There are many monthly dividend stocks out there, but few with the future potential of Dream Industrial REIT (TSX:DIR.UN). The dividend stock is shaping up as an attractive option for Canadian investors looking to boost their monthly passive income. For starters, the dividend stock offers a compelling monthly dividend yield of around 5.4%. This is a great choice for those looking to steadily grow their wealth without waiting for quarterly or yearly payouts. This real estate investment trust (REIT) has focused on delivering consistent income, thus making it an ideal choice for investors who prefer predictable cash flow.
Into earnings
The recent financial results only add to the dividend stock’s appeal. In Q3 2024, Dream Industrial REIT reported a net rental income increase of 7.1% year-over-year, reaching $90.5 million. This steady growth in rental income underlines Dream Industrial’s ability to keep income flowing from their properties, even as the real estate market fluctuates. Moreover, Dream achieved a 3.3% increase in net operating income across their properties, highlighting its success in maintaining occupancy and generating stable cash flow across Canada and Europe.
The dividend stock’s long-term outlook is promising. The trust has steadily grown its assets, with total assets reaching $8.1 billion as of September 30, 2024, up 2.8% from the end of 2023. This growth reflects Dream Industrial’s proactive approach, including investments in joint ventures and development projects. These lay a solid foundation for future expansion and income generation. Its focus on high-occupancy properties is another win, with occupancy standing strong at 95.5%.
In terms of financial stability, the dividend stock boasts a solid market cap of $3.8 billion. This scale gives them the flexibility to manage their $3 billion in debt, maintaining a balance that sustains both growth and investor returns. It has a forward price/earnings (P/E) ratio of 13.2, thus indicating that while the stock has performed well, it’s still attractively priced, giving investors value relative to its earnings potential.
The dividend
Despite some ups and downs, including a slight decrease in net income due to fair value adjustments on properties, DIR.UN remains a strong choice for income-seeking investors. Its trailing annual dividend yield of 5.4% sits above the industry average, offering an edge for passive income enthusiasts. With dividends paid monthly, investors can reinvest dividends more frequently, potentially compounding returns quicker than a quarterly payout.
The dividend stock also benefits from being in a sector that’s relatively resilient. Industrial real estate has seen demand grow over recent years due to factors like the e-commerce boom. This has increased the need for warehousing and distribution facilities. This trend supports Dream Industrial’s portfolio, which includes properties in Ontario, Quebec, Western Canada, and Europe.
In addition to monthly income, investing in DIR.UN brings exposure to real estate assets with growth potential. For long-term investors, this means potential capital appreciation as the real estate sector recovers and grows. The dividend stock has proven resilient in managing its assets, even when non-cash adjustments affect quarterly figures, such as the fair value loss on properties in Q3 2024.
Bottom line
So let’s say you were to put $15,000 into this top dividend stock, seeing it rise by another 34% as it has in the last year, and adding in dividends. Here’s what that might look like.
| COMPANY | RECENT PRICE | NUMBER OF SHARES | DIVIDEND | TOTAL PAYOUT | FREQUENCY | INVESTMENT |
| DIR.UN – now | $13 | 1,154 | $0.70 | $807.80 | monthly | $15,000 |
| DIR.UN – 34% | $17.42 | 1,154 | $0.70 | $807.80 | monthly | $20,102.68 |
Now you have $807.80 in dividends, plus $5,102.68 in returns for a total of $5,910.48 in passive income, or $492.54 monthly! All considered, Dream Industrial checks the boxes for a reliable, income-generating investment. For Canadians looking to add stable monthly income and diversify their portfolio with industrial real estate, Dream Industrial REIT stands out as an excellent option that aligns well with long-term passive income goals.
