Passive-Income Investors: Make $3,500 Annually From This Valuable Dividend Stock

Dream Industrial REIT (TSX:DIR.UN) provides passive-income investors with stellar value, strong future share growth, and a stable dividend.

Amy Legate-Wolfe

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. Favorite Investment Quote: “October: This is one of the particularly dangerous months to speculate in stocks. The others are July, January, September, April, November, May, March, June, December, August and February.” – Mark Twain

Published May 9, 2022 12:15 pm EDT

| More on: DIR.UN

Passive-income investors are on the hunt lately thanks to a troublesome market situation that leads growth stocks to drop significantly. Even some dividend stocks out there are falling further and further, creating a situation that’s tough for investors to swallow.

Luckily, there are still dividend stocks out there for passive-income investors that provide income and value — even today! One I would consider is Dream Industrial REIT (TSX:DIR.UN).

money cash dividends — Image source: Getty Images

Why Dream REIT

The reason I like Dream Industrial is its position as a real estate investment trust (REIT) and for being in the industrial sector. Whereas other REITs may continue to suffer during a downturn, Dream Industrial has the advantage of being in a strong industry.

Industrial companies continue to produce strong revenue thanks to the growth in e-commerce and supply-chain demand. And this has been the case for Dream Industrial REIT.

Passive-income seekers can look to the company’s quarterly growth for example. The first quarter of this year saw net income climb 365% year over year, with net rental income at $65.3 million, or 40% up, year over year. Assets increased 10.8% to $6.7 billion, with diluted funds from operations up 16% to $0.22 per share.

Still valuable

Dream Industrial stock still offers passive-income investors strong value, even with these stellar results. It currently trades at 5.4 times earnings and 0.86 times book value. That puts it perfectly into value territory. Furthermore, the stock continues to trade just above oversold territory. It currently trades at a relative strength index of 31.

And, of course, there’s a 4.99% dividend yield to look after to. That’s a $0.70 annually dividend yield that’s remained stable for years. That looks to continue as the company further increases its properties through acquisitions and organic growth.

Make $3,500 per year!

Given all this value, passive-income investors can make $3,500 per year at stellar value. Right now, shares of Dream Industrial REIT trade at $14 per share. That’s down 18% year to date as of writing. So, with all this value, it would take an investment of $70,000 to create passive income of $3,500 per year.

Now, that’s an enormous investment. Let’s say you want to work up to that amount instead. If you wanted to make $3,500 in returns, then I would also look to the company’s target price of $18.63 as of writing. It would take a far less amount of 1,000 shares to make returns of over $3,500 in the next year.

If you picked up 1,000 shares at the company reached its target price, that would provide $4,630 in returns! And on top of that you’d have $700 in dividends. All just for spending $14,000 instead of that $70,000.

Bottom line

Dream Industrial REIT provides passive-income investors with strong value, solid growth, huge acquisitions, and, of course, dividends. The dividend stock is a strong long-term investment as the e-commerce industry, as well as supply demand, grows. So, for just $14,000, you can bring in even more than $3,500 per. In total, you could have returns of $5,330 by 2023!