If you’re looking to generate passive income with a reliable Canadian stock, SmartCentres Real Estate Investment Trust (TSX:SRU.UN) could be a strong choice. With a robust portfolio of commercial and residential properties across Canada, SmartCentres has built a reputation as a steady income generator for investors. The dividend stock’s focus on high-quality tenants, including Walmart-anchored shopping centres, provides stability even in uncertain economic times.
Value and income
One of the most attractive aspects of SmartCentres is its dividend yield. The dividend stock currently offers a forward annual dividend rate of $1.85 per unit, with a yield hovering around 7.26% at writing. This translates to a figure that can provide a meaningful addition to an income stream or be reinvested for compounding growth over time.
Recent earnings demonstrated SmartCentres’s resilience and growth potential. In its fourth-quarter and full-year results for 2024, the dividend stock reported a 9% increase in net operating income compared to the previous year. Funds from operations (FFO), a key metric for REITs, also saw strong growth, reaching $0.56 per unit, or a 9.8% increase year over year. This improvement in FFO highlights SmartCentres’s ability to generate cash flow. This is critical for maintaining and increasing dividends over time.
SmartCentres continues to expand its operations beyond traditional retail spaces. The dividend stock has been actively investing in mixed-use developments. Incorporating residential, office, and self-storage properties to diversify revenue sources. This strategy allows the dividend stock to adapt to shifting market conditions and consumer trends, ensuring it remains relevant and profitable in the long run. The addition of residential developments, in particular, has helped SmartCentres create more sustainable revenue streams as demand for housing in urban centres continues to rise.
Stable future income
The trust’s strong leasing performance is another positive indicator of its stability. With an occupancy rate of 98.7%, one of its highest in five years, SmartCentres has demonstrated its ability to maintain a steady rental income. Plus, leasing activity remains strong, with the dividend stock executing deals for nearly half a million square feet of retail and new construction space over the past year. These figures underscore the trust’s ability to attract and retain tenants — crucial for sustaining dividend payouts.
From a financial perspective, SmartCentres maintains a solid balance sheet. The dividend stock’s debt-to-aggregate assets ratio sits at 43.7%, and it holds approximately $833 million in liquidity. This strong financial position gives SmartCentres the flexibility to continue funding its development projects — all while ensuring dividend payments remain secure. For investors, this means greater confidence in the sustainability of returns, particularly during economic downturns when cash flow stability becomes even more critical.
Over the past year, SmartCentres stock has delivered moderate gains, reflecting investor confidence in its long-term potential. Year to date, the dividend stock has seen a 4.2% increase in its share price, indicating steady performance even in a fluctuating market. While the stock traded within a range, its ability to maintain value and provide consistent dividend income makes it a dependable choice for income-focused investors.
Bottom line
For those considering an investment of $3,000, SmartCentres offers a balance of high yield and long-term stability. As SmartCentres continues to expand its portfolio and strengthen its financial position, there is also the potential for capital appreciation, further enhancing its appeal. So, how much could investors earn today?
| COMPANY | RECENT PRICE | NUMBER OF SHARES | DIVIDEND | TOTAL PAYOUT | FREQUENCY | TOTAL INVESTMENT |
| SRU.UN | $25.65 | 117 | $1.85 | $216.45 | monthly | $3,000 |
Investors could, therefore, earn $216.45 each year from a $3,000 investment. That’s about $18 a month! Thus, the outlook for SmartCentres remains positive as the company capitalizes on its strategic developments. With its strong tenant base, ongoing diversification efforts, and solid financial management, the dividend stock is well-positioned to sustain its dividend payouts and deliver steady returns. As a long-term investment, SmartCentres provides a compelling opportunity for those seeking reliable income generation in the real estate sector.
