When the markets are rocky, and investors are chasing growth stocks that rise and fall on a whim, sometimes it’s comforting to come back to the basics. A reliable dividend stock that quietly pays you every month, no drama, no hype, just consistent income. That’s where Plaza Retail REIT (TSX: PLZ.UN) comes in. This Canadian real estate investment trust (REIT) doesn’t grab headlines, but for those seeking passive income, it may be just what you’re looking for.
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Plaza Retail
Plaza Retail REIT specializes in open-air shopping centres and stand-alone retail properties across Ontario, Quebec, and Atlantic Canada. It’s not trying to be flashy. Instead, it focuses on what it knows best: developing and managing smaller, convenience-based retail locations. These include grocery-anchored plazas and properties leased to everyday brands like Dollarama, Shoppers Drug Mart, and Canadian Tire. These are businesses Canadians turn to regardless of the economy, making Plaza’s revenue base remarkably stable.
As of writing, Plaza Retail REIT offers a dividend yield of 7.51%, with a monthly payout of $0.02333 per unit or $0.28 annually. That monthly dividend is particularly attractive for investors who want regular cash flow. Instead of waiting quarterly, you can count on a payment every month, like a paycheque from your portfolio. Whether you use it to cover bills, reinvest it, or just enjoy a coffee and a croissant guilt-free, that steady stream of cash can make investing feel more rewarding.
Strong numbers
Now, let’s talk financials. Plaza reported solid results in its 2024 year-end earnings. Net operating income (NOI) came in at $75 million, an increase of 6.6% from 2023. This growth was driven by higher base rents and steady leasing activity across its portfolio. Funds from operations (FFO), a key metric in evaluating REITs, landed at $40.5 million, or $0.363 per unit. While that’s down slightly from the previous year, the real strength shows in Plaza’s adjusted funds from operations (AFFO), which held steady at $31.9 million. AFFO is what really matters when evaluating the sustainability of dividends, and Plaza’s payout ratio based on this metric remains conservative at about 76%.
That’s a healthy number. It means Plaza isn’t stretching itself to pay dividends. It leaves room for reinvestment and ensures the monthly payout doesn’t risk being cut at the first sign of trouble. And based on the REIT’s track record, that’s no surprise. Plaza has paid a monthly dividend for over a decade, increasing it gradually as earnings support it. In a world where many companies are slashing dividends to deal with economic uncertainty, consistency is king.
Looking ahead
Occupancy is another bright spot. As of Dec. 31, 2024, committed occupancy was a strong 97.6%. That’s a clear sign of stability. A high occupancy rate means fewer vacant units, stronger lease terms, and steady rental income. Plaza’s focus on essential services and discount retailers has helped it avoid the pitfalls that mall operators and luxury outlets have faced in recent years. People still go to the grocery store, pick up prescriptions, and grab items from the dollar store, and that keeps tenants in place.
But Plaza isn’t just sitting on its current portfolio. It’s still growing. In 2024, the dividend stock launched several development projects, including a major retail development in Welland, Ontario, which will feature over 100,000 square feet of leasable space. The anchor tenant? A 35,000-square-foot grocery store. That’s in line with Plaza’s strategy of anchoring developments with essential retailers — tenants that generate consistent foot traffic and remain in high demand.
Foolish takeaway
So, what’s the takeaway? If you’re looking for a dividend stock that pays you cash every single month, Plaza Retail REIT deserves a spot on your watchlist or even your portfolio. At a 7.51% yield, it offers better income potential than most guaranteed investment certificates or savings accounts, and you’re backed by a portfolio of real, physical assets. It’s a slow and steady approach, but for those focused on income and reliability, that can be exactly what you need.
