Canadian real estate investment trusts (REIT) are some of the top choices when looking for a dividend stock. Not only do these companies regularly pay out dividends, they have to. REITs in Canada are obliged to pay out 90% of all payable earnings to shareholders, and that’s usually in the form of dividends. So it’s no wonder these are favourites in the income crowd.
But that does depend on one thing: earnings. If these companies aren’t earning enough, those dividends will be cut. Which is why today we’re looking at a dividend stock that not only supports its dividend well, it’s likely to do so for decades to come. So let’s look at why Choice Properties REIT (TSX: CHP.UN) could belong in your portfolio.
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The numbers
First, let’s look at what’s been going on with the dividend stock recently. Choice REIT reported a strong second quarter for 2025. The REIT reported rental revenue hitting $350.8 million, up from $335.4 million from the same period last year. The trust also saw a 3.9% increase in funds from operations (FFO) per unit, so there’s strong cash to continue supporting that dividend.
However, it wasn’t all perfection. The dividend stock also reported a net loss of $154.2 million for the second quarter. This mainly came from a $736.2 million unfavourable change in the fair value of its exchangeable units. This comes from the rise of its unit prices. So it’s not as though the company was performing poorly.
In fact, far from it. Not only did the company see a rise in FFO and rent, it also maintained a strong occupancy rate. This was across its retail, industrial and residential portfolios, hitting 97.8%! And with $427 million in completed real estate transactions for the quarter to bolster that portfolio, especially in the industrial space, the dividend stock doesn’t look as though it’s slowing down.
Earning income
Alright, so we have a stable REIT that’s growing, not just in retail but in the industrial space. It holds stable cash flow, and performance continues to be strong. So what should investors watch in the future if they’re considering this dividend stock?
First off, there’s debt. The company holds a high debt-to-equity ratio (D/E), currently at 281%. That’s a concern, especially in a higher interest rate environment with a stall in rate cuts. Furthermore, its high leverage and refinancing will need to be managed properly. And as a REIT, its performance is tied to economic conditions that affect the real estate value, as we’ve seen.
But there’s also the value side. Right now, the dividend stock holds a yield at 5.3%, which of course is quite high. Furthermore, its payout ratio is at 101% at writing, so there’s limited room for an increase until earnings improve.
Still, for value investors getting in now, a $7,000 investment could provide annual income of $366. That’s certainly worth considering, especially while trading with a forward price-to-earnings (P/E) ratio of about 15.
| COMPANY | RECENT PRICE | NUMBER OF SHARES | DIVIDEND | TOTAL PAYOUT | FREQUENCY | TOTAL INVESTMENT |
|---|---|---|---|---|---|---|
| CHP.UN | $14.69 | 476 | $0.77 | $366.52 | Monthly | $6,992.44 |
Bottom line
If you’re an investor looking to make some cash on the side, then this dividend stock is at the very least worth considering. It offers dividends that come out monthly, and even in a higher interest rate environment it manages to remain strong amidst some fairly volatile situations. As it continues to maintain high occupancy, expand into industrial properties, and complete strategic acquisitions, this is one dividend stock to keep on your radar.
