Finding the right dividend growth stock can make all the difference in building reliable long-term income. With $4,100 to invest today, one of the smartest choices on the TSX is Granite Real Estate Investment Trust (TSX:GRT.UN). This REIT combines a stable income stream, a track record of dividend growth, and strong fundamentals that position it well for the years ahead.
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The stock
Granite REIT is not your average landlord. It owns and manages a portfolio of high-quality industrial, logistics, and warehouse properties. As of early 2025, it holds 143 properties spanning over 63 million square feet of gross leasable area. These aren’t just any warehouses. Its tenants include some of the biggest and most reliable names in global commerce. These long-term leases and dependable tenants give Granite steady rental income, which it shares with unitholders through monthly dividends.
Those dividends are a major reason investors gravitate toward GRT.UN. Right now, it pays $0.2833 per unit each month, or about $3.40 annually. Based on the current unit price of around $67.35, that works out to a yield of roughly 5%. This yield alone is attractive, but what really makes Granite stand out is its record of dividend growth. It has raised its payout annually for over a decade, showing that management prioritizes rewarding investors while keeping the business financially healthy.
Into earnings
The latest earnings show just how well that strategy is working. In the first quarter of 2025, Granite reported net operating income of $125.7 million, up from $114.5 million a year earlier. Its funds from operations (FFO), a key measure for REITs, rose to $91 million, or $1.46 per unit. Adjusted funds from operations (AFFO) came in at $88.4 million, or $1.41 per unit. The AFFO payout ratio, a key indicator of how sustainable the dividend is, was a conservative 60%. That means the trust is paying out only 60% of its available cash to unitholders, leaving room for future increases and reinvestment in the business.
Granite’s balance sheet is also in excellent shape. It reported $123.1 million in cash and cash equivalents, and its net leverage ratio sits at 32%. That’s a low level of debt for a real estate company, giving Granite the flexibility to take on new projects or acquisitions without putting its dividend at risk. It also means the trust is better positioned to handle any economic shocks or rising interest rates.
Diverse value
Another reason to like Granite is its portfolio mix. About 40% of its properties are in Canada, with the rest spread across the United States and Europe, particularly Germany and the Netherlands. This geographical diversity helps reduce risk if one market underperforms. It also gives Granite access to growing e-commerce and logistics hubs outside of Canada. As the demand for last-mile delivery and regional distribution grows, so does the value of the trust’s real estate footprint.
And while many companies talk about creating shareholder value, Granite backs it up with action. In the first quarter (Q1) of 2025, it repurchased 930,969 units at an average price of $68.30 under its normal course issuer bid. Buybacks like this show that management believes the units are undervalued and are taking concrete steps to support the stock price. At the same time, buybacks reduce the number of units outstanding, which can increase earnings and AFFO per unit over time, another plus for investors.
Bottom line
Granite is one of those rare REITs that offers both stability and growth. The yield is generous, the payout is sustainable, and the company has room to grow both earnings and distributions over time. For investors with $4,100 ready to invest, it’s an ideal stock to buy and hold. Whether you’re planning to reinvest the dividends or use them for income, Granite offers the kind of long-term reliability that helps build real wealth.
