3 TSX-Beating REITs I'd Buy Right Now

3 TSX-Beating REITs I’d Buy Right Now

These three REITs provide stellar dividends along with TSX-beating growth over the last year, and there’s likely even more growth coming down the line.

Amy Legate-Wolfe ❯

@amylegatewolfe

Amy became interested in investing in 2018 after having her first daughter. After receiving a masters degree in journalism from Western University, she became frustrated that the finance industry remained a confusing place for Canadians like her: new parents, millennials, and other young people who needed to understand their finances. Now, Amy focuses on tech companies and renewable energy for growth opportunities, coupling that with long-term investing strategies and equities. She also provides investors with a daily newsletter, Canada Stock Digest, for daily market updates. Before joining Motley Fool Canada, she wrote for major news organizations including HuffPost, CTVNews.ca, and CBC. When she’s not researching investing strategies, Amy’s time is pretty much monopolized by her two wild daughters, but in what little spare time she has she loves to do yoga, go on walks with her dog, and travel with her husband. Follow Amy on LinkedIn and Canada Stock Digest.

Published April 30, 2022 3:00 pm EDT

The S&P/TSX Composite Index is just now starting to show signs it may be able to recover. This comes after a huge fall of up to 6% over the last month, and the index is now down 4% at writing. It’s due to a variety of reasons. There’s the continuing war in Ukraine. There’s the surge in COVID-19 cases in China causing lockdowns. And this is in addition to inflation, interest rates rising, and more.

So, it’s clear why Motley Fool investors may want to consider real estate investment trusts (REIT) right now. These provide dividends you can look forward to each quarter and even each month. But don’t give up on growth!

In fact, these three REITs have been beating the TSX lately and should keep doing so in the future. Let’s dig into why.

Slate Grocery REIT

Whereas the TSX is down about 1% year to date, Slate Grocery REIT (TSX:SGR.UN) is up 10%, even after falling about 5% in the last month. It owns and operates a $1.3 billion portfolio of grocery chains across the United States. These essential services proved to perform well, even during the pandemic, and have only improved with fewer restrictions.

That TSX-beating growth is impressive, as is its dividend of 6.8% as of writing. And that dividend was just reaffirmed by management, given out on a monthly basis. Furthermore, you can pick up the stock for a steal while it trades at 9.51 times earnings and 1.51 times book value.

Given that grocery chains continue to be a solid place to combat inflation and pandemic waves, this is a solid choice for investors to choose today.

Dream Industrial REIT

Dream Industrial REIT (TSX:DIR.UN) is another strong performer over the last year. Shares are up 13% in the last year, though down over the last month. Still, to me this still beats the 9% growth from the TSX over the last year.

There is still a lot of opportunity to unlock with Dream REIT, as the company continues to bolster its industrial property portfolio. In fact, it recently grew this portfolio through a $1.5 billion joint venture in the Greater Toronto Area. Plus, it reaffirmed its dividend, where investors can now lock in a yield of 4.41%.

The stock is a steal trading at 5.62 times earnings and 1.13 times book value. And again, with industrial properties needed more and more, it’s a solid long-term buy for investors today.

Choice Properties REIT

Choice Properties REIT (TSX:CHP.UN) is the last I would consider, thanks to its transition away from office properties and towards industrial, residential, and mixed-use properties. Its recent earnings were impressive, showing even more growth could be coming down its pipeline.

Shares rose slightly after earnings from this positive momentum, yet the company is still valuable trading at 1.53 times book value. And while shares are up 9% in the last year, similar to the TSX, those shares have also been increasing year to date as well, up 2% year to date compared to the TSX, which is down 1%.

And once more, you can lock in a dividend of 4.79% as of writing. As the company continues this new strategy, investors should see further TSX-beating growth.