The Toronto Stock Exchange continues to trend skyward, rising +6.87% in the last 30 days. As of May 9, 2025, Canada’s primary stock market is up +2.55% year to date. The S&P 500 Index on Wall Street is losing -3.8% year to date. Several TSX stocks are profitable options, including a dividend knight.
CT Real Estate Investment Trust (TSX: CRT.UN), an owner and operator of high-quality real estate properties, is a smart buy right now. At $15.28 per share, the REIT outperforms thus far in 2025 with +9.25%. Given its 6.21% dividend yield and monthly payout frequency, an $800 investment will generate $49.68 in passive income or $4.14% monthly.
This dividend knight has a market cap of $3.62 billion and boasts a 12-year dividend-growth streak. Market analysts maintain a positive outlook for Canadian REITs. The economy is stabilizing, with possibly one more rate cut by the Bank of Canada this year. They also expect a resurgence in commercial real estate transaction activity.
CT REIT’s competitive advantage is its long-standing association with Canada Tire Corporation, its anchor tenant and controlling unitholder (68.3% ownership stake).
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Latest quarterly earnings
“Our solid portfolio continues to provide a steady and growing base that underpins our ability to deliver reliable and durable results, even in these challenging macroeconomic times,” said Kevin Salsberg, CT REIT president and CEO of CT REIT.
In the first quarter (Q1) of 2025 (three months ending March 31, 2025), property revenue and net operating income (NOI) increased 4.3% and 4.6% year over year to $150.4 million and $118.7 million. Net income rose 4.5% to $105.7 million versus Q1 2024. The portfolio consists of retail (369), industrial (5), and mixed-use commercial (1) properties, with two under development.
CT REIT derives 44.6% of base minimum rent from income-producing properties in Canada’s six largest urban markets. The Canadian Tire leases have a 1.5% average annual rent escalation clause. At the quarter’s end, the portfolio’s weighted average lease term (WALT) is 7.5 years. The REIT’s occupancy rate is 99.5%.
According to Salsberg, CT REIT endured a global pandemic, increased volatility due to rising interest rates, and tariff uncertainty of late. “CT REIT has managed to consistently deliver strong growth in earnings, increase its distributions on an annual basis and maintain its strong balance sheet and credit metrics,” he added.
On dividend payments, Salsberg said, “A unitholder who has been with us since initial public offering has enjoyed a 45.9% cumulative increase in distributions paid since that time, which represents a 3.3% compound annual growth rate, a track record that we are very proud of.”
Investment takeaways
The top-tier REIT invests primarily in net-lease single-tenant retail properties. They can create long-term unitholder value and generate durable and growing monthly distributions. Management will focus on expanding the asset base. The WALT and contractual rent escalations from Canadian Tire leases assure future growth. Add the 20 projects at various stages of development in the pipeline. About half will be completed in 2025, and the rest will be completed in 2026 and beyond.
CT REIT is a strong buy for risk-averse and income-oriented investors. The strong performance metrics, predictable rent hikes, and primary growth drivers are compelling reasons to invest.
