Monthly Dividend Stock In Focus: Primaris Real Estate Investment Trust – Sure Dividend

Up to date on April tenth, 2025 by Nathan Parsh

Primaris Actual Property Funding Belief (PMREF) has three interesting funding traits:

#1: It’s a REIT so it has a positive tax construction and pays out the vast majority of its earnings as dividends.
Associated:  Record of publicly traded REITs

#2: It’s a high-yield inventory primarily based on its 6.2% dividend yield.
Associated: Record of 5%+ yielding shares

#3: It pays dividends month-to-month as a substitute of quarterly.
Associated: Record of month-to-month dividend shares

You possibly can obtain our full record of month-to-month dividend shares (together with related monetary metrics like dividend yields and payout ratios), which you’ll be able to entry beneath:

Primaris Actual Property Funding Belief’s trifecta of favorable tax standing as a REIT, a excessive dividend yield, and a month-to-month dividend make it interesting to particular person traders.

However there’s extra to the corporate than simply these elements. Hold studying this text to study extra about Primaris Actual Property Funding Belief.

Enterprise Overview

Primaris Actual Property Funding Belief is the one enclosed buying center-focused REIT in Canada. Its possession pursuits are primarily in dominant enclosed buying facilities in rising markets. Its asset portfolio totals 15 million sq. toes and has a worth of roughly C$4.6 billion.

Supply: Investor Presentation

Like most mall REITs, Primaris REIT is dealing with a robust secular headwind, particularly the shift of shoppers from conventional buying to on-line purchases. This pattern has pushed quite a few brick-and-mortar shops out of enterprise lately and has markedly accelerated because the onset of the coronavirus disaster.

Primaris REIT is doing its greatest to regulate to the altering enterprise panorama. To this finish, the corporate tries to realize economies of scale whereas additionally enabling and supporting omnichannel integration.

Furthermore, Primaris REIT owns and operates buying facilities that represent the first retail mode in its markets. The REIT additionally targets buying facilities with annual gross sales of at the very least C$80 million to realize the vital mass wanted to realize vital economies of scale.

Supply: Investor Presentation

Moreover, Primaris REIT tries to construct multi-location tenant relationships to create deeper relationships with its tenants and profit from such relationships in the long term.

On February twelfth, 2025, the corporate reported fourth-quarter outcomes for the interval ending December thirty first, 2024.

The belief’s complete rental income reached $100 million, which was supported by steady occupancy ranges and contributions from lately acquired property.

Identical Properties Money Web Working Revenue (NOI) grew 9.1%. Dedicated occupancy stood at 94.5%, with in-place occupancy at 90.4%. Primaris additionally noticed a 14.5% improve in funds from operations (FFO) per common diluted unit, reaching $0.42, and maintained a stable monetary place with $590 million in liquidity and $4.1 billion in unencumbered property.

Development Prospects

Due to the traits of its core markets, Primaris REIT has some vital development drivers. In its markets, the inhabitants and common family earnings are anticipated to develop by a low to mid-single-digit development price going ahead. This implies larger revenues for the buying facilities and, therefore, larger revenues for Primaris REIT.

Furthermore, as occupancy is at present standing beneath historic common ranges, there may be ample room for future development for this REIT. Administration is assured in sustained development within the upcoming years.

Alternatively, traders ought to always remember the robust secular headwind from the shift of shoppers towards on-line buying. Whereas Primaris REIT is doing its greatest to regulate to the brand new enterprise setting, the secular shift of shoppers will nearly definitely proceed exerting a considerable drag on the enterprise of the REIT. General, we discover it prudent to imagine only a 1.0% common annual development of FFO per unit over the subsequent 5 years to be secure.

Dividend & Valuation Evaluation

Primaris REIT is at present providing a 6.2% dividend yield. It’s thus an attention-grabbing candidate for income-oriented traders however the latter ought to be conscious that the dividend might fluctuate considerably over time as a result of gyrations of the alternate price between the Canadian greenback and the USD. Due to its respectable enterprise mannequin, stable payout ratio of fifty%, the belief will not be prone to reduce its dividend within the absence of a extreme recession.

Notably, Primaris REIT has maintained a stronger steadiness sheet than most REITs to have enough monetary power to endure the secular decline of malls and the impact of a possible recession on its enterprise. The corporate has a good steadiness sheet, with a leverage ratio (Web Debt to EBITDA) of 5.8x.

Alternatively, as a result of aggressive rate of interest hikes and few price cuts carried out by the Fed in response to excessive inflation, curiosity expense is prone to rise considerably within the upcoming years. This can be a headwind for the overwhelming majority of REITs, together with Primaris REIT. If excessive inflation persists for for much longer than at present anticipated, excessive rates of interest will in all probability take their toll on Primaris REIT’s backside line.

Concerning valuation, Primaris REIT is at present buying and selling for under 8.1 instances its anticipated FFO for this yr.

Given the headwind from on-line buying, we assume a good price-to-FFO ratio of 9.0 for the inventory. Subsequently, the present FFO a number of is barely decrease than our assumed honest price-to-FFO ratio. If the inventory trades at its honest valuation stage in 5 years, then valuation would add a small quantity to complete returns.

Contemplating the 1% annual FFO-per-share development, the 6.2% dividend, and a slight tailwind from a number of expansions, Primaris REIT may supply a excessive single-digit common annual complete return over the subsequent 5 years. Whereas not sufficient to warrant a purchase advice presently, traders who prioritize secure earnings would possibly discover Primaris REIT to be a beautiful funding choice.

Last Ideas

Primaris REIT is the one REIT in Canada targeted on enclosed buying facilities. With a 6%+ dividend yield and a stable payout ratio of fifty%, it’s a beautiful candidate for income-oriented traders’ portfolios.

Alternatively, traders ought to pay attention to the dangers of this REIT. Because of its deal with malls, Primaris REIT is weak to recessions, whereas it additionally faces a robust headwind as a result of shift of shoppers from brick-and-mortar retailers to on-line purchases. Solely traders who’re snug with these dangers ought to contemplate buying this inventory.

Furthermore, Primaris REIT is characterised by exceptionally low buying and selling quantity. It’s onerous to ascertain or promote a distinguished place on this inventory.

Don’t miss the sources beneath for extra month-to-month dividend inventory investing analysis.

And see the sources beneath for extra compelling funding concepts for dividend development shares and/or high-yield funding securities.