It seems like investors everywhere are looking for one thing and one thing only--dependable yield.
As a response, it seems like the price of any asset class considered to be safe has skyrocketed. Utilities, telecoms, and REITs are all sectors recently hitting 52-week highs, a move that has sent yields plunging.
This trend of investors willing to pay a premium for good income payers looks likely to continue. With high-interest savings accounts, GICs, and government bonds barely paying higher than 1%, a 4% or 5% yield from a rock-solid stock looks pretty good in comparison.
RioCan Real Estate Investment Trust (TSX:REI.UN) is one such stock. The company has paid uninterrupted dividends since becoming a publicly traded company back in 1994. That translates into 245 consecutive dividend payments going from the company’s coffers into the back pockets of investors.
RioCan is well positioned to continue paying dividends for the foreseeable future. It has a diverse portfolio with no one tenant accounting for more than 5% of rent. It also has a robust development portfolio that is poised to add to the bottom line in the upcoming years.
Occupancy has been temporarily hurt from Target leaving Canada early last year, but the company has somewhat recovered from that blow. Current occupancy is just under 95%.
The company’s 4.7% yield is rock solid. The payout ratio is 88% of funds from operations, but that number will go down as the company puts cash from the sale of its U.S. operations back into paying down debt and growth projects.
