TFSA Income Stream: Top Monthly Dividend Stocks for Tax-Free Gains

Here are two of the best Canadian dividend stocks you can add to your TFSA today to our tax-free passive income every month.

| More on:

One of the best ways to boost your monthly income is to invest in Canadian dividend stocks that pay monthly distributions. These stocks can provide a steady and reliable source of income for your Tax-Free Savings Account (TFSA), allowing you to benefit from compound growth. And as you might already know, you don’t have to pay any taxes on the dividends, or the capital gains you earn within your TFSA.

In this article, I’ll highlight two top Canadian monthly dividend stocks that you can add to your TFSA today to create a stable tax-free income stream.

Crombie REIT stock

Crombie REIT (TSX:CRR.UN) is a New Glasgow-based open-ended real estate investment trust (REIT) with a market cap of $1.4 billion. The trust has a strong portfolio of more than 300 retail and mixed-use properties with an area of roughly 19.2 million square feet. Its stock currently trades at $12.99 per share with about 6% year-to-date losses. Crombie stock offers an impressive 6.9% annualized dividend yield at the current market price and distributes these payouts on a monthly basis.

On May 8, the REIT announced its first-quarter results. For the quarter, Crombie posted a 5.5% YoY (year-over-year) increase in property revenue to $118.6 million and a 4.1% YoY rise in its operating income to $26.2 million. Despite the challenging macroeconomic environment and inflationary pressures, these optimistic growth figures reflect the company’s robust operational framework and effective property management strategies.

Crombie’s long-term growth outlook looks great due mainly to its strategic development projects and ongoing capital improvements. Also, the trust’s continued focus on improving property fundamentals through major development projects, like The Marlstone, positions it well to capitalize on tenant demand trends.

NorthWest Healthcare Properties REIT stock

Northwest Healthcare Properties REIT (TSX:NWH.UN) could be another solid pick for TFSA investors seeking stable and growing monthly dividend income. This Toronto-headquartered REIT owns a high-quality portfolio of healthcare-focused properties across several major markets, including North America, Europe, and Asia-Pacific. At the end of the March quarter, the company had interests in around 210 income-producing properties with a gross leasable area of 17.4 million square feet.

The monthly dividend stock currently has a market cap of $1.3 billion as it trades at $5.33 per share after rallying by 25.4% in the last three months. At this market price, NorthWest stock has a 6.8% annualized dividend yield.

In the quarter ended in March 2024, NorthWest’s global occupancy rate stood firm at 96.5% with an impressive rent collection rate of 98%, reflecting the REIT’s robust tenant base and effective property management strategies. Also, the weighted average lease expiry was 13.2 years, suggesting sustained long-term revenue potential and financial stability. To add optimism, NorthWest REIT’s same-property net operating income last quarter rose 6% YoY to $88.9 million.

As the demand for healthcare real estate continues to surge globally, NorthWest could benefit from its global footprint and focus on high-quality healthcare infrastructure in the years to come. Moreover, the REIT’s sale of non-core properties and effective capital management further boost its long-term earnings growth potential.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

The Motley Fool recommends NorthWest Healthcare Properties Real Estate Investment Trust. The Motley Fool has a disclosure policy. Fool contributor Jitendra Parashar has no position in any of the stocks mentioned.

More on Dividend Stocks

ways to boost income
Dividend Stocks

3 Dividend Stocks to Double Up on Right Now

The market is full of great dividend stocks for income seekers. Here’s a look at three stellar picks to consider…

Read more »

profit rises over time
Dividend Stocks

2024 Roller Coaster: Canadian Stocks That Delivered Major Surprises

Is it time to buy on weakness? For stocks that have climbed significantly, investors should manage expectations and focus on…

Read more »

engineer at wind farm
Dividend Stocks

Top Canadian Utility Stocks for Stability in 2025

As Canadian investors face considerable market uncertainty heading into 2025, these 2 defensive stocks are worth a gander.

Read more »

Nurse uses stethoscope to listen to a girl's heartbeat
Dividend Stocks

This 7.4% Dividend Stock Pays Cash Every Single Month

Northwest Healthcare Properties REIT offers dividend investors a defensive investment that should prove to be resilient and reliable.

Read more »

A close up color image of a small green plant sprouting out of a pile of Canadian dollar coins "loonies."
Dividend Stocks

Billionaires Are Selling Lululemon Stock and Picking Up This TSX Stock

Here's why some are parting ways with their athleisure darlings and choosing this dividend darling instead.

Read more »

Meeting handshake
Dividend Stocks

Mergers and Acquisitions Are Heating Up for 2025, and These 3 Stocks Could Be Targets

Alimentation Couche-Tard Inc (TSX:ATD) has tried to buy out 7/11. Will it prevail in 2025?

Read more »

Man holds Canadian dollars in differing amounts
Dividend Stocks

2 No-Brainer Stocks for Less Than $1,000

These two fundamentally strong TSX stocks offer promising growth potential and are likely to deliver above-average returns.

Read more »

Hourglass and stock price chart
Dividend Stocks

The Smartest Dividend Stocks to Buy With $3,000 Right Now

One attractive buying opportunity for new passive income investors looking to put some money to work before a Santa Claus…

Read more »