Happy Thanksgiving Day, Canadians! Our American neighbours will be celebrating Thanksgiving on November 25. This is due to Thanksgiving was originally set for celebrating good harvest and since Canada is more up north, Canadian farmers would harvest sooner.
While enjoying stuffed turkeys, it’s a good time to reflect on things we’re grateful about. In terms of dividend stocks, I’m thankful to have the following holdings in my portfolio. I also want to thank you for reading this blog. :3
I used to trade in and out of stocks, looking for quick profits. More recently, I was able to refrain from selling my Fortis (TSX:FTS)(NYSE:FTS) stock even though I knew it was fully valued at the time. The thing about investing is there’s no absolute right or wrong answer. The path is only clear in hindsight.
I remember last time I traded out of Fortis stock, it did pull back. But eventually, it worked its way steadily higher. That’s the type of business it is. If you’re looking for a dividend stock that will increase its dividend year after year, Fortis is a solid pick, as a regulated utility that earns stable and predictable returns.
I’m thankful that Fortis stock remains a part of my dividend portfolio. And if it becomes cheap enough again, I’ll pick some more shares up if I have excess cash. It’s the kind of dividend stock that doesn’t require much monitoring.
A Diversified REIT for income
Many investors may have missed Canadian Net REIT (TSXV:NET.UN) because it’s small and trades on the TSX Venture Exchange. The diversified real estate investment trust (REIT) has a market cap of approximately $155 million. However, it doesn’t affect its ability to pay a safe and growing cash distribution.
In fact, may be it’s because it’s overlooked that the dividend stock is relatively cheap right now. At $7.70 per share at writing, it trades at a blended P/FFO of roughly 13.5, while it has been able to grow at a double-digit rate
Canadian Net REIT enjoys a solid cash flow stream from its triple-net and management-free leases. Essentially, because of this business model, it saves tonnes of variable and management costs. This allows for faster translation of revenues into cash distributions. The dividend stock’s nine-year dividend growth rate is 10.2%, which is certainly above average.
Because it has low trading volumes, interested investors should aim to buy on a down day and set a limit order, so that there won’t be surprises in the price you’re paying. Currently, it yields close to 3.9%. My gratitude goes to the Canadian Net REIT management team for making this unique and solid passive income investment available to the public.
I’m also grateful about this REIT
I’m grateful that as a Canadian investor, I can easily invest in U.S. stocks like this healthcare REIT. Medical Properties Trust (NYSE:MPW) focuses on a portfolio of hospitals using an absolute or triple net lease model, which allow it to pass a lot of the costs, such as maintenance, and taxes, to its tenants, while earning a long-term inflation-indexed stream of cash flow. Its weighted average lease term is about 15 years.
MPW has about 446 properties across nine countries across 51 operators and roughly 47,000 beds. The largest property make up no more than 2.6% of the total portfolio (as a percentage of gross assets).
Here’s a snippet of the Medical Properties Trust’s recent portfolio by country.
The dividend stock is undervalued and provides a yield of close to 5.7%. I expect MPW stock to have the room to grow its dividend at a modest pace. So, it’s a good consideration for investors seeking current income in a quality name.
What are you grateful about this Thanksgiving?
If you like what you've just read, consider subscribing via the "Subscribe Here" form at the top right so that you will receive an email notification when I publish a new article.Disclosure: As of writing, we own shares of FTS, NET.UN, and MPW.
Disclaimer: I am not a certified financial advisor. This article is for educational purposes, so consult a financial advisor and or tax professional if necessary before making any investment decisions.
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