I learned that dividend stocks come in all shapes and sizes. One FTSE 250 Index the choice that caught my attention recently is Urban REIT Logistics (LSE: NATIVITY).

Here’s why I would buy the stocks I own next time I have some money to invest.

Last Mile Delivery

As its name suggests, Urban is set up as a real estate investment trust (REIT). This means that in exchange for favorable tax treatment, it must return 90% of its profits to shareholders. This makes it an attractive prospect from a dividend perspective, at least to me.

Please note that tax treatment depends on each client’s individual circumstances and may change in the future. The content of this article is provided for informational purposes only. It is not intended to, and does not, constitute tax advice of any kind.

Urban specializes in warehousing and logistics, but focuses on last-mile delivery resources. This helps online and e-commerce businesses serve customers and ensure effective order fulfillment.

Shares have been on a rollercoaster ride, with the stock up 3% in 12 months, from 116p this time last year to 120p today. Economic turbulence has hurt the commercial property market, but more on that later.

Good stuff

Starting with the positives, I’m encouraged by Urban’s modus operandi and the fact that it serves the ever-expanding e-commerce sector. Warehousing in general has grown exponentially in recent years due to rising demand. However, online shopping and changing consumer habits have meant that demand for such last-mile delivery centers outstrips supply. There are currently no signs of this slowing down. This could spell good news for Urban’s profits and could translate into higher returns for shareholders.

Speaking of returns, the dividend yield of 6.2% is attractive. For context, FTSE100 average is 3.5%. However, I understand that dividends are never guaranteed. In addition, the company has what looks like a forceful balance sheet, as mentioned in its latest FY24 report. This could assist with future growth and shareholder return initiatives.

Let’s go over the key takeaways from the report published in June. Net rental income was up over 8% year-on-year. Crucially, the company managed to turn a profit, compared to a loss last year. The dividend of 7.6p per share was the same as last year.

Potential threats

On the bearish side, I have to admit that economic turbulence still worries me. As we have seen recently, higher interest rates are a problem. They can affect rent collections, augment the likelihood of defaults and make debt management more high-priced. Furthermore, the net asset value (NAV) has also fallen. We are not out of the woods yet and I will be following developments.

Another issue I’ll be watching closely is Urban’s penchant for acquisitions to boost growth. Acquisitions are great when they work. But when they don’t, they can do untold financial damage and hurt investor sentiment.

Overall, I think Urban Logistics has a lot going for it. A growing sector with growth prospects, a tempting level of return on offer and excellent recent performance helped me make an investment decision today.