If you're investing in S&P/ASX 200 Index (ASX: XJO) dividend stocks for passive income, you want to do your best to ensure that the company you're buying into has a history of dependable dividend payouts. And that the outlook for future payments remains strong.
That's especially true if you're relying on those dividends to build up a retirement nest egg. Or if you've already hung up your hat and kicked up your feet and are now depending on passive income to pay your monthly bills.
With this in mind, investors may wish to run their slide rule over ASX 200 real estate investment trust Charter Hall Long WALE REIT (ASX: CLW).
(WALE, if you're unfamiliar, stands for weighted average lease expiry.)
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Tapping the ASX 200 REIT for passive income
Catapult Wealth's Dylan Evans has a buy recommendation on the ASX 200 real estate stock.
"Charter Hall is a diversified property trust," Evans said (courtesy of The Bull). "CLW offers a quality and appealing property portfolio with an occupancy rate of 99% and an average lease expiry of more than 10 years."
While Evans doesn't expect much growth from the ASX REIT in 2025, he likes the stock for its passive income potential.
According to Evans:
In our view, a subdued development pipeline leaves limited growth opportunities, but with an anticipated dividend yield of 6.4% in fiscal year 2025, CLW should be considered by those seeking a reliable and defensive income stream.
And he noted that the overall risk of holding the stock has come down along with its debt levels.
"Significant property sales completed in 2024 were used to reduce gearing to 26%, which further lessens risk and improves the trust's defensive character," Evans said.
What's been happening with the Charter Hall REIT?
Among the appeals for passive income investors, the Charter Hall Long WALE REIT pays out its dividends on a quarterly basis.
Over the past 12 months, those four payouts total 25.6 cents per share unfranked. And to be precise, eligible stockholders will receive the fourth payout of 6.3 cents per share on 14 February. It's a bit too late to grab that passive income payout, as the REIT traded ex-dividend on 30 December.
At the current share price of $3.81, the ASX 200 dividend stock trades on a trailing yield of 6.7%.
For FY 2025, Charter Hall provided guidance for operating earnings of 25 cents per share and dividend payouts of 25 cents per share, meaning management intends to pass on all the company's operating earnings to shareholders.
Atop the passive income on offer, shares in the REIT are up 3% over the past year.
