Canadians, especially young male Canadians, prefer do-it-yourself (DIY) investing as they feel confident in their own knowledge, according to the 2024 CSA Investor Index. Doing your research before investing in a new stock helps you plan an entry and exit strategy for each stock. But for that, you should first add it to your watchlist. One such dividend stock to add to your radar is Granite REIT (TSX:GRT.UN).
What should you know about this monthly-paying dividend stock?
Granite REIT owns 145 industrial properties, mostly logistics and warehouses, across North America and Europe. It caters to companies with large inventories and e-commerce companies. The REIT’s share price has surged 60% since April and shows no signs of slowing.
A major reason for the surge in share price is the growing demand for storage space as trade wars and the US-Iran war block supply. When there are supply chain issues that spike up inventory, demand for warehouses increases. Apart from such one-off events, Granite REIT is exposed to e-commerce seasonality. However, instead of reaching a peak in the second half, Granite REIT’s unit price dips in September as retailers stock up for the holiday season. When goods move fast in October, storage costs reduce, pulling down Granite REIT’s unit price.
Investors can add Granite REIT to their watchlist. But now is not the right entry point as the stock trades near its 52-week high. You should wait for a 60–70% market correction from above $97 to below $70 before buying the stock. The industrial properties are highly volatile as trade routes and warehouse proximity play a crucial role.
Three strengths of this dividend stock
Granite REIT has a strong balance sheet, with its net leverage ratio at 33% of adjusted Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA). Its leverage is lower than that of its peers, which frees up more cash flow to buy new properties and pay dividends. This also gives it the flexibility to grow dividends. Magna International and Amazon remain its top two tenants, accounting for 26.6% and 3.7% of its annual revenue.
Granite REIT has been paying regular monthly dividends for the past 11 years and has been growing them between 3% and 5%. It has financial flexibility to grow dividends, as the payout ratio stands at a comfortable 57% of free cash flow.
Granite REIT has scope to grow its net operating income from the same property, as its legacy rents are way below market rates. This gives it ample scope to charge higher rent at renewals. Every year, it renews rents that account for 10–15% of its revenue. It increased its average rent by 48% in 2025 and by 21% in the first quarter of 2026.
How to invest in Granite REIT to maximize returns
As the logistics network becomes dense and supply chain disruptions increase, demand for specific types of warehouses is growing. For those who are looking to generate dividends from e-commerce and take advantage of the industry’s seasonality, Granite REIT is a stock to buy on the dip. An entry point below $70 can generate a 6% yield.
A good strategy would be to buy the stock in October and book profits in June or August. The profits can be used to buy more Granite REIT units at the dip. Suppose you invest $10,000 in October 2026 and it grows to $16,000 in June 2027, consider selling units worth $6,000. This profit can help you buy more units at the dip, helping you accumulate more dividend units.
Note that such active investing in a normal account can increase your dividend and capital gains tax, reducing the benefit of reinvestment. A Tax-Free Savings Account and Registered Retirement Savings Plan are the right accounts as they allow investments to grow tax-free within the account.
