- Market downturns have turned investors’ interest toward defensive stocks, which could add real value to their portfolios.
- Some real estate investment trusts (REITs) can help investors play defensive by offering steady dividend income every month.
- Broadwalk REIT’s profit swelled by 139.6 per cent to C$ 69.4 million in the first quarter of 2022.
Market downturns have turned investors’ interest toward defensive stocks, which could add real value to their portfolios. The S&P/ TSX Composite Index sank by over six per cent in 2022, and inflation-led economic stress continues to impact consumers.
Some real estate investment trusts (REITs) like Broadwalk (TSX: BEI.UN), RioCan (TSX: REI.UN) and Canadian Apartment Properties (TSX: CAR.UN) can help investors play defensive by offering steady dividend income every month. And indeed, these REITs expand investors’ exposure to the hot Canadian real estate market.
Here are five REITs that you can add to your portfolio.
1. Broadwalk REIT (TSX: BEI.UN)
Broadwalk REIT operates multifamily communities in Canada. The C$ 2.3 billion market cap REIT saw its rental revenue at C$ 118.3 million in Q1 2022, marking a year-on-year (YoY) surge of 2.2 per cent. The Trust reported a YoY rise of 2.1 per cent in its same property rental revenue to C$ 115.6 million in the latest quarter.
Broadwalk REIT’s profit swelled by 139.6 per cent to C$ 69.4 million in the first quarter of 2022. The REIT is scheduled to pay a monthly dividend of C$ 0.09 apiece on May 16.
According to Refinitiv data, BEI.UN appears to have oversold in May and currently has a Relative Strength Index (RSI) value of 21.34 as of Tuesday, May 11. Units of Broadwalk REIT spiked by roughly 26 per cent in 12 months.
2. RioCan REIT (TSX: REI.UN)
RioCan REIT is a mid-cap trust that owns and manages a portfolio of retail-focused properties and mixed-use developments in Canada. RioCan REIT posted a net income of C$ 160.2 million in the first quarter of FY2022, higher than C$ 106.7 million earned a year ago.
The REIT said that with YoY growth of 27 per cent in funds flow from operations (FFO) in Q1 2022 and is on track to achieve a five to seven per cent of FFO surge (per unit) this year, as per its 2022 guidance. As of now, it doles out a monthly dividend of C$ 0.085 per share.
REI.UN plummeted by nine per cent year-to-date (YTD) and had an RSI value of 19.12, signifying an oversold market condition.
3. Canadian Apartment Properties REIT (TSX: CAR.UN)
Canadian Apartment Properties REIT rents a portfolio of multi-unit residential properties across the nation, particularly near major urban centres. The mid-cap REIT will deliver a monthly dividend of C$ 0.121 apiece to its shareholders on May 16.
Unites of Canadian Apartment Properties dipped by over 18 per cent in the last 52 weeks. CAR.UN had an RSI value of 26.84 as of writing, according to Refinitiv.
4. InterRent REIT (TSX: IIP.UN)
InterRent REIT recorded a net operating income (NOI) of C$ 32.35 million in Q1 FY2022, marking an improvement of 22.2 per cent. The REIT reported an occupancy rate of 95.5 per cent in March 2022, up from 91.3 per cent a year ago. InterRent is also set to pay a monthly dividend of C$ 0.029 per share on May 16.
As per Refinitiv findings, IIP.UN tanked by about 21 per cent YoY and held an upward-moving RSI value of 36.92 at the time of writing this.
5. CT REIT (TSX: CRT.UN)
CT REIT invests and leases retail and mixed-use commercial properties in Canada. The Trust considers Canadian Tire Corporation (TSX: CTC) its most significant tenant as the retail giant accounts for most of its revenues. CT REIT’s net income grew by 24.8 per cent YoY to C$ 93.07 million in the first three months of FY2022.
CRT.UN spiked by about one per cent YoY, and its RSI value stood at 36.92 when writing this as per Refinitiv data.
The S&P/ TSX Capped REIT Index has declined by nearly 16 per cent so far this year. However, investors could explore the REITs mentioned above as some are currently available at lower prices than their 52-week high. In addition, all of these TSX REITs offer regular monthly dividends and could help investors minimize inflationary impact.
Please note, the above content constitutes a very preliminary observation based on the industry, and is of limited scope without any in-depth fundamental valuation or technical analysis. Any interest in stocks or sectors should be thoroughly evaluated taking into consideration the associated risks.