Written by Amy Legate-Wolfe at The Motley Fool Canada
When it comes to dividends, investors shouldn’t simply look at a high yield. A yield can always crash and burn should a stock suddenly decide to slice its dividend. No, instead what you want is a safe dividend. That means solid, stable income coming in no matter what.
Luckily, in the case of these three dividend stocks that’s exactly what you get. So without further blabbing on, here are the three I would consider in this market.
NorthWest REIT
NorthWest Healthcare Properties REIT (TSX:NWH.UN) recently came out with its earnings report. The good news, it was stable. The bad news, that’s pretty much all the company had on offer. But honestly, that’s kind of why I would recommend NorthWest stock among dividend stocks.
Occupancy remained at 97%, with a 13.6-years lease agreement on average from its properties. This is a solid company that seeks out long-term investments in the healthcare industry. What’s more, there is more growth on the way. The company is just about to close a joint venture in the United Kingdom, due June 30. This should bring even more stable income over the years.
Yet shares are still down 38% in the last year, and 18% year-to-date as of writing. While earnings led to a slight increase, it wasn’t anything noteworthy. So now is the time to pick up NorthWest stock with a 10.04% dividend yield.
Slate Grocery REIT
While healthcare certainly is stable, so is food. That’s why Slate Grocer REIT (TSX:SGR.UN) continues to do well even in this market downturn. At least, its company performance does. Shares are down 11% in the last year, and 14.5% year-to-date.
During its most recent earnings report, revenue climbed 30% year-over-year, with net operating income (NOI) also up by 23.8%. The problem is it’s operating at a loss, which investors haven’t been too impressed with. That being said, the company stated it has improved its financial position, looking to bring down debt and create funds long-term. This will help Slate stock continue on its growth path.
Slate stock now offers a 9.03% dividend yield as of writing, trading at a valuable 6.8 times earnings. So it’s certainly one to consider today. Because frankly, people always need to eat!
A&W Royalties
Finally, you might think that mentioning a fast food chain isn’t exactly stable. That might be true, if it weren’t a royalty fund. This is where the income fund simply brings in cash from the income of its franchise locations. This is stable income no matter how the market is doing, no matter how the chain is doing, no matter what.
That’s why I would recommend A&W Revenue Royalties Income Fund (TSX:AW.UN). Income has remained stable, and really so has the stock. Shares are down 5% in the last year, but up 5.6% year-to-date. It offers a 5.15% dividend yield as well, with income coming in from 854 locations, 845 of which are franchised.
A&W stock is likely to continue doing well, as the company continues to open up more locations and franchise more stores. So for a less risky option for monthly income, I would certainly consider A&W stock as well with your other dividend stocks.
The post FOR MAY 15: Safe Income = Safe Dividends. 3 TSX Companies With Both. appeared first on The Motley Fool Canada.
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Fool contributor Amy Legate-Wolfe has positions in NorthWest Healthcare Properties Real Estate Investment Trust. The Motley Fool recommends A&w Revenue Royalties Income Fund and NorthWest Healthcare Properties Real Estate Investment Trust. The Motley Fool has a disclosure policy.
2023