Are Real Estate Stocks a Good Option in September 2023?

The blog section can be rephrased in simplified language as follows: Where the picture came from: Getty Images.

For Canadian investors seeking to establish passive income sources through stock market investing in their personal portfolios, there are many promising options available despite the current market instability. Canadian REITs are currently trading at prices much lower than they were at during their peak in 2023.

If you're an investor focused on gaining income, purchasing excellent stocks in the real estate field when they're discounted can result in receiving payouts with enhanced returns.

Consider adding a few Canadian REITs to your investment list as they are performing well in terms of earnings, occupancy rates and distributable cash flows. These are worth keeping an eye on or even adding to your portfolio. In this article, we'll take a closer look at three of the largest players in the Canadian REIT market.

Allied Properties REIT is a trust worth $2.69 billion in market capitalization that prides itself as a top owner and operator of workspaces situated in urban areas in major Canadian cities. A majority of its holdings are located in choice spots within Toronto and Montreal. The trust earns its revenue mostly from the money received as rent from tenants belonging to sectors such as banking, government, and telecommunications.

At the time of writing, it is currently being traded at a price of $21.06 per share, which is a significant drop of 31.04% compared to its peak value on February 3, 2023. During the second quarter of fiscal 2023, it reported a year-over-year revenue growth of 4.1%, while its net income demonstrated a notable increase of 26%. It is currently paying its investors at an annualized dividend yield of 8.46%, with a monthly distribution of $0.15 per share.

Investing In Canadian Apartment Properties Trust

CAPREIT is a real estate investment trust listed on the Toronto Stock Exchange with a capitalization worth $8.23 billion. The company mainly focuses on acquiring and leasing multi-unit residential properties situated close to big urban centers in Canada. Its primary source of income comes from renting out apartments and properties. Overall, CAPREIT's portfolio caters to the luxury and mid-tier market segments.

The biggest residential REIT in Canada is profiting from the trend of people choosing to rent instead of buying a house because of expensive real estate prices across the country. Although it doesn't completely solve the problem of the lack of affordable housing, renting makes it relatively simpler for people to find a place to live. Currently, the REIT's shares are being sold for $49.14, which is 7% lower than its peak in July 2023. It awards its shareholders a dividend yield of 3.07% per year, equivalent to a monthly distribution of $0.12.

Killam Apartment REIT is a real estate investment trust with a market value of $2.15 billion. They focus on purchasing, handling, and constructing apartment buildings and Manufactured Home Communities (MHCs) with multiple residential units.

Along with its apartment and MHC categories, Killam Apartment REIT also manages a commercial division that oversees over seven properties. The current housing affordability dilemma is actually an advantage for Killam Apartment REIT.

At the time of writing this blog, the trust's stocks are being sold at $18.27. At present, it provides its investors with a yearly dividend yield of 3.84%. It disburses $0.05833 per share each month as a distribution.

In the initial three months of fiscal 2023, the company experienced a growth in both revenue and net operating income compared to the same period last year. The increase was 9.6% in revenue and 12.3% in net operating income. Due to the high demand for rental housing, the company stands to benefit financially. Therefore, it is expected that the company will continue to provide financial gains to its investors.

Purchasing stocks at a lower price and selling them when they are high is a smart strategy to yield a profitable outcome in the stock market. However, investing in stocks that offer monthly payouts to shareholders can give you additional monthly income in addition to potential profits from capital gains.

In order to achieve this objective, including Allied Properties REIT, Canadian Apartment REIT, and Killam Apartment REIT in your personally-managed portfolio can be highly beneficial.