1 Magnificent Monthly Dividend Stock Down 7% to Buy and Hold Forever

This monthly dividend producer is a growing winner for dividend portfolios.

Amy Legate-Wolfe

Amy became interested in investing in 2018 after having her first daughter. After receiving a masters degree in journalism from Western University, she became frustrated that the finance industry remained a confusing place for Canadians like her: new parents, millennials, and other young people who needed to understand their finances. Now, Amy focuses on tech companies and renewable energy for growth opportunities, coupling that with long-term investing strategies and equities. She also provides investors with a daily newsletter, Canada Stock Digest, for daily market updates. Before joining Motley Fool Canada, she wrote for major news organizations including HuffPost, CTVNews.ca, and CBC. When she’s not researching investing strategies, Amy’s time is pretty much monopolized by her two wild daughters, but in what little spare time she has she loves to do yoga, go on walks with her dog, and travel with her husband. Follow Amy on LinkedIn and Canada Stock Digest. Favorite Investment Quote: “October: This is one of the particularly dangerous months to speculate in stocks. The others are July, January, September, April, November, May, March, June, December, August and February.” – Mark Twain

Published May 28, 2025 4:40 pm EDT

| More on: SRU.UN

In a market full of noise and volatility, there’s something incredibly comforting about holding a stock that just pays you, like clockwork, every single month. That’s exactly what you get with SmartCentres Real Estate Investment Trust (TSX:SRU.UN). It may not have the flash and dazzle of a high-flying tech stock, but what it does offer is reliability, income, and resilience, traits that become more valuable the longer you invest.

The stock

SmartCentres REIT is one of the largest fully integrated real estate investment trusts in Canada. It focuses on value-oriented retail real estate. As of its most recent report, SmartCentres owns and manages 196 strategically located properties across Canada, totalling over 35 million square feet of retail space. These aren’t trendy niche shops, either. Nearly all its properties anchor to essential service tenants, with Walmart Canada being its largest. In fact, Walmart anchors about 115 of its properties. That’s important because it means SmartCentres is tied to stable, long-term leases with companies that Canadians rely on every day, no matter the state of the economy.

As of writing, the stock is trading around $25.50, which is still down from its 52-week highs. This makes it especially attractive for long-term investors who want both income and capital appreciation. Although the stock has climbed 12% over the past year, it still appears undervalued based on its earnings and asset holdings.

Income now

Speaking of income, let’s talk dividends. SmartCentres is one of the few Canadian REITs that pays a dividend monthly. That dividend currently sits at $0.1542 per unit, giving it an annual yield of about 7.3%. That’s a juicy payout, especially when you consider that this yield is backed by predictable rental income from strong tenants. The trust maintains a payout ratio of about 64%, which is healthy and suggests the dividend is sustainable going forward.

In its most recent earnings report, SmartCentres posted revenue of $970 million and net income of $246 million for the trailing 12 months. Its gross margin came in above 61%, and its occupancy rate across all properties remained very high at 98.4%. That’s especially impressive in the current retail environment, where many landlords are struggling with vacancies. However, because SmartCentres focuses on tenants such as grocery stores, pharmacies, banks, and other essential service providers, it continues to thrive even when other retail landlords falter.

More to come

SmartCentres is not standing still, either. The REIT has been actively redeveloping portions of its portfolio into mixed-use properties. These new developments include residential units, seniors’ residences, self-storage facilities, and even hotels. These additions provide diversification and help reduce reliance on retail. The trust is also pursuing large-scale urban redevelopment projects under its SmartLiving banner, including the massive Vaughan Metropolitan Centre, a multi-phase mixed-use development just north of Toronto.

Another reason to consider SmartCentres is its conservative balance sheet. With a debt-to-equity ratio of about 81.5%, the REIT is prudently financed. It has also managed to refinance its debt at relatively low rates and has no significant near-term maturities. This financial flexibility allows it to continue growing through development and acquisition without putting the dividend at risk.

Bottom line

Investors often overlook REITs like SmartCentres in favour of “growthier” options, but that can be a mistake. Monthly dividend payers that also have long-term growth potential are hard to come by. SmartCentres checks both boxes. You get immediate income every month, and over time, there’s potential for capital gains as it develops new properties and increases rents.

So, if you’re looking for a stock to help you build consistent monthly income while also giving you a shot at long-term growth, SmartCentres might be the one. It offers a rare mix of reliability, scale, and upside that’s tough to beat—especially when the broader market feels unpredictable. For patient investors who like the idea of getting paid every month, SmartCentres REIT is one magnificent stock to buy and hold forever.