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.
