The Canadian REITs on our list are poised to become stellar long-term performers
SmallCapPower | June 25, 2020: REITs have been viewed as attractive for investors seeking income, as their yields tend to be higher than most other dividend-paying stocks. The Canadian REITs we’ve rounded up should be superior long-term performers, according to a recent report from CIBC World Markets, based on historic high increases in net asset values, funds from operations, as well as above-average dividend growth.
*Returns are based on closing stock prices as of June 24, 2020
Summit Industrial Income REIT (TSX:SMU.UN) – $11.12
Summit Industrial is focused on growing and managing a portfolio of light industrial properties across Canada. During 2019, the Company generated a 54% increase in revenue, a 54% improvement in funds from operations, and a 4.7% rise in monthly distributions. Summit also acquired a total of 42 properties last year, adding 4.2 million square feet to its portfolio. As of May 31, 2020, the REIT had collected about 90.2% of total May rents, with a further 5.0% of tenants given a rent deferral. SMU.UN has a current dividend yield of about 4.8%.
- Five-Year Return: 157% (Excluding dividends)
Canadian Apartment Properties Real Estate Investment Trust
(TSX:CAR.UN) – $48.26
Canadian Apartment Properties Real Estate Investment Trust (CAPREIT) is one of Canada’s largest residential landlords. CAPREIT is a growth-oriented investment trust owning interests in approximately 63,478 suites and sites across Canada, the Netherlands and Ireland. It owns, directly in Canada and indirectly in Netherlands through its investment in European Residential Real Estate Investment Trust (ERES), a total of 59,844 residential units, comprising 48,167 residential suites and 72 manufactured home communities comprising 11,677 sites located in and near urban centers. Despite concerns about tenants not being able to pay rent due to COVID-19 related job losses, people will always need a roof over their head. CAPREIT was added recently the S&P/TSX 60 Composite Index, which should boost its liquidity. CAR.UN has a current dividend yield of about 2.8%.
- Five-Year Return: 105% (Excluding dividends)
Granite Real Estate Investment Trust (TSX:GRT.UN) – $67.16
Granite Real Estate Investment Trust is a Canada-based REIT engaged in the acquisition, development, ownership, and management of industrial, warehouse, and logistics properties in North America and Europe. Granite owns over 90 investment properties representing approximately 40.3 million square feet of leasable area. On June 9, 2020, the Company announced that it had agreed to acquire eight income-producing properties in the United States comprising approximately 4.0 million square feet at a combined purchase price of about C$332 million. GRT.UN has a current dividend yield of 4.3%.
Disclosure: Neither the author nor his family own shares in any of the companies mentioned above.
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