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Shares give you dynamic returns depending on the market condition. In the last 20 years, technology has drastically changed how we live.
In this fast-growing world, are you the person who believes in Warren Buffett’s quote, “If you aren’t willing to own a stock for 10 years, don’t even think about owning it for 10 minutes”? Then read along as a 10- to 12-year investment in this TSX dividend stock could earn you $438/month in passive income. But this calculation is based on the assumption that the company maintains its current growth rate and fundamentals.
A dividend stock you might want to own for +10 years
Commercial REITs are seeing a decrease in occupancy as companies are cancelling leases or taking smaller offices in light of the uncertain business environment. Moreover, the higher interest rate has increased the mortgage rate for all REITs.
At a time when commercial real estate investment trusts (REITs) are slashing distributions, CT REIT (TSX:CRT.UN) increased its distribution by 5.2%. CT REIT is not an office REIT but a retail REIT that develops and maintains store infrastructure for its parent Canadian Tire. The retailer pays rent to the REIT, which it distributes to shareholders.
As the parent occupies more than 90% of the stores, CT REIT has 99% occupancy. It also gets a confirmed tenant for its new stores. This reduces the risk of lower occupancy and helps the REIT grow its rental income.
After listing on the stock exchange in 2013, CT REIT has increased its distribution at a compound annual growth rate (CAGR) of over 3%. If the REIT maintains this momentum for another 12 years, it could give you $438/month in passive income from July 2035.
How can CT REIT earn you $438 per month in passive income?
Considering that CT REIT continues to grow dividends at 3% CAGR, and its average stock price is $16.5, 4,235 shares can earn you $438/month in passive income.
If you were to buy 4,235 shares of CT REIT at $16.5, you would have to shell out $69,878. But you can buy these shares for $48,000 through a dividend-reinvestment plan (DRIP).
I have created a table of how your CT REIT investment could grow in DRIP if you invest $4,000 annually for the next 12 years. You can keep changing this table depending on how the market changes. I have taken the year from July 2023 to June 2024, as CT REIT increases distribution in July.
| Year | Annual Investment | CT REIT Share count $16.5 average stock price | Total CT REIT Shares | Dividend per Share (3% CAGR) | Total dividend |
| Jul-24 | $4,000.00 | 242.00 | 242 | $0.8982 | $217.36 |
| Jul-25 | $4,217.36 | 255.60 | 497.00 | $0.9251 | $459.80 |
| Jul-26 | $4,459.80 | 270.29 | 767.00 | $0.95 | $730.87 |
| Jul-27 | $4,730.87 | 286.72 | 1,054.00 | $0.9815 | $1,034.49 |
| Jul-28 | $5,034.49 | 305.12 | 1,359.00 | $1.01 | $1,373.86 |
| Jul-29 | $5,373.86 | 325.69 | 1,684.00 | $1.0413 | $1,753.48 |
| Jul-30 | $5,753.48 | 348.70 | 2,033.00 | $1.0725 | $2,180.39 |
| Jul-31 | $6,180.39 | 374.57 | 2,407.00 | $1.1047 | $2,658.95 |
| Jul-32 | $6,658.95 | 403.57 | 2,811.00 | $1.1378 | $3,198.39 |
| Jul-33 | $7,198.39 | 436.27 | 3,247.00 | $1.1719 | $3,805.31 |
| Jul-34 | $7,805.31 | 473.05 | 3,720.00 | $1.21 | $4,490.43 |
| Jul-35 | $8,490.43 | 514.57 | 4,235.00 | $1.24 | $5,265.46 |
How to invest in this dividend stock
You invest $4,000 and buy 242 shares of CT REIT this month. By the end of June 2024, you will receive $217.36 in annual distributions ($0.8982/share). Under the DRIP, CT REIT will reinvest your distribution amount to buy more shares. Add to this your $4,000 annual investment. So, in July 2025, your total investment would be $4,217, which could buy you 255 shares of CT REIT. If you add your new shares to last year’s purchase, you’ll have 497 shares.
The DRIP bought you 13 extra shares in July 2025. And if you compound it, your dividend amount ($4,490.4) could buy you 272 extra shares in the 11th year (July 2034). Due to this compounding, your $48,000 investment ($4,000 x 12 years) can buy you 4,235 shares of CT REIT and earn $438 in monthly passive income.
While CT REIT is a good passive-income stock, diversify your portfolio to strengthen your cash flow.
