy Canadian dividend stock typically boasts a strong track record of consistent dividend payments – ideally with a history of increasing those payouts over time, which shows a commitment to returning value to shareholders. For investors, look for companies with solid fundamentals, such as healthy cash flow, manageable debt levels, and stable earnings, as these factors indicate that they can sustain their dividends even during economic downturns.
Furthermore, a high payout ratio can be a red flag, so it’s wise to seek out stocks that balance dividend payments with reinvestment in growth. And that can be tricky among real estate investment trusts (REIT), which is why today we’re looking at three that are safe and stable.
CAPREIT
Canadian Apartment Properties REIT (TSX:CAR.UN) stands out as a trustworthy investment for several reasons. With a market cap of approximately $8.6 billion and a strong focus on residential properties, CAR.UN has demonstrated resilience and stability in the real estate sector. The REIT has a solid operating margin of 61.6%, showing its ability to generate consistent income from its properties. Moreover, it achieved significant quarterly revenue growth of 5.4% year-over-year during recent earnings. This reflects the increasing demand for quality rental units in Canada. Investors can also appreciate the relatively low price-to-book ratio of 0.9, showing that the stock may be undervalued compared to its net asset value. This makes it an attractive option for long-term holders.
Another reason to consider the stock is the REIT’s payout ratio, while high at 166%, shows its dedication to returning value to shareholders through dividends, with a forward yield of 2.9%. The recent quarterly earnings report highlights a remarkable 180.3% growth in quarterly earnings, which bodes well for future profitability. With strong fundamentals, a focus on residential properties, and a strategic approach to growth, CAR.UN presents a reliable investment for those looking to build wealth in the Canadian real estate market while benefiting from consistent rental income.
Granite REIT
Granite Real Estate Investment Trust (TSX:GRT.UN) is another trustworthy REIT that has proven its resilience and stability in the competitive real estate market. With a market cap of approximately $4.6 billion, GRT.UN demonstrates strong fundamentals, including a robust operating margin of 78.1% and an impressive profit margin of 42.5%. The REIT’s quarterly revenue growth of 7.6% year-over-year showcases its ability to adapt and thrive in changing market conditions. Additionally, a low price-to-book ratio of 0.8 suggests that the stock may be undervalued compared to its net asset value. This makes it an attractive option for long-term investors.
Another compelling reason to consider GRT.UN is its commitment to returning value to shareholders through dividends. The forward annual dividend yield of 4.5% and a payout ratio of 89.7% reflect the trust’s dedication to providing steady income to its investors. The recent growth in quarterly earnings, with a year-over-year increase of 21.9%, highlights GRT.UN’s potential for continued success. Furthermore, with 73% of shares held by institutions, there’s a level of confidence from larger investors. This can further stabilize the stock and its reliability.
RioCan
RioCan Real Estate Investment Trust (TSX:REI.UN) stands out as a trustworthy REIT due to its solid financial performance and strategic positioning in the Canadian real estate market. With a market cap of approximately $5.4 billion and a compelling forward P/E ratio of 10.5, the REIT offers a favourable valuation compared to its peers. The price-to-book ratio of 0.7 indicates that investors might be getting a good deal for the underlying assets. This makes it an attractive option for long-term holders. Additionally, REI.UN has shown steady quarterly revenue growth of 5.7% year-over-year, reflecting its ability to adapt and thrive in a competitive environment. Its operating margin of 59.4% demonstrates effective cost management. This is crucial for maintaining profitability.
Another reason investors can trust REI.UN is its commitment to providing reliable income through dividends. With a forward annual dividend yield of 6.2% and a trailing annual yield of 6.1%, this REIT offers a strong income stream. Furthermore, the REIT’s substantial insider ownership (0.3%) and institutional holdings (39.6%) signal confidence from both management and larger investors. As REI.UN continues to navigate the evolving real estate landscape, its blend of solid fundamentals and income potential positions it as a trustworthy choice for investors looking for stability in their portfolios.
