3 Stable REITs for Growth and Passive Income in 2022

These three real estate investment trusts are some of the most solid investments on the TSX today for long-term passive income.

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 June 14, 2022 10:30 am EDT

Real estate investment trusts (REITs) are some of the best stocks on the TSX today when it comes to creating passive income. The problem is, not all are doing so well — especially during the housing crisis that continues across Canada.

But there are definitely some I would consider strong investments on the TSX today. In fact, there are some that are due for solid if not incredible growth in the years to come. So, let’s look at three that are great options starting right now.

Dream Industrial REIT

Dream Industrial REIT (TSX:DIR.UN) is an infrastructure REIT, which is real estate that would be used for storage, warehouses, assembly, and other light uses. That means there is little upkeep and long-term lease agreements.

With the increasing use of e-commerce, Dream will continue to see the use of its properties thrive. During its latest earnings report, net income rose a whopping 364.9%, with net rental income up 40% to $65.3 million. Its total assets were up 10.8% to $6.7 billion.

Shares of Dream REIT are down 27% year to date, coming down during the drop in the beginning of 2022. Trading at just 3.34 times earnings, and with a dividend yield of 5.37%, it’s a great time to lock in the stock on the TSX today.

Slate Grocery REIT

For more stability, it doesn’t get better than grocery stores. And Slate Grocery REIT (TSX:SGR.U) is a solid option, with grocery stores throughout the United States. These proved to be some of the only REITs to bring in funds thanks to their label as an essential service.

If there is one thing people need, it’s food. Slate should continue to run strong in the years to come. It continues to have a fully occupied portfolio, according to its latest earnings results. Furthermore, 97% of its portfolio is secured by net leases to protect it even in an inflationary market.

Shares of Slate trade at 14.93 times earnings, with a dividend yield of 7.33%. With shares down just 1% year to date, but 16% since heights in March, it’s a great time to pick up this long-term hold on the TSX today.

NorthWest REIT

Finally, NorthWest Healthcare REIT (TSX:NWH.UN) is a strong option, and for many of the same reasons as Slate. The REIT is an essential service, picking up real estate in the healthcare sector. However, it has a diversified portfolio within the healthcare industry from offices to hospitals. Furthermore, it also owns properties around the world, which now includes the United States.

During its recent earnings report, the company continued to share great news. Revenue increased 10.9% year over year, with its net asset value per unit up 15.4%. It held a lease expiry of 14.6 years on average, supported by the company’s international hospital and healthcare facility portfolio, which averages 17 years. Total assets under management also increased 23.7% to $9.5 billion.

Yet again, shares are down 10% year to date, trading at just 6.24 times earnings. It offers a stable dividend yield of 6.31% as of writing, making it a great time to pick up this cheap dividend stock on the TSX today.