Finding a company with a truly safe dividend yield in the spirit of vitality is difficult. Some say no dividend is truly safe economic conditions deteriorate enough.
However, some companies do pay out dividends which are much safer than others. In this article, I'm going to discuss why I believe the dividend yield of Dream Industrial REIT (TSX:DIR.UN) is one of the safer options for income investors in this current climate.
In general, real estate investment trusts (REITs) have sold off in unison of late. This sector-wide selloff has created scenario in which some REITs have sold off to a degree which may not have been warranted in the first place.
There will be winners and losers coming out of this pandemic, and I see Dream Industrial as one of the winners for a few reasons.
Perhaps most importantly, I see industrial real estate as far less exposed to economic uncertainty than office or retail real estate.
Strong secular shift toward e-commerce, which requires a significant amount of industrial real estate relative to retail, should support this REIT subsector near term.
Dream Industrial’s 7% dividend is supported by a payout ratio of 55%, a nice buffer should earnings decline substantially in the near term. The company’s stock is also trading around book value, making Dream Industrial one of the best dividend picks on the TSX today.
Invest wisely, my friends.
