There’s no shortage of great investments on the market, many of which can provide a growing source of income. Even better is when those investments can provide a dividend every single month that can cover a bill or two.
One great investment that provides a dividend every single month that is worth considering right now is RioCan Real Estate (TSX: REI.UN). Here’s a look at why this is the stock that belongs in your portfolio today.
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Let’s start with RioCan’s business
RioCan is one of Canada’s larger REITs. The company manages a portfolio of mainly commercial retail properties across metro markets across Canada. Many of those retail sites are essential retail, meaning that they provide some defensive appeal to the company.
That also means that RioCan is able to draw in recurring traffic numbers to its sites, which in turn results in strong results and that monthly dividend.
In fact, in the most recent quarterly update, RioCan reported that committed retail occupancy reached 98.8%. Additionally, the company reported a blended leasing spread of 23.1% during the quarter. That figure shows that rents on the new and renewed leases were higher than the leases that they were replacing.
RioCan’s core funds from operations payout ratio was 73.8% over the trailing 12 months from the second quarter. This means that RioCan paid out less than it generated on that measure, leaving some room to fund its other needs.
Another key part to consider is RioCan’s growing residential business. In recent years, RioCan has developed a portfolio of mixed-use residential sites.
These locations comprise residential towers that sit atop several floors of retail. The properties are located in major metro markets along transit corridors. This means that the properties are in high-demand areas and generate high foot traffic for the businesses in the area.
RioCan pays a dividend every single month
One of the main appeals of RioCan is the monthly dividend. As of the time of writing, the distribution works out to an impressive 5.6%. For prospective investors who can drop $30,000 into RioCan as part of a larger portfolio, that works out to a dividend every single month of approximately $140 per month.
For those investors who aren’t ready to draw on that income yet, that monthly distribution can be reinvested to generate a half-dozen new shares each month. Over time, that can grow into a much larger monthly income stream.
That payment could also cover a phone bill or two. If your monthly cell phone bill comes in at around $70 per month, that is more than covered by that monthly income stream. Investors still have enough in that monthly dividend to reinvest in several new shares as well.
Could RioCan cover your phone bill?
Based on RioCan’s current payout, that investment can cover a $70 phone bill. Even better, investors don’t need that full $30,000 investment from the example above to make that happen. Given the current yield, an investment of approximately $15,000 would be more than enough to cover that monthly phone bill.
For an investor looking to build monthly income, RioCan offers a clear way to connect an investment with an everyday expense.
In my opinion, RioCan is a great long-term option that should be a core holding in any well-diversified portfolio, regardless of whether it’s used for generating a recurring income stream or paying your monthly phone bill.
