Don’t expect the recent Trump tariff tremors to calm down anytime soon. Indeed, the significant risk is that Trump raises the bar on tariffs once the 90-day pause is over. And it’s unclear whether he’ll be as willing to hit the pause button if deals can’t be struck in the coming weeks and months. Either way, Canadian investors should reassess their risk profile and ensure they’re not in a spot to skate offside come the next wave of tariff turbulence. Though it’s not an easy time to be a new investor, I think that increased volatility acts as more of an opportunity to buy rather than a red flag to sell, at least if you’re committed to staying invested for the next eight years or more.
Arguably, more volatility is a good thing for new investors within the Gen Z or Millennial cohorts. If you don’t have as much market exposure as you would have liked, the Trump tremors could give you a chance to get shares of some pretty wonderful businesses on the cheap.
As for those closing in on retirement, I think some of the higher-yielding securities out there deserve respect while they’re treading water over the market’s next turn. Indeed, we’re not just talking about the battered dividend stocks that are in harm’s way as tariffs come to be. Some high-quality real estate investment trusts (REITs) can allow you to get a nice raise without having to jump into the deep end of the wavy market waters.
In this piece, we’ll go over two top Canadian REITs that offer jumbo distribution yields and could prove a bargain once the worst of tariffs disappear — whenever that may be!
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CT REIT
Retail REITs won’t be every income investor’s cup of tea. However, CT REIT (TSX: CRT.UN) is a best-in-breed REIT that’s worth looking into, especially if you’re a fan of the retailer (Canadian Tire) that’s housed by the REIT. In prior pieces, I highlighted that CT REIT’s relative lack of diversification (unsurprisingly, Canadian Tire pays a vast majority of the rent) was actually a good thing. Indeed, Canadian Tire is an iconic retailer that’s been through tough times before.
And while tariffs could disrupt the retailer, don’t count on the well-run, highly liquid firm to come up short on rent. As a less volatile (0.86 beta) and more income-rich way to bet on the historic retailer, I consider CRT.UN shares a great bet right here, while the yield is just north of 6.4%. Sure, the name won’t be completely immune from turbulence, but at the very least, it has a well-covered payout and an incredibly high occupancy rate, thanks primarily to its top tenant.
Canadian Apartment Properties REIT
Canadian Apartment Properties REIT (TSX: CAR.UN) may very well be the best residential REIT to buy on weakness. The yield is just shy of 4% after the 30% drop from 52-week highs. Now down close to 37% from all-time highs, the residential REIT with ample business in Vancouver and Toronto stands out as intriguing. You’re getting a front-row seat to two hot Canadian rental markets. And while tariffs and a recession could make for rougher waters, I’d not give up on the name while its yield is on the high end of the historical range.
