The Best Real Estate Dividend Stocks for Years of Passive Income

Are you looking to collect stable passive income for years? These two top TSX real estate stocks deliver value, growth, and income.

| More on:
a person looks out a window into a cityscape

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s premium investing services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Real estate stocks are a great place to earn regular passive dividend income. When buying a real estate stock, you get all the liquidity of a public stock but the benefits of owning private real estate. This includes predictable streams of leased income that is normally distributed to unitholders monthly.

Plenty of ways to collect passive income with REITs

The best vehicle for buying publicly traded real estate is through a real estate investment trust (REIT). REITs come in all sizes with different sectors and varying geographic exposures. Different REIT segments include industrial, multifamily/apartment, retail, office, healthcare, seniors care, mobile homes, and even hotels.

Now, not all REITs are created equal. If you want a REIT to buy and hold for years of reliable passive income, it needs to have a strong balance sheet, great assets in good locations, smart managers, and opportunities to steadily grow its cash flows on a per-unit basis. If you are looking for some real estate stocks that meet these criteria, here are two that look attractive today.

Granite REIT: As solid as it gets for passive income

Created with Highcharts 11.4.3Granite Real Estate Investment Trust PriceZoom1M3M6MYTD1Y5Y10YALLwww.fool.ca

Just like its name, Granite REIT (TSX:GRT.UN) is a solid Canadian stock to hold for years of passive income. With a market cap of $5.5 billion, it is currently the largest industrial real estate stock in Canada. It operates nearly 59 million square feet of industrial space across Canada, the U.S., and Europe. It has another five million square feet of space being developed.

Granite’s average lease is over 5.7 years, which means it has a foreseeable sightline of leased cash flows. With 99% occupancy, demand for its properties continues to be strong. The best part is that Granite has an industry-leading balance sheet. With a debt-to-asset ratio of 30%, its debt is well managed, long dated, and relatively hedged to rising interest rates.

Granite stock yields 4% right now. Its payout ratio is only 78%, which means its distribution is sustainable. It has increased its dividend annually for 12 consecutive years, so it is a great bet for rising monthly passive income. It helps that this stock is trading at a near 15% discount to its assessed private value.

BSR: Undervalued, high-quality multi-family real estate

Created with Highcharts 11.4.3BSR Real Estate Investment Trust PriceZoom1M3M6MYTD1Y5Y10YALLwww.fool.ca

BSR REIT (TSX:HOM.U) is another stock to consider for exposure to multifamily real estate in the United States. With interest rates rising, home ownership has become much more costly. That makes BSR’s garden-style communities very attractive for young professionals and families.

Its properties are in top U.S. growth markets like Oklahoma City, Dallas, Houston, and Austin. With strong immigration and high demand, BSR has seen its occupancy rise to over 96%.

BSR has a solid balance sheet with a low 36% debt ratio. Today, 100% of its debt is fixed and it has $176 million of liquidity. Despite its high-quality portfolio, this REIT trades at a 35% discount to its net asset value (private market value).  

Today, this real estate stock earns a 3.75% distribution yield. It raised its distribution last year by 4%. Given its low distribution payout ratio, another increase could be possible in 2023.

Insiders have a large stake in the REIT, so their interests to succeed are aligned with unitholders. If you are looking for value, income, and even growth, BSR is a great long-term stock to hold for passive income.  

Should you invest $1,000 in Corus Entertainment right now?

Before you buy stock in Corus Entertainment, consider this:

The Motley Fool Stock Advisor Canada analyst team just identified what they believe are the Top Stocks for 2025 and Beyond for investors to buy now… and Corus Entertainment wasn’t one of them. The Top Stocks that made the cut could potentially produce monster returns in the coming years.

Consider MercadoLibre, which we first recommended on January 8, 2014 ... if you invested $1,000 in the “eBay of Latin America” at the time of our recommendation, you’d have $21,058.57!*

Stock Advisor Canada provides investors with an easy-to-follow blueprint for success, including guidance on building a portfolio, regular updates from analysts, and two new stock picks each month – one from Canada and one from the U.S. The Stock Advisor Canada service has outperformed the return of S&P/TSX Composite Index by 38 percentage points since 2013*.

See the Top Stocks * Returns as of 2/20/25

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

Fool contributor Robin Brown has positions in BSR Real Estate Investment Trust and Granite Real Estate Investment Trust. The Motley Fool recommends BSR Real Estate Investment Trust and Granite Real Estate Investment Trust. The Motley Fool has a disclosure policy.

Confidently Navigate Market Volatility: Claim Your Free Report!

Feeling uneasy about the ups and downs of the stock market lately? You’re not alone. At The Motley Fool Canada, we get it — and we’re here to help. We’ve crafted an essential guide designed to help you through these uncertain times: "5-Step Checklist: How to Prepare Your Portfolio for Volatility."

Don't miss out on this opportunity for peace of mind. Just click below to learn how to receive your complimentary report today!

Get Our Free Report Today

More on Dividend Stocks

dividends grow over time
Dividend Stocks

Income Investors: These Canadian Dividend All-Stars Are Raising Payouts Again

Long-term income investors can consider these Canadian dividend all-stars that are trading at good valuations.

Read more »

Paper Canadian currency of various denominations
Dividend Stocks

Here’s How Many Shares of ZMI You Should Own to Get $500 in Monthly Dividends

This BMO monthly income ETF is diversified and easy to understand.

Read more »

dividends can compound over time
Dividend Stocks

Tariff Risks Are Rising: Here’s How to Stay Ahead as an Investor

Are you worried about tariffs? Worry no more and protect yourself with these three stocks offering protection.

Read more »

investor looks at volatility chart
Dividend Stocks

Market Correction: 3 Canadian Stocks to Buy Before Prices Rebound

These three Canadian stocks certainly offer a lot to investors, such as stability and value, but growth is definitely in…

Read more »

a person prepares to fight by taping their knuckles
Dividend Stocks

Tariff Trouble: How Canadian Investors Can Protect Their Portfolios

Canadian investors can protect themselves against Trump tariffs through diversification.

Read more »

Young Boy with Jet Pack Dreams of Flying
Dividend Stocks

Here’s How Many Shares of Peyto You Should Own to Get $100 in Monthly Dividends

Peyto Exploration and Development stock offers investors monthly income and exposure to the strong natural gas market.

Read more »

space ship model takes off
Dividend Stocks

Why Magellan Aerospace Could Be the Hottest TSX Stock in 2025

An industry consolidator with visible earnings growth could be the hottest TSX stock in 2025.

Read more »

sale discount best price
Dividend Stocks

TSX Sell-Off: These 2 Oversold Stocks Look Like Bargains Today

These Canadian stocks that have slipped into oversold territory but could offer promising value.

Read more »