Housing accident: 2 security REITs


If there is one type of stock Canadians desperately need right now, it is dividend stocks. With this in mind, one of the best types of dividends is the Real Estate Investment Trust (REIT). REITs must distribute 90% of the company’s profits in the form of dividends. It is therefore a safe bet that you will receive high dividend yields from these companies.

However, property management is going through a difficult period, with all the other industries currently. The housing market is already plunging and a crash may occur in the near future. But there are REITs that you can still safely buy in bulk and bring in cash much sooner than later.

WPT Industrial REIT

There are many REITs that manage housing properties. WPT Industrial REIT (TSX: WIR.U) is not one of them. This company owns and operates more than 70 light industrial properties and acquires more and more of them regularly. Why? Because light industrial properties are exactly the type required for e-commerce.

As e-commerce continues to explode, WPT Industrial will reap the full benefits. E-commerce will take off in the stratosphere as the world searches for online sources of everything from food to medicine. The company provides distribution centers for e-tailers to store and ship products. With an occupancy rate of 99% right now, the stock is not feeling the love it deserves. Instead, it is integrated with other REITs. But if you’re an investor looking for a solid long-term hold, it’s not much better.

At the time of writing, the shares are trading at $ 10.75 with a fair value of $ 14.20. That’s a 33% upside potential! And with a dividend yield of 7.11%, that means investing half of your tax-free savings account (TFSA) in this REIT would pay $ 2,457.08 a year in dividends.

Choice Properties

If there is one type of REIT that could do better than ever, it is those who are involved in the grocery industry. Stocks in grocery businesses have skyrocketed, which now represents a great opportunity for grocery REITs as well. Including REIT Choice Properties (TSX: CHP.UN), the trust that operates companies such as Loblaw Co.

Choice owns a whopping 726 properties, including retail, industrial, office and residential. However, the bulk of the portfolio is tied to grocery real estate like Loblaw. This particular company has seen solid returns even in today’s market. In addition, Choice has created residential and commercial space on top of the existing Loblaw properties. This means that the business can generate even more revenue as the occupancy rate increases.

As for the stock itself, Choice is trading at $ 13.34 at the time of writing. The stock has already bottomed out after losing 30% from peak to bottom after the crash, and now has upside potential of 7%. It’s not as important as WPT Industrial, but it certainly has the ability to stay long-term for those looking to buy and keep. Then there is the company’s stable dividend yield of 5.33%. Investing half of your TFSA in this security today would pay $ 1,927.70 a year in dividends.

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Mad contributor Amy Legate-Wolfe has no position on any of the titles mentioned.


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