Canadian actual property funding trusts (REIT) are among the high decisions when in search of a dividend inventory. Not solely do these firms commonly pay out dividends, they have to. REITs in Canada are obliged to pay out 90% of all payable earnings to shareholders, and that’s often within the type of dividends. So it’s no surprise these are favourites within the earnings crowd.

However that does rely upon one factor: earnings. If these firms aren’t incomes sufficient, these dividends shall be minimize. Which is why immediately we’re taking a look at a dividend inventory that not solely helps its dividend properly, it’s seemingly to take action for many years to return. So let’s have a look at why Selection Properties REIT (TSX:CHP.UN) might belong in your portfolio.

The numbers

First, let’s have a look at what’s been happening with the dividend inventory lately. Selection REIT reported a robust second quarter for 2025. The REIT reported rental income hitting $350.8 million, up from $335.4 million from the identical interval final yr. The belief additionally noticed a 3.9% improve in funds from operations (FFO) per unit, so there’s robust money to proceed supporting that dividend.

Nevertheless, it wasn’t all perfection. The dividend inventory additionally reported a web lack of $154.2 million for the second quarter. This primarily got here from a $736.2 million unfavourable change within the honest worth of its exchangeable items. This comes from the rise of its unit costs. So it’s not as if the corporate was performing poorly.

The truth is, removed from it. Not solely did the corporate see an increase in FFO and hire, it additionally maintained a robust occupancy charge. This was throughout its retail, industrial and residential portfolios, hitting 97.8%! And with $427 million in accomplished actual property transactions for the quarter to bolster that portfolio, particularly within the industrial area, the dividend inventory doesn’t look as if it’s slowing down.

Incomes earnings

Alright, so we now have a secure REIT that’s rising, not simply in retail however within the industrial area. It holds secure money movement, and efficiency continues to be robust. So what ought to buyers watch sooner or later in the event that they’re contemplating this dividend inventory?

First off, there’s debt. The corporate holds a excessive debt-to-equity ratio (D/E), at present at 281%. That’s a priority, particularly in a better rate of interest surroundings with a stall in charge cuts. Moreover, its excessive leverage and refinancing will have to be managed correctly. And as a REIT, its efficiency is tied to financial situations that have an effect on the actual property worth, as we’ve seen.

However there’s additionally the worth facet. Proper now, the dividend inventory holds a yield at 5.3%, which after all is kind of excessive. Moreover, its payout ratio is at 101% at writing, so there’s restricted room for a rise till earnings enhance.

Nonetheless, for worth buyers getting in now, a $7,000 funding might present annual earnings of $366. That’s actually value contemplating, particularly whereas buying and selling with a ahead price-to-earnings (P/E) ratio of about 15.

Backside line

In the event you’re an investor seeking to make some money on the facet, then this dividend inventory is on the very least value contemplating. It provides dividends that come out month-to-month, and even in a better rate of interest surroundings it manages to stay robust amidst some pretty unstable conditions. Because it continues to take care of excessive occupancy, broaden into industrial properties, and full strategic acquisitions, that is one dividend inventory to maintain in your radar.