Seeing a stock on your watchlist tumble sharply may sound alarming, but it isnât necessarily bad news. I know that sounds strange, as nobody enjoys seeing an investment move lower. But the price you pay really matters, especially with a dividend stock.
Canadian Apartment Properties Real Estate Investment Trust (TSX: CAR.UN), or CAPREIT, is a good example of why I wouldnât automatically run from a big decline. Yes, this residential real estate investment trust (REIT) is navigating a softer rental environment, and its recent results also show some pressure. However, people havenât stopped paying rent; its Canadian properties are still generating resilient income, and investors continue receiving distributions every month.
In this article, Iâll explain why CAPREITâs 24% selloff, attractive monthly dividends, and discounted valuation make it look increasingly attractive to me.
A beaten-down monthly income stock to buy
Simply put, CAPREIT owns and manages roughly 45,500 residential apartment suites and townhomes across Canada and the Netherlands. After falling 24% in the last year, its units currently trade at $32.45 per share, giving the REIT a market cap of $4.9 billion. At this price, it offers a 4.8% annualized dividend yield with distributions paid every month.
Of course, the recent weakness in this monthly dividend stock has not come without challenges. Notably, CAPREITâs Canadian same-property occupancy slipped to 97.5% in June from 98.4% a year ago. Its rent growth on suite turnovers also turned negative. At the same time, the companyâs property dispositions and higher interest costs are continuing to weigh on its funds from operations.
Its latest results still offer some reassurance
Despite recent pressures, CAPREITâs second-quarter results suggest its underlying Canadian rental business remains resilient.
During the quarter, the REITâs total operating revenue fell about 3% year over year (YoY) to $246 million, while net operating income declined nearly 4% YoY to $163 million. Lost income from property dispositions, particularly in Europe, contributed to the weakness. However, CAPREITâs Canadian operating revenue rose 2.3% YoY to $241 million, backed by acquisitions and rental growth.
More importantly, its Canadian same-property net operating income climbed nearly 1% YoY to $152 million, while the margin remained stable at 66.2%. Income investors should also note that CAPREITâs second-quarter funds from operations payout ratio remained manageable at 59.2%, compared with 58.5% a year ago.
Why this dip looks attractive
At the end of June, the REIT reported a diluted net asset value of $54.38 per unit. Compared with its current market price of $32.45, CAPREIT units are trading roughly 40% below that figure. The company has been taking advantage of the lower unit price as well. During the first six months of 2026, CAPREIT repurchased and canceled about 1.6 million units for $59.5 million.
Meanwhile, the REIT continues to reshape its portfolio as it recently completed acquisitions in Canada, acquired the remaining European Residential REIT units it did not already own, and continued selling selected properties.
Clearly, CAPREIT still faces softer rental conditions and higher leverage, so investors should not expect an overnight recovery. However, its 4.8% monthly dividend yield, resilient Canadian operations, ongoing unit buybacks, and large discount to reported net asset value make this beaten-down monthly dividend stock an attractive investment to consider right now.
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* Returns as of July 30th, 2026
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Fool contributor Jitendra Parashar has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
