3 Dividend Stocks to Buy and Hold Forever | The Motley Fool Canada

3 Dividend Stocks to Buy and Hold Forever | The Motley Fool Canada: "Leave a legacy of wealth you can be proud of: RioCan
Company Snapshot: (data as of May 13, 2014)

Market cap: $9.2 billion
Recent share price: $28.90
Trailing P/E: 15.91
Price/Book Value: 1.2
Repeat after me: Rich people own real estate.

In every country, through all of time, it has and always will be the rich people who own real estate.

When you own real estate, your tenants pay you rent. Your tenants' children pay your children rent. Your tenants' grandchildren pay your grandchildren rent.

When does this end? As long as you never sell the properties, it doesn't - barring the highly unlikely situation of 100% home ownership. Owning real estate is a time-tested way to create a dynasty of wealth that can last generations.

Of course, most of us aren't interested in spending our golden years fixing clogged toilets or chasing down rent cheques from tenants. That's the advantage of a real estate investment trust, or REIT, like RioCan (TSX: REI.UN).

Think of a REIT like a mutual fund but for real estate. With a click of the mouse you can become a partner with an already established landlord. RioCan owns 340 rental properties across the country, encompassing nearly 82 million square feet.

But RioCan is a little different from your traditional landlord. The trust specializes in commercial and retail properties, renting out its properties to businesses like Walmart, Canadian Tire, Shoppers' Drug Mart, and many other corporations I'm sure you know.

Needless to say, these types of tenants are far more reliable than the friendly people answering an ad on Kijiji. They always pay their rent on time and are certainly not going out of business in the foreseeable future.

Best of all, because of the way this firm is legally structured, it pays NO federal corporate income taxes. And because it is required by law to pay out most of its profits to unitholders, the trust yields a hearty 4.9%.

Remember, we said the true test of a wonderful business is how well it fares during times of uncertainty. That said, RioCan has managed to pay a distribution to unitholders every year since its initial public offering in 1994 — a period that included three major recessions. In fact, the trust even managed to raise its distribution during the height of the last financial crisis in 2008."



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