Should You Buy Riocan for its 9.1% Dividend?

There’s one way that investors can help offset losses incurred during a recessionary period, and that’s with dividend stocks.

Recurring income can be a great way to inject cash flow into your portfolio at a time when losses are mounting from other investments.

And one stock that could be a great source of cash flow right now is Riocan Real Estate Investment Trust (TSX:REI.UN). Shares of the real estate investment trust (REIT) are down more than 40% in 2020, which is much worse than the 9% decline the TSX has been on thus far. That’s largely to do with concern that rents will be unpaid as tenants are struggling to make ends meet.

However, that risk has decreased now that cities in Canada are opening back up for business and retailers are able to start generating much-needed cash flow again. The company has collected 55% of its rent for April.

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But with government assistance and deferrals in place, it’s too early to tell just yet how big of a problem that is. And if the economy gets back to business sooner rather than later, that becomes a short-term problem for the REIT.

There’s some risk for Riocan investors in the near term but it may not be enough to deter them from the mouth-watering yields that this top REIT is paying today.

With monthly dividend payments of $0.12, investors who buy shares of the stock today will be earning an incredible dividend yield of 9.1%. On a $13,000 investment, you could be making close to $100 per month in dividend income.