Sometimes you find good investment ideas where you least expect them.

I was reminded of this at a recent Halloween party, when a conversation with Grandpa Dave, a family friend and the father of one of my wife’s closest confidantes, called to mind two of my favorite Canadian Edge portfolio holdings.

Grandpa Dave is old-school, the kind of guy who likes to invest in real estate and fix up cars.

A serial entrepreneur, he has owned several investment properties over the past couple of decades. In keeping with the Halloween party’s “nightmare” theme, he recounted his latest tale of landlord woe, about a tenant who skipped town without notice.

I thought to myself, “There has to be an easier way to generate stable income from real estate.”

CAP REIT: Welcome Home

And there is: Conservative Portfolio holding Canadian Apartment Properties REIT, which has never cut its monthly distribution and has raised it three times since 2012.

It’s getting tougher for families to buy homes in Canada, and affordability is expected to worsen: the Canada Mortgage and Housing Corporation recently forecast that national home prices would keep rising, though at a moderate pace, through 2014 and into 2015.

That’s good news for Canadian Apartment Properties (TSX: CAR-U, OTC: CDPYF), widely known as CAP REIT. The trust is one of Canada’s largest residential landlords, with interests in 41,555 units in and around major cities including Toronto, Montreal and Vancouver, as well as in Dublin, Ireland.

Ontario accounts for about 55% of CAP REIT’s rental suites and net operating income. The REIT also has a significant presence in Quebec and British Columbia.

The best way to judge a REIT’s profitability is to look at its funds from operations. In the second quarter, CAP REIT’s normalized funds from operations (NFFO)—or funds from operations excluding certain non-recurring items—rose 10.6% from a year ago. NFFO per unit gained 1.4%, due to a 9% rise in units outstanding.

Operating revenue gained 6.6%, thanks to recent acquisitions, rent increases and high and stable occupancy: The trust’s occupancy rate stood at 98.3% on June 30, 2014, up from 97.9% on March 31, 2014.

A REIT’s payout ratio is key to the consistency of a distribution. CAP REIT’s rolling 12-month payout ratio, based on NFFO as of the end of the second quarter, was 74.8%, a conservative level that gives it room for more distribution hikes and lets it maintain and add to its current properties.

CAP REIT’s balance sheet is strong, and its weighted average interest rate fell to 3.72% in the second quarter. Management continues to focus on extending the trust’s debt maturities.

The trust’s Irish subsidiary, Irish Residential Properties REIT PLC, completed a $249 million initial public offering and the stock was listed on the Irish Stock Exchange in April 2014. This business’s growth, driven by Dublin’s favorable rental market, will let CAP REIT generate stable, growing fees from its asset- and property-management activities.

At its May 28 annual general meeting, the trust announced its 11th distribution increase, a 2.6% hike, reflecting a “positive future outlook.” Recent results suggest another increase in mid 2015.

Canadian Apartment Properties REIT is a solid buy for stable income up to $25.

Back to Grandpa Dave: In addition to his real estate adventures, he told me the story of his daughter’s first car, a white 1979 Cadillac El Dorado with a red leather interior.

She certainly made an impression with that ride. But her dad knew his kid was driving a solid car made with the highest-quality components available at the time.

Magna: In the Driver’s Seat

Magna International doesn’t hunt down used cars and fix them up, like Grandpa Dave did with his daughter’s first car. But it does hold a dominant position in the automotive supply chain.

Its divisions include Magna Powertrain, Magna Exteriors, Magna Interiors, Magna Seating, Magna Closures, Magna Mirrors, Magna Electronics, Cosma International (body and chassis) and Magna Steyr.

Magna (TSX: MG, NYSE: MGA) counts the Big Three U.S. automakers—General Motors, Ford and Chrysler—as customers, as well as Tesla Motors, Volkswagen, BMW and Toyota. In Europe, Magna Steyr holds contracts to assemble the Peugeot RCZ and Mini Countryman.

The company is benefiting from growth in the global car market, which reaccelerated in September, according to Scotiabank Economics’ Global Auto Report. Volumes rose 3.5% during the month, up from a 1% increase in August. Developed markets led the way, with stronger gains in North America and Western Europe.

Magna’s third-quarter sales rose 5.8% from a year ago, as vehicle production rose 8% in North America and 4% in Europe. Earnings per share surged to $2.19 from $1.39, and the company generated cash from operations of $737 million. Management now expects sales of $35.8 billion to $37 billion for all of 2014, tighter than its August forecast of $35.6 billion to $37.3 billion.

Dividend on the Rise

Magna has boosted its quarterly distribution six times since the end of the Great Recession. Its strong financial profile, based on conservative policies and solid operating results, easily supports the current rate and points to consistent, long-term payout growth.

Meantime, the company’s strong operating cash flow lets it invest in its current operations while funding a share-buyback program.

In February 2014, management announced an 18.8% dividend hike, to $0.38 a share. Magna is on track for a similar boost in February 2015, when it will report 2014 fourth-quarter and full-year earnings.

Big Acquisition Ahead?

With nearly $2 billion in cash, Magna is in a good spot to make a big acquisition. And there are hints that something may be in the works: CEO Donald Walker recently told the Financial Post that management is “actively looking” at “some interesting ideas out there.”

The auto sector is one of the world’s most complex industries, when you consider the amount of technology, parts and logistics involved. Magna is a leader in this complex business, which makes it one of the world’s top manufacturers. Its ambitious global expansion plan—focused on Asia—and its ongoing efforts to bring innovative products and processes to market could make it the best.

Magna International—certainly one of the most shareholder-friendly companies around—is now a buy under $110.