High-yielding dividend stocks are often seen as unsustainable, but that doesn’t always have to be the case. One stock that could prove to be a great buy is True North Commercial REIT (TSX:TNT.UN), which pays a very high yield of 9.5%. And with payments being made on a monthly basis, it’s a great way to accumulate a lot of recurring cash for your portfolio.
While the yield appears to be too good to be true, True North has generated more than enough cash flow to support it. With $24 million being paid out in dividends during the past four quarters, that represents just 55% of free cash flow during that time.
The company has also done a very good of growing over the years as well. From just $17 million in sales in 2013, True North’s top line has soared to $56 million in 2017 and it is on track for an even higher tally for 2018. And in four of its past five years, the company has been able to generate a solid net income of at least $13 million.
True North’s success has been no fluke as the company has a broad portfolio of properties in various different provinces. Many of these locations are anchored by big-name tenants, including both federal and provincial governments. This stability allows True North to keep minimal cash on hand and distribute generous payouts to its shareholders.
Currently, the stock trades right around its book value and could be a steal of a deal.
