Stock investors need to reassess their positions in 2025 because of trade tensions. Market volatility has intensified and might extend until new trade agreements are reached. If you’re a dividend investor, consider taking positions in Canadian stocks that pay well-protected monthly dividends.
Canadian Apartment Properties (TSX:CAR.UN) and Northland Power (TSX:NPI) are relatively safe options in the current bear market. The former is Canada’s king of residential real estate investment trust (REIT), while the latter is an operator of sustainable infrastructure assets. You can allocate $3,500 in each and receive recurring passive income streams.
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Residential REIT
Canadian Apartment Properties, or CAPREIT, owns and operates multi-unit residential properties. The portfolio comprises apartment buildings, townhouses, and manufactured home community sites in major urban centres across Canada and in the Netherlands. Given the growing population and ever-increasing housing demand, the $6.3 billion landlord maintains solid fundamentals and should thrive for years.
At $39.32 per share, the dividend yield is a decent 3.9%. Management’s priority is to upgrade the quality and diversify the property portfolio. Capital recycling initiatives and ongoing repositioning would help grow earnings and cash flow potential.
In 2024, operating revenues and net operating income (NOI) increased 4.5% and 5.5% year-over-year to $1.1 billion and $730.7 million, respectively. CAPREIT’s net income reached $292.7 million compared to the $411.6 net loss in 2023. The portfolio’s occupancy rate for the year was solid at 97.2% (97.5% in Canada and 94.6% in the Netherlands).
CAPREIT is laser-focused on becoming the best-quality business that it can be. The full-year 2024 financial results reflect the REIT’s progress towards that objective. Its portfolio repositioning program in Canada is the center of the current strategy. The long-standing, mid-market, and largely rent-controlled Canadian rental properties assure long-term growth runway and returns stability.
The portfolio repositioning efforts should enhance CAPREIT’s free cash flow (FCF). Since going public in 1997, this top-tier REIT hasn’t missed paying monthly cash distributions.
According to its President and CEO, Mark Kenney, the REIT is well-positioned to withstand the shorter-term gyrations in supply-demand dynamics. “We believe that longer-term market fundamentals remain robust for the residential rental industry in Canada,” he added.
Resilient platform
Northland Power is up plus-5.2% year-to-date versus the TSX’s negative 4.9%. At $18.52 per share, the utility stock’s dividend yield is a hefty 6.5%. A $3,500 investment will generate $226.10 in passive income ($18.84 monthly).
The $4.8 billion company develops, constructs, and operates independent power projects. It produces electricity from renewable resources like wind, solar, and clean-burning natural gas. The active development strategy focuses on creating high-quality projects supported by long-term revenue contracts.
In 2024, net income was $371.4 million compared to the $96.1 million net loss in 2023. Cash provided by operating activities rose 26.9% year-over-year to $1 billion.
Christine Healy, President and CEO of Northland Power, said, “Our diversified technology mix, ranging from wind and solar to energy storage and natural gas, provides us with a resilient platform, enabling us to adapt to evolving market conditions and leverage growth across multiple sectors.”
Ideal combination
CAPREIT and Northland Power offer diversification (utility and real estate sectors) and sustained income streams. The monthly dividends are also shields against a potential recession.
