These REITs offer high yields—plus growth

Article Excerpt

The last couple of years, higher interest rates have increased the appeal of bonds and hurt REITs. Still, Choice Properties and RioCan remain excellent ways for investors to earn income, especially with rates now falling. We see both as buys. CHOICE PROPERTIES REIT, $14.92, is a buy. Canada’s biggest REIT (Toronto symbol CHP.UN; Units o/s: 327.9 million; Market cap: $10.8 billion; TSINetwork Rating: Average; Dividend yield: 5.1%; www.choicereit.ca) owns 702 retail, industrial, office space and residential properties with 65.9 million square feet of gross leasable area. Its occupancy rate is a high 98.0%. George Weston Ltd. (Toronto symbol WN) owns 61.7% of the trust. Choice’s rental revenue rose 1.5% in the quarter ended June 30, 2024, to $335.4 million from $330.3 million a year earlier. That’s due to rent increases at its retail and industrial properties. As well, cash flow increased 0.4%, to $0.255 a unit (or a total of $184.7 million) from $0.254 a unit (or $183.6 million). If you adjust for certain non-recurring items, cash…