This TSX Dividend Stock Is Down 60% and Worth Holding for Decades

When Canadian stocks are down, the first question should not be “How far has it fallen?” but “What still works?”. A lower share price can be a real opportunity when the business still owns valuable assets, generates recurring cash flow, and has a credible plan to get through a rough patch. The danger comes when investors confuse a cheap price with a strong company. The sweet spot is a stock that looks bruised, not broken.

AP

Allied Properties REIT (TSX:AP.UN) fits that description better than the market is giving it credit for. It owns distinctive urban office and mixed-use properties in major Canadian cities, so this is not a generic office landlord story. Its portfolio has long been built around well-located workspace for knowledge-based tenants, and that has helped it stand apart from plain vanilla office real estate investment trusts (REIT).

Over the last year, though, the story has clearly shifted from easy growth to repair mode. In February 2026, Allied reported full-year results alongside a leadership update and a major equity financing. It also cut its monthly distribution to $0.06 per unit, or $0.72 annually, to preserve cash and support debt reduction. That is not the kind of news income investors celebrate, but it is the kind of move that can give a battered REIT a better shot at surviving and improving.

There were also some signs of life underneath the gloom. Allied said second-half 2025 leasing activity was its strongest second half since 2020, while sublease space dropped to 2.6% of gross leasable area from 5.7% a year earlier. It also completed the sale of nine non-core properties for $140 million in 2025 and said its remaining disposition pipeline was about $500 million, with some of that already closing in early 2026.

Into earnings

The earnings were messy, which is exactly why the units still look so cheap. In 2025, rental revenue held roughly steady at about $592 million, but operating income slipped to $317 million from $328 million. Allied also took a large $1.4 billion IFRS valuation adjustment and recorded a $128 million expected credit loss tied to two remaining loans receivable. That sounds ugly, and it is. But those numbers also reflect property revaluations and cleanup costs, not just the basic rent machine collapsing.

The more encouraging part is that the trust still expects to generate funds from operations in 2026. Management guided for annual funds from operations (FFO) of $185 million to $200 million and said it expects net debt to earnings before interest, taxes, depreciation and amortization (EBITDA) to finish 2026 in the mid-11 times range, with further improvement beyond that. This is not a quick turnaround story, but it is at least a visible one, and visibility matters a lot when a dividend stock has been under this much pressure.

Valuation is where the case starts to get interesting. Allied recently traded around $9.50, versus a 52-week high of $22.27, which means the units are down about 58%. At the new annualized payout of $0.72, the yield sits around 7.7%. That is still meaningful monthly income, but now with a much lower cash burden than before. The risk is obvious: office real estate remains under pressure, and Allied still has to prove the reset works. But if you believe well-located urban office and mixed-use assets will still matter over time, today’s price already bakes in a lot of bad news. Especially when you can create this much income from even $7,000.

Bottom line

Allied is not a no-drama forever dividend stock right now. It is a recovery play wearing a dividend-stock badge. But that can still make it worth holding for decades if you believe the assets, the tenant base, and the balance-sheet plan will eventually win out. The units are down hard, the monthly cash is still there, and management is finally acting with some urgency. Sometimes the best long-term buys are the ones that look the least comfortable in the moment.