Dividend stocks can be a dream come true. They offer investors a chance to get in on the action without worrying about the ups and downs of the market. As long as you choose the right dividend stock, you can look forward to years and even decades of passive income.
Yet what if you went a step further and picked up a dividend stock paying out monthly? Here, you’re likely to turn to real estate investment trusts (REIT). And if you want safety, Dream Industrial REIT (TSX:DIR.UN) belongs on your hit list.
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Why DIR
First, let’s get right into that dividend yield. Currently, DIR offers a $0.70 annual dividend, coming to about $0.058 each month and a yield of 5.6% at writing. When it comes to coverage of that dividend, DIR looks solid. During the second quarter of 2025, its funds from operations (FFO) were just 68.7%. That’s a comfortable cushion for the dividend, and well below the 90% levels that signal risk.
The second quarter saw further cash flow drivers. This included net operating income (NOI) rising by 5%, and FFO per unit increasing by 4%. Rent spreads on renewals average over 20%, with Ontario and Quebec seeing double-digit gains. This performance demonstrated strength for sustaining and even growing the dividend payout.
Staying strong
The dividend is covered, but there also has to be signs of strength from the balance sheet to demonstrate lower risk from this investment. In this case, again, we’re looking solid. DIR held committed occupancy of 96%, with in-place occupancy at 94.1%. Net debt over total assets also held at 38%, which was moderate. Furthermore, 84% of DIR’s assets remain unencumbered, giving it flexibility for whatever comes its way.
The dividend stock also managed to hold $900 million in pro forma liquidity. Currently, over 70% of 2025 maturities have already been addressed and recent bond issuances were lowered. All considered, the dividend stock has a healthy cushion while being able to grow further.
Looking ahead
Speaking of growth, the dividend stock still looks valuable given its outlook. It currently trades at just 0.8 times book value, suggesting investors are getting assets at a steal. And if sentiment improves, that share price upside could add even more to this income story, especially given future growth.
That growth includes recent deals in the north of the Greater Toronto Area (GTA), plus the Netherlands. These offer attractive yields of between 6% and 10%. Plus, its solar repowering projects are now generating over 20% returns on cost, adding to NOI. With such a diverse portfolio, there is now inflation protection as well as growth.
Bottom line
If you’re looking for income, DIR is a safe and stable dividend stock trading at a discount. In fact, an investment right now of $7,000 would bring in an annual income of $393.
| COMPANY | RECENT PRICE | NUMBER OF SHARES | DIVIDEND | TOTAL PAYOUT | FREQUENCY | TOTAL INVESTMENT |
|---|---|---|---|---|---|---|
| DIR.UN | $12.44 | 562 | $0.70 | $393 | Monthly | $6,993 |
This monthly dividend stock has a lot of potential. Whether it’s the income, growth, or stability, it’s all comfortably covered. Overall, it’s a high quality, discounted industrial REIT that can deliver steady monthly income for years, if not decades.
