5 dividend-paying real estate stocks to buy in 2021

Summary

• The real estate sector plays a pivotal role in providing shelter to Canadians.
• A July 2021 survey pointed that the aggregate home price in Canada has soared 25.3 per cent year-over-year (YoY).
• The country’s secondary markets are said to be noticing a substantial boost in the housing market.

The real estate sector plays a pivotal role in providing shelter to Canadians. Along with that, a significant portion of investors also like to foray into in this area for a passive income source.

The Canadian housing market noted a massive rally in the wake of the pandemic, reaching record high prices. While the rally appears to be slowing down, the home prices remain elevated.

A July 2021 survey by Canadian real estate player Royal LePage pointed that the aggregate home price in the country has soared 25.3 per cent year-over-year (YoY) to C$ 727,000 in the second quarter of 2021 amid inventory shortages.

Meanwhile, secondary markets, which consist of smaller cities and big towns, are said to be noticing a substantial boost in the housing market.

On this note, let us explore some real estate stocks that have the added bonus of dividends.

1. Colliers International Group Inc. (TSX: CIGI)

Colliers International Group operates in about 60 countries, providing services and solutions to real estate owners and investors. Its stock closed at C$ 152.8 on July 28.

The Canadian firm paid a semi-annual dividend of US$ 0.05 apiece on July 14, 2021 yielding 0.082 per cent. It holds an earnings per share (EPS) of US$ 1.54 and a return on equity (ROE) of 8.75 per cent, as per TMX.

Colliers International Group posted revenues of US$ 774.9 million in the first quarter of 2021, which was up by 23 per cent YoY from that of US$ 630.6 million in the first quarter of 2020. Its EBITDA was US$ 92.1 million, up 69 per cent YoY, in this quarter.

2. FirstService Corporation (TSX: FSV)

FirstService Corporation has two business segments that manages residential and commercial clients in North America. It stock closed at C$ 234.97 on July 28.

The company paid a quarterly dividend of US$ 0.182 on July 7, with a dividend yield of 0.3 per cent.

FirstService Corporation posted a revenue of about US$ 831.6 million in Q2 FY2021, which was up from that of US$ 621.6 million in Q2 FY2020.

Its GAAP earnings per share (EPS), on the other hand, amounted to US$ 0.83 in this quarter, while its adjusted EBITDA was US$ 89.9 million.

The real estate firm holds an EPS of 3.23, an ROE of 16.69 per cent and a return on assets (ROA) of 5.09 per cent.

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3. Tricon Residential Inc. (TSX: TCN)

Tricon Residential manages single and multi-family rental homes catering to the real estate requirements in the US and Canada. Its stock price closed at C$ 14.88 on July 27.

Tricon Residential’s net income was US$ 41.9 million in Q1 FY2021, which moved up from a net loss territory in Q1 FY2020. Its revenue from single-family properties was US$ 98.5 million, which grew by 9.1 per cent YoY.

The company rolled out quarterly dividends of C$ 0.07 on July 15. It records a five-year dividend growth rate is 2.5 per cent, as per TMX.

Tricon Residential holds an EPS of 0.87, an ROE of 7.54 per cent and a price-to-earnings (P/E) of 17.1.

4. Becker Milk Company Ltd. (TSX: BEK.B)

Becker Milk Company Ltd (BEK.B) operates retail, commercial properties in Canada in the province of Ontario. Becker recorded a stock price of C$ 13.5 on July 28.

The real estate enterprise’s total revenue of C$ 3.09 million in the fiscal year ending April 30, 2021, slumped from that of C$ 3.17 in FY2020.

Becker Milk Company distributed semi-annual dividends of C$ 0.40 apiece on March 31, 2021. Their dividend yield stood at 5.9 per cent.

5. Canadian Apartment Properties Real Estate Investment Trust (TSX: CAR.UN)

Canadian Apartment Properties Real Estate Investment Trust acquires and leases residential properties across Canada. It closed at a price of C$ 61.73 on July 28.

CAPREIT’s operating revenue stood at C$ 227.51 million in Q1 FY2021, which posted a substantial increase from that of C$ 216.10 million in Q1 FY2020.

Its net rental income stood at C$ 146.65 million in the latest quarter, where it also recorded a 99 per cent rent collection rate on a year-to-date (YTD) basis.

CAPREIT is scheduled to pay a monthly dividend of C$ 0.115 apiece on August 16 this year, and posted a dividend yield of about 2.2 per cent on TMX.

It had an ROE of 10.9 per cent, a P/E ratio of 11.1 and an EPS of 5.54.