Investing in monthly-paying dividend shares which are a part of recession-resistant sectors means that you can create a low-cost passive revenue stream. So, it’s essential to determine high quality corporations which are positioned to keep up these payouts throughout market cycles.
One such TSX inventory is Slate Grocery (Tsx:SGR.UND), which owns and operates grocery-anchored actual property in the US. Slate Grocery owns US$1.3 billion of important actual property infrastructure throughout main U.S. metro markets that communities depend on for his or her on a regular basis wants.
The REIT’s resilient grocery-anchored portfolio and robust credit score tenants present unitholders with sturdy money flows and the potential for capital appreciation over the long term.
A powerful efficiency in Q1 of 2025
Slate Grocery REIT delivered spectacular leads to the primary quarter (Q1) with distinctive leasing momentum driving natural progress. The actual property funding belief accomplished over 220,000 sq. toes of leasing through the quarter, reaching record-high renewal spreads of 17% above expiring rents and new offers at 22% above comparable in-place rents.
Identical-property internet working revenue elevated 4.3% on a trailing 12-month foundation, adjusting for accomplished redevelopments. Portfolio occupancy remained steady at 94.4%, whereas common in-place rents of US$12.72 per sq. foot stay under the nationwide market common of US$23.85, offering runway for continued lease will increase. This mark-to-market alternative represents a 47% low cost to present market charges, positioning SGR for sustained natural progress.
SGR’s strategic deal with grocery-anchored retail supplies defensive traits in unsure financial instances. The portfolio contains 95% grocery-anchored properties throughout 116 belongings in 23 states, with 69% of tenancies being important, together with world-class grocers similar to Walmart (#1), Kroger (#2), and Ahold Delhaize (#7).
Administration emphasised that grocery-anchored actual property facilitates important last-mile meals distribution, with over 94% of grocery gross sales fulfilled by bodily shops, regardless of the expansion of e-commerce.
The REIT advantages from restricted retail provide constraints, with retail experiencing the bottom new development amongst main property varieties, at simply 1.6% forecasted provide progress, in comparison with 8.5% for industrial. Excessive development prices and tight lending circumstances additional reinforce obstacles to new retail growth, making a beneficial atmosphere for lease progress.
SGR maintains a strong monetary place with solely US$179 million of debt maturing in 2025, representing lower than 13% of complete debt. The REIT efficiently accomplished US$634 million of refinancings in 2024 and has superior discussions underway for the remaining 2025 maturities.
With 93.1% fixed-rate debt and a 4.7% weighted common rate of interest, SGR is well-positioned to handle refinancing actions. The corporate trades at a big 25.5% low cost to internet asset worth regardless of having the bottom in-place rents and the very best grocery-anchored share amongst friends.
Administration expressed confidence within the acquisition pipeline whereas sustaining disciplined capital allocation targeted on grocery-anchored properties in rising Sunbelt markets, the place 57% of the portfolio is situated.
Is the dividend inventory a very good purchase proper now?
Slate Grocery pays shareholders a month-to-month dividend and provides a yield of 8% in 2025. During the last 5 years, TSX dividend inventory has returned 135% to shareholders in dividend-adjusted features.
Regardless of these outsized returns, analysts forecast that the TSX inventory will return 14% to shareholders over the subsequent 12 months, primarily based on consensus worth targets. If we modify for dividends, cumulative returns might be nearer to 22%.