We all have dreams that we keep putting off until retirement. Maybe you’ve imagined spending a few months somewhere warm, taking a long road trip, or finally having the freedom to spend your weekdays however you like. But the last thing anyone wants during retirement is to constantly worry about whether their savings will cover the next month’s bills.
That’s why you may want to consider building a portfolio that could generate income even after your regular paycheques stop. And monthly dividend stocks could help you achieve that because their payments arrive on a schedule that feels familiar. You could use that money toward everyday expenses or, if you’re still working, reinvest it to gradually accumulate more shares.
In this article, I’ll highlight a top Canadian monthly dividend payer and explain why it looks appealing for Canadians hoping to turn their retirement dreams into reality.
Granite REIT stock
If you’re looking to build a steady monthly income stream for retirement, Granite Real Estate Investment Trust (TSX: GRT.UN) could be an attractive stock to buy.
This Canadian real estate investment trust (REIT) mainly focuses on acquiring, owning, and managing industrial and logistics properties across North America and Europe. Its portfolio currently includes about 147 investment properties covering 62.6 million square feet of leasable space. These properties primarily serve businesses involved in warehousing, e-commerce, distribution, and industrial manufacturing.
What makes Granite REIT even more interesting for retirement investors is its diversified property portfolio. Instead of depending on a single property or geographic market, the trust has exposure to different industrial activities across multiple regions, which could support its long-term income potential.
Despite these strengths, Granite REIT hasn’t been able to deliver impressive returns of late. Its units have slipped nearly 7% over the last six months. As a result, the REIT currently trades at $84.30 per unit with a market cap of $5.2 billion. At this market price, it offers an attractive 4.2% annualized dividend yield, with distributions paid every month.
Granite REIT’s recent financial performance
Despite the weakness in its stock, Granite REIT is continuing to deliver strong results, making it look undervalued. In the second quarter, the REIT’s revenue rose 10.6% year-over-year (YoY) to about $165 million. Its net operating income climbed 9.7% YoY, helped by new and renewed leases in Canada and the United States, rent increases, and acquisitions, despite some property sales.
More importantly for retirement investors, the company’s funds from operations (FFO) climbed 11.5% YoY. Meanwhile, its adjusted funds from operations also inched up nearly 3% to $77.3 million. With an adjusted funds from operations payout ratio of 70%, the trust’s monthly distributions were well covered by this measure.
Why its long-term income prospects look promising
Granite REIT’s consistently high occupancy rate adds to its appeal for investors looking to generate regular monthly income. Its in-place occupancy reached 98% in June, up 2.2 percentage points from a year ago. The trust also signed new and renewed leases at average rents 7% above expiring rates during the quarter, while fully leasing a Tennessee business park.
With solid occupancy, growing property income, and monthly distributions, Granite REIT could be an attractive addition to a retirement income portfolio. While its payouts aren’t guaranteed, these strong operating trends make this 4.2% yielder worth considering for the long term.