This 5.44% Dividend Stock Pays You Cash Every Month

Here’s a high-yield REIT is ideal for portfolio diversification, not to mention the monthly cash flow streams for income-focused investors.

| More on:
Canadian Dollars bills

Source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s premium investing services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Canada’s real estate sector is slowly rising from its slump due to the ongoing rate-cutting cycle. Industry experts believe the Bank of Canada has rescued the housing market, particularly by its rate actions. Buyers have returned after four rate reductions; more will come out if there’s another cut in December.

According to the Canadian Real Estate Association (CREA), the October 2024 home sales are back to historical levels. On the investment front, market analysts say real estate investment trusts (REITs) are big winners and good investment options.

Many income-focused investors will invest in REITs again for two reasons: high dividend yields and monthly cash payouts. The payout frequency of most dividend payers outside the real estate sector is quarterly.

Logical pick

At $13.97 per share, Choice Properties (TSX:CHP.UN) is a logical pick. The $10.2 billion REIT, one of Canada’s established and largest institutional landlords, deserves serious attention. Besides its scale and size, the dividend yield is a hefty 5.44%. If you can accumulate 2,370 shares ($33,108.90), your investment transforms to $150 in monthly passive income.

Created with Highcharts 11.4.3Choice Properties Real Estate Investment Trust PriceZoom1M3M6MYTD1Y5Y10YALLwww.fool.ca

Choice Properties belongs to the strip center in the property sector. The REIT owns 705 high-quality properties, 82% of which are necessity-based retail properties (572). A unique competitive advantage is its long-standing strategic relationship with Loblaw. The tenancy of the iconic Canadian retailer versus the total portfolio is 57%.

Other prominent anchor tenants outside Loblaw banners contributing to stable and growing cash flows are Canadian Tire and Dollarama. The 122 industrial properties are well-located, while the 11 mixed-use and residential properties are transit-oriented.  

There are approximately 47 properties under development. Choice Properties enjoys a high 97.7% occupancy rate as of September 30, 2024. The weighted average lease term (WALT) is 5.9 years (6.2 years for Loblaw).   

Management said the pipeline, including retail intensifications and near-term industrial development, is positioned for growth and should drive medium and long-term value.

Financial performance and commitment

In the three months ending September 30, 2024, Choice Properties incurred a net loss of $662.9 million compared to a $435.9 million net income in the third quarter (Q3) of 2023. Still, its chief executive officer (CEO), Rael Diamond, said it was another quarter of strong operational and financial performance. Rental revenue increased 4.6% year over year to $339.9 million.

Diamond also notes the increasing demand from retail tenants for the REIT’s necessity-based neighbourhood centers and strong leasing spreads in the industrial portfolio.

One of the key objectives of Choice Properties is to provide unitholders with stable, predictable and reliable long-term growth. A review of the REIT’s dividend history shows that monthly cash dividends have been consistent since January 2017.

Canadian REIT outlook

Easing interest rates, population growth and favourable economic trends are tailwinds for Canada’s real estate landscape. The bounce back of the housing market augurs well and will positively impact REITs.

Established REITs like Choice Properties are ideal for portfolio diversification, not to mention monthly cash flow streams. You get a good deal at less than $15.

Should you invest $1,000 in Choice Properties Real Estate Investment Trust right now?

Before you buy stock in Choice Properties Real Estate Investment Trust, consider this:

The Motley Fool Stock Advisor Canada analyst team just identified what they believe are the Top Stocks for 2025 and Beyond for investors to buy now… and Choice Properties Real Estate Investment Trust wasn’t one of them. The Top Stocks that made the cut could potentially produce monster returns in the coming years.

Consider MercadoLibre, which we first recommended on January 8, 2014 ... if you invested $1,000 in the “eBay of Latin America” at the time of our recommendation, you’d have $20,697.16!*

Stock Advisor Canada provides investors with an easy-to-follow blueprint for success, including guidance on building a portfolio, regular updates from analysts, and two new stock picks each month – one from Canada and one from the U.S. The Stock Advisor Canada service has outperformed the return of S&P/TSX Composite Index by 29 percentage points since 2013*.

See the Top Stocks * Returns as of 3/20/25

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

Fool contributor Christopher Liew has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

Confidently Navigate Market Volatility: Claim Your Free Report!

Feeling uneasy about the ups and downs of the stock market lately? You’re not alone. At The Motley Fool Canada, we get it — and we’re here to help. We’ve crafted an essential guide designed to help you through these uncertain times: "5-Step Checklist: How to Prepare Your Portfolio for Volatility."

Don't miss out on this opportunity for peace of mind. Just click below to learn how to receive your complimentary report today!

Get Our Free Report Today

More on Dividend Stocks

Dividend Stocks

3 Canadian REIT Stocks to Buy and Hold for the Next Quarter-Century

These three Canadian REITs trade cheaply and are highly reliable, making them some of the best stocks you can buy…

Read more »

A train passes Morant's curve in Banff National Park in the Canadian Rockies.
Dividend Stocks

1 Practically Perfect Canadian Stock Down 24% to Buy Now and Hold for Life!

CNR stock is a top Canadian stock for investors, especially with shares down on the TSX today.

Read more »

Canada national flag waving in wind on clear day
Dividend Stocks

The Best Canadian Stocks to Buy Right Away With $30,000

If you have $30,000 you're willing to invest, these are some of the first Canadian stocks to consider on your…

Read more »

rail train
Dividend Stocks

What to Know About Canadian Pacific Railway Stock for 2025

CP stock has now gone through a major merger, so what do investors have to look forward to?

Read more »

ways to boost income
Dividend Stocks

Top Canadian Value Stocks I’d Buy for Dividend Growth and Appreciation

If you are looking for income and capital appreciation, here are three Canadian value stocks for a great total return…

Read more »

coins jump into piggy bank
Dividend Stocks

The Smartest Canadian Stock to Buy With $2,000 Right Now

The company’s powerful combination of growth, income, and value, positions it well to deliver solid returns, making it a smart…

Read more »

Transparent umbrella under heavy rain against water drops splash background. Rainy weather concept.
Dividend Stocks

This 10.6 Percent Dividend Stock Pays Cash Every Single Month

Are you looking to invest for a rainy day? This 10.6% dividend stock pays cash every month, irrespective of the…

Read more »

A worker gives a business presentation.
Dividend Stocks

Market Dip: Opportunity or Risk This April?

This market dip might have investors worried, but should they be excited instead?

Read more »