Invest $22,000 in This Dividend Stock for $108.50 in Monthly Passive Income

This dividend stock is a top option for investors looking for not just long-term passive income but regular income every month!

| More on:
Man holds Canadian dollars in differing amounts

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

Investing a $22,000 windfall in a dividend stock could set you up for consistent monthly passive income, all while building your wealth over the long term. In fact, there are many opportunities out there. But one of the most promising for monthly income at this stage is Dream Industrial REIT (TSX:DIR.UN).

Created with Highcharts 11.4.3Dream Industrial Real Estate Investment Trust PriceZoom1M3M6MYTD1Y5Y10YALLwww.fool.ca

Why Dream?

This industrial-focused real estate investment trust (REIT) provides exposure to a sector with strong growth potential and a solid history of distributing dividends to investors. Its forward annual dividend yield of 5.92% is a great starting point for income seekers. Translating to approximately $1,300 annually or over $108 per month. Here’s why DIR.UN could be a smart move for your financial goals.

First, let’s explore its recent earnings. As of the most recent quarter (Q3 2024), Dream Industrial reported a total revenue of $484.15 million, with quarterly revenue growth of 2.9% year over year. While earnings growth was negative, down about 73%, this dip is partly due to broader market pressures and one-time adjustments that don’t necessarily reflect the REIT’s long-term earning power. Importantly, the payout ratio stands at 146.68%. This is high but not uncommon in the REIT sector, where cash flows, rather than earnings, often fund distributions.

DIR.UN’s past performance demonstrates resilience. Despite a challenging market environment, its long-term average dividend yield of 5.34% shows consistent returns for investors. Over the past five years, Dream Industrial has managed to maintain steady payouts, even during periods of volatility. This reliability makes it an attractive option for those seeking predictable income.

Future growth

Looking to the future, the industrial real estate sector is poised for growth, driven by increasing demand for logistics and warehousing facilities. As e-commerce continues to expand, dividend stocks require more industrial spaces to store and distribute goods. Dream Industrial’s portfolio of properties across North America and Europe positions it well to benefit from this trend. The dividend stock’s price-to-book ratio of 0.74 indicates it’s trading below its intrinsic value, offering a potential bargain for value-focused investors.

With a market cap of $3.43 billion and enterprise value of $6.30 billion, DIR.UN is a significant player in its space. Its 64.69% debt-to-equity ratio, while high, is manageable given the stable cash flow generated by its properties. Operating cash flow of $311.81 million and levered free cash flow of $371.14 million further underscore the REIT’s ability to sustain its dividend payments.

Another factor in favour of DIR.UN is its diversified portfolio. The REIT isn’t overly reliant on a single market or tenant, which mitigates risk. Additionally, its international exposure provides some insulation against localized economic downturns, ensuring a steady income stream for investors. With a forward P/E ratio of 12.09, the valuation is appealing compared to peers, suggesting potential upside as the market recognizes its growth prospects, especially with shares near 52-week lows.

Bottom line

Investing $22,000 in DIR.UN could generate significant passive income over time. By reinvesting dividends, you could accelerate growth through compounding, turning your initial investment into a substantial income source. For instance, reinvesting the $108 monthly income into additional shares would allow you to purchase more units, further boosting your payouts.

COMPANYRECENT PRICENUMBER OF SHARESDIVIDENDTOTAL PAYOUTFREQUENCYTOTAL INVESTMENT
GSY – now$11.831,860$0.70$1,302monthly$22,000

Dream Industrial REIT offers a compelling case for dividend investors looking for monthly income. Its high yield, growth potential, and undervalued price make it an attractive choice. With your $22,000 windfall, you could establish a reliable income stream of $108.50 each month — all while enjoying the potential for capital appreciation in a sector backed by strong long-term fundamentals.

Should you invest $1,000 in Dream Industrial REIT right now?

Before you buy stock in Dream Industrial REIT, 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 Dream Industrial REIT 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 Amy Legate-Wolfe has no position in any of the stocks mentioned. The Motley Fool recommends Dream Industrial Real Estate Investment Trust. 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

analyze data
Dividend Stocks

How I’d Invest $28,000 in Canadian Natural Resource Stock to Amass Personal Wealth

Investing in TSX dividend stocks such as Enbridge can help you earn a passive-income stream in 2025.

Read more »

hand stacks coins
Dividend Stocks

Got $400? How I’d Start Building Income With 3 High-Yield Stocks for the Long Term

These high-yield dividend stocks have a solid payout history, making them compelling investments to generate passive income.

Read more »

A close up color image of a small green plant sprouting out of a pile of Canadian dollar coins "loonies."
Dividend Stocks

I’d Put $15,000 in These 3 Dividend-Growth Champions for Increasing Income Potential

Want to offset some volatility? Here are three defensive dividend-growth champions that can generate a juicy yield right now.

Read more »

Blocks conceptualizing Canada's Tax Free Savings Account
Dividend Stocks

Transform Your TFSA Into a Cash-Creating Machine With $7,000

Discover how the Tax-Free Savings Account can be your golden goose for generating cash without losing your investment.

Read more »

monthly desk calendar
Dividend Stocks

How I’d Invest $10,000 in Canadian Value Stocks for Monthly Dividend Income

A $10,000-diversified portfolio of value stocks focusing on dividend safety, yield, growth, and payment schedules can provide a reliable source…

Read more »

a person watches a downward arrow crash through the floor
Dividend Stocks

Is This Correction Your Chance? Top 4 Canadian Dividend Stocks on Sale

Stocks may be down, but now is your chance to get some of these top dividend stocks on sale.

Read more »

Confused person shrugging
Dividend Stocks

Where to Invest $2,500 in the TSX Today

These TSX stocks offer attractive dividends and a shot at decent upside on a rebound.

Read more »

Pile of Canadian dollar bills in various denominations
Dividend Stocks

Invest $25,000 in These Dividend Stocks for $1,956.66 in Annual Passive Income

Dividends stocks can make a huge difference, even if shares don't move an inch. And these might be the best.

Read more »