In order to generate a reliable monthly income stream, investors need to pick companies that can deliver that income consistently. For many investors, monthly income plays a key role in building predictable cash flow. And while most stocks pay dividends on a quarterly basis, there are some that pay out monthly.
REITs stand out because many of them pay monthly and still offer competitive yields.
One option for investors to consider right now is RioCan Real Estate (TSX:REI.UN). And here’s why this could be the REIT for your portfolio.
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Inside RioCan’s business and portfolio
RioCan is one of Canada’s largest REITs, with a portfolio built around necessity‑based retail and mixed‑use properties. In recent years, the REIT has shifted its portfolio composition to include more of those mixed-use properties, and that’s where the opportunity lies for investors.
That’s because mixed-use properties cater to several of the most pressing issues on the market.
First, there’s the decline in commercial property traffic. RioCan has historically focused on commercial retail properties, but in recent years, traffic at many of those sites has dipped as consumer shopping habits have shifted to online channels.
Similarly, the demand for residential properties, particularly in Canada’s major metro markets has soared.
The solution is RioCan’s mixed-use properties, which comprise residential towers sitting atop several floors of retail. The properties are in high-demand metro markets along transit corridors, where foot traffic is important.
That mix helps the sites generate steady revenue from different sources, which adds a layer of stability and defensive appeal.
Finally, by diversifying its portfolio beyond traditional retail, RioCan aims to strengthen its cash‑flow profile and reduce reliance on any single property type.
How the monthly distribution holds up
One of the main reasons why investors often consider RioCan is for the company’s attractive monthly distribution. As of the time of writing, this works out to an attractive yield of 5.3%.
This makes RioCan one of the better-paying options on the market, and that steady payout helps to position RioCan as a popular choice among income investors.
More importantly, this means that investors who can drop $50,000 into the REIT (as part of a larger, diversified portfolio) will begin to generate a monthly income of just under $220.
Perhaps best of all is the fact that investors who aren’t ready to draw on that income yet can choose to reinvest it. This allows any eventual income to keep growing until needed.
For those investors with a longer timeline, a smaller $6,000 investment with distributions reinvested will generate a new share each month.
That makes RioCan a great buy-and-forget option for investors seeking that monthly income.
Start generating monthly income today
No stock is without risk, and that includes an otherwise defensive pick like RioCan. For anyone focused on generating monthly income, RioCan offers a balanced mix of yield and stability.
Fortunately, investors should note that RioCan’s distribution is well-covered. The REIT’s properties maintain high occupancy levels, driven by the strong demand for its necessity-based retail and the prime location of those residential units.
This makes RioCan a unique long-term pick for any well-diversified portfolio.
