This Canadian Stock Could Replace Your Side Hustle

Investing in Canadian stocks can be a perfect alternative to a side hustle. One thing many people don’t have these days is spare time. Owning an investment property often requires more time and effort than people recognize (not to mention it requires a large capital investment).

Likewise, driving an Uber or freelancing after work can mean busy afternoons or late nights that take you away from your family and friends. While investing does require capital, you can tailor your portfolio to your circumstances and level of risk.

New commission-free investment platforms make investing more attainable than ever. While no investment is likely to immediately replace a side hustle, with time you can build a portfolio that could.

This REIT could eventually replace your side hustle

Granite Real Estate Investment Trust (TSX: GRT.UN) is an attractive Canadian stock that could help you replace a side job. It pays monthly income and requires almost no time or energy to earn that income.

Granite stock has a market cap of $5 billion. It owns and operates a portfolio of 139 logistics, industrial, warehousing, and manufacturing facilities.

Most of these are institutional quality properties that suit modern distribution and e-commerce applications. These are in robust real estate markets in Canada, the United States, Europe, and recently, the United Kingdom.

A top REIT stock with great long-term fundamentals

Granite is one of the highest-quality real estate investment trust (REIT) stocks in Canada. Its properties are leased to high-end tenants like Magna, Amazon.com, and Wayfair. Occupancy sits over 98%, and its average lease term is over five years. It just means its monthly rents are very secure and predictable.

Granite has grown its adjusted funds from operations (AFFO) per unit (a core cash flow metric for REITs) by an 8% compounded annual growth rate (CAGR) over the past five years.

At the same time, its distribution payout ratio has declined from 77% to 63%. Even after growing its distribution for 15 consecutive years, Granite still generates over $100 million of excess cash per year. With only 37% net debt to capital, the company has a very modest leverage profile.

Consequently, it has been opportunistic with share buybacks when its stock price is low. Similarly, when its stock price is high, Granite can use its stock as currency to acquire accretive properties. Modest leverage allows for smart capital allocation in any economic environment.

Here’s how much you would need to replace a side hustle

After a recent pullback, Granite’s stock is yielding 4.3% today. If you had $25,000, you could buy 301 units at today’s price of $83. That investment would earn $89.05 monthly. If you had $150,000 to invest in Granite, you could earn a monthly yield closer to $535.

That’s a pretty large number. It might be a level that is aspirational for many. Yet, the point is to start saving and investing early. If you have a side hustle, take a percentage of your extra income to invest in quality stocks like Granite REIT.

As your portfolio gets larger, your investment income will grow. The more it grows, the less you will need to rely on side jobs. If you pick smartly, the dividend income will also compound over time. As a result, you get the double whammy of a rising stock value and a rising income stream.