It’s about time that Canadian income investors, given the REIT (real estate investment trust) opportunity, pay some more respect. Sure, they’ve been rather untimely plays since the pandemic began. That said, the tides are turning in their favour in a big way, with rates destined to head lower from current levels. Though I have no idea when the Bank of Canada (BoC) will act next and how much they’ll cut interest rates, I still think that the top REITs are starting to get rather timely. Of course, the low-rate environment to come has already helped propel many of the top REITs in recent months.
Some of the REITs are up double-digit percentage points so far this year. Either way, the hot run seems to have come in a bit. And as many of the previously hot names enter correction territory, I believe that Canadian investors will have a chance to get a bit more yield for a slightly lower price of admission in the fourth quarter.
As always, buying stocks or REITs on the way down can entail near-term losses. So, do be ready to ride out a correction that may easily evolve into something worse (perhaps a bear market) in the coming months and quarters. For Canadian investors seeking a huge yield that has a chance of staying intact as Canada escapes the pinch of high rates and inflation, consider the following REIT and dividend stock, which boast yields well north of the 8% level at the time of writing.
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Slate Grocery REIT
Slate Grocery REIT (TSX: SGR.UN) offers one of the more generous yields in the REIT scene these days. Despite rallying more than 25% in the past year, the yield sits at just shy of 8.5%. The REIT has a lot more going for it than just the size of its payout, though. The REIT’s distribution may have felt a bit of pressure a year ago when shares were on a fast decline. After a few decent quarterly showings, it seems like the swollen distribution is getting safer with time.
Indeed, as long as funds from operations cover the payout, investors shouldn’t hit the panic button over a potential distribution cut. Additionally, the grocery scene has been a pillar of stability lately, as consumers flock to grocery retailers for more competitive prices to counter inflation’s impact. As rates fall and property prices show signs of bottoming out, I’d look for Slate to continue its nice run.
BCE
BCE (TSX: BCE) stock still yields 8.73%, even after marching close to 7% off its multi-year lows. Undoubtedly, BCE stock seems to have bottomed out, but the stock is in no hurry to regain the ground lost in recent years. The company is continuing to cut jobs and unload assets in an effort to shore up cash flow and engineer some sort of turnaround.
Thus far, it seems like investors aren’t all too confident in the $42 billion telecom titan’s comeback prospects. Though the dividend isn’t on the most stable of footing, I do think the firm has what it takes to get things under control and win back the income investors it shed in recent years. Sure, BCE is untimely, but you will get paid a fat sum to wait. Perhaps looming lower rates and the depressed valuation alone warrant going against the grain.
