Does your portfolio have a monthly dividend giant that provides an ongoing, stable source of income? Finding a monthly dividend stock that pays out consistently can make all the difference in your portfolio.
Traditionally, a monthly passive income investment has been associated with owning real estate. Unfortunately, home prices and stubborn interest rates have priced out would-be landlords from the market.
This is where owning a stock like RioCan Real Estate (TSX: REI.UN) can be a lucrative way to invest in a monthly dividend giant and earn that passive income.
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Meet RioCan Real Estate
RioCan is one of the largest real estate investment trusts (REITs) in Canada. The company operates a portfolio of nearly 190 properties that are located across the major metro markets of Canada.
Historically, RioCan’s portfolio has comprised mainly commercial retail sites, but this has changed in recent years. Specifically, RioCan has added a greater mix of mixed-use residential properties.
These properties further diversify RioCan’s portfolio, offsetting a decline in demand for traditional brick-and-mortar retail. The properties are also located in high-demand areas in metro markets within transit corridors.
This not only caters to the lack of housing, but also provides would-be landlords with a means to build a passive-income stream without taking on a huge mortgage.
RioCan is a monthly dividend giant
One of the main reasons why investors continue to flock to RioCan is for the company’s monthly distribution. As of the time of writing, RioCan offers a tasty monthly distribution with a yield of 6.46%.
For income-seeking investors looking for a monthly dividend giant, that income could be substantial. By way of example, a $35,000 investment into RioCan will provide investors with a monthly income of just under $190.
Investors considering RioCan should take note of several important considerations regarding that income potential.
First, that income comes without the need to pay a mortgage, property tax bill or undergo maintenance. Rather, it can be considered clear income from that investment, akin to a landlord collecting rent on a paid-off property. If that investment is purchased from within a Tax-Free Savings Account (TFSA), it will also be considered tax-free income.
Next, it’s also worth noting that an investment in this monthly dividend giant is significantly lower risk than owning a single property. That’s because investing in RioCan spreads the risk outside of a single property to potentially hundreds of units in multiple markets.
Finally, we have growth. A monthly income from owning a REIT is great, but for those investors not ready to draw on that income, there’s one more gem to note. Reinvesting that monthly income can provide an automated way to grow that income over a longer period of time.
Invest in this monthly dividend giant
No stock is without risk, and that includes companies like RioCan that boast massive defensive moats. Fortunately, RioCan offers investors a diversified way to invest in real estate and generate a monthly income stream.
In my opinion, RioCan is a great option to include in any well-diversified portfolio.
