If you’re looking to make the smartest choice for your $100 investment in dividend stocks, let me introduce you to three compelling contenders. Each of these are real estate investment trusts (REIT) offering up strong income. And that income is only going to continue, as each are in strong, reliable industries. So let’s explore why these picks are worth every penny of your investment.
Dream Industrial
Dream Industrial REIT (TSX:DIR.UN) is a star player in the industrial real estate sector. This dividend stock owns a portfolio of warehouses and logistics properties spread across Canada, the United States, and Europe, catering to the ever-growing demand for e-commerce and distribution spaces.
The numbers don’t lie. As of September 30, 2024, Dream Industrial had a profit margin of 29.2% and an impressive operating margin of 70.5%. It has a forward price/earnings (P/E) ratio of 12.8, which signals good value compared to its earnings growth prospects. Dream Industrial also offers a dividend yield of 5.6%, making it a steady source of income for investors. While its quarterly earnings growth dipped recently, the long-term demand for industrial spaces should keep this dividend stock in a favourable position.
SmartCentres
SmartCentres REIT (TSX:SRU.UN) stands out as a giant in the retail real estate sector, with a strong focus on community-based shopping centres anchored by reliable tenants like Walmart. With a profit margin of 13.4% and an operating margin of 54.6% as of September 30, 2024, SmartCentres shows it knows how to turn revenue into substantial profits.
The forward P/E ratio of 13.4 also points to a reasonable valuation for this high-quality REIT. Its dividend yield of 7.3% is one of the most attractive in the market, thus offering a compelling reward for income-focused investors. While retail REITs face challenges in an evolving consumer landscape, SmartCentres’ focus on essential retailers provides it with a layer of resilience that other retail-focused REITs might lack.
NorthWest
NorthWest Healthcare Properties REIT (TSX:NWH.UN) is your ticket to investing in the healthcare real estate sector. A unique niche that benefits from the essential nature of its properties. Owning and managing hospitals, clinics, and medical offices, NorthWest offers a stable investment choice.
As of June 30, 2024, the dividend stock reported revenue of $523.9 million and a forward P/E ratio of 11.6, suggesting a strong earnings outlook. Its dividend yield is an enticing 7.2%. Perfect for investors seeking reliable passive income. While NorthWest has struggled with a net loss recently, the essential nature of its healthcare properties positions it for long-term stability. After all, people will always need healthcare, and the real estate supporting it will remain critical.
A winning combo
What makes these three dividend stocks particularly appealing is the diversification they offer across different segments of the real estate market. By splitting your $100 investment among DIR.UN, SRU.UN, and NWH.UN, you gain exposure to industrial, retail, and healthcare real estate, reducing your overall risk. While Dream Industrial benefits from the global demand for logistics and warehousing, SmartCentres capitalizes on consumer spending, and NorthWest anchors itself in the ever-necessary healthcare industry. This diversification is a huge advantage, especially if you’re looking to mitigate sector-specific risks.
The future outlook for these REITs is equally promising. Dream Industrial is poised to grow as e-commerce and global trade drive demand for logistics facilities. SmartCentres continues to evolve by diversifying its properties to include mixed-use developments that combine retail, residential, and office spaces. And NorthWest is expanding its global healthcare footprint, tapping into new markets and opportunities for growth.
Bottom line
Ultimately, if you’re looking for a way to make your $100 work harder, investing in DIR.UN, SRU.UN, and NWH.UN is a smart choice. With strong historical performance, promising future outlook, and reliable dividend yields, these dividend stocks provide a balanced approach to building wealth through real estate investments. Plus, the diversification they offer makes them a well-rounded addition to any portfolio. So, why wait? These REITs might just be the best-kept secret for dividend investors looking to grow their money.
