There are strong dividend stocks, and then there are stocks like SmartCentres Real Estate Investment Trust (TSX:SRU.UN). The real estate investment trust (REIT) has earned a strong reputation among income-focused investors, and it’s not hard to see why. This Canadian REIT consistently offers attractive monthly dividends backed by solid financial fundamentals, efficient operations, and a reliable income-generating property portfolio. For anyone building a passive-income stream, SmartCentres could be a cornerstone choice.
Dividend strength
To start, let’s talk about SmartCentres’s dividend performance. For Canadian dividend investors, consistent income is a top priority, and SmartCentres has been delivering on that. Most recently, it declared a monthly dividend of $0.1542 per unit, adding up to an annual payout of $1.85 per unit. This generates a forward annual yield of 7.41% at writing. Standing out in today’s market for being both substantial and steady. Even better, SmartCentres has a track record of keeping dividends consistent. This gives investors confidence in the reliability of their income.
SmartCentres’s financial metrics back up its strong income performance. During the second quarter of 2024, SmartCentres reported a profit margin of 29.07% and an operating margin of 57.33%. These numbers show how efficiently the REIT manages costs and turns its revenues into profit. Furthermore, SmartCentres’s return on assets (ROA) was reported at 2.99%, and the return on equity (ROE) was 5.35%. Both reflect its efficient use of assets and shareholder investments to generate solid returns.
Its debt profile is also noteworthy. SmartCentres recently reported a total debt of $5.1 billion against total assets of approximately $12.0 billion, resulting in a debt-to-equity ratio of 80.88%. This is a manageable level of debt for a REIT — particularly one with such a vast asset base and a consistently high occupancy rate.
The portfolio
SmartCentres’s asset portfolio is one of its biggest strengths. With 195 properties strategically located across Canada, it covers over 35.1 million square feet of income-producing space. This includes retail properties and office spaces that attract and maintain high tenant occupancy. In fact, as of the most recent reports, SmartCentres achieved an occupancy rate of 98.2%! Such robust occupancy levels contribute significantly to steady rental income. This, in turn, supports the REIT’s dividend payouts.
Plus, SmartCentres has been proactive in expanding its portfolio and increasing the value of its existing assets. It manages a mixed-use portfolio that includes both retail and office spaces — adapting to market trends that show a growing interest in integrated property solutions. With high-quality properties located in key Canadian markets, SmartCentres is in a favourable position to maintain its revenue stability and even grow its income over the long term.
Bottom line
SmartCentres has built a reliable name in the Canadian REIT space. Its combination of a consistent dividend yield, stable occupancy rates, diversified property portfolio, and well-managed financial leverage makes it an attractive choice for anyone focused on generating passive income. Whether you’re a seasoned investor or just starting to explore REITs, SmartCentres offers an opportunity to receive income — all from a well-established, income-generating real estate investment trust that continues to stand the test of time.
