Dividend investing is an excellent way to use your money to make more. If you park your savings in a high-interest savings account, you can get some money through interest payments. However, investing in the right dividend stocks can offer you returns at far better rates that can help you keep pace with and beat inflation.
The Canadian stock market offers plenty of opportunities for investors seeking passive income through their investment portfolios. While there are plenty of dividend stocks that provide monthly distributions, not all of them offer reliable and high-yielding returns.
To make sure your strategy pays off over the long run, it is important to identify and invest in high-quality stocks with strong underlying businesses that can keep funding distributions comfortably.
Today, we’re going to discuss a high-yielding real estate investment trust (REIT) that might be an excellent way to build strong foundations for a monthly passive-income portfolio.
SmartCentres REIT
SmartCentres REIT (TSX:SRU.UN) is a REIT that owns and manages a massive portfolio of retail properties throughout Canada. The $3.93 billion market capitalization trust has several big names as its main tenants, with Walmart being one of them. With many of its retail properties anchored by giants in the retail sector, SmartCentres REIT can generate stable and reliable rental income through its properties.
By focusing on essential retail properties, SmartCentres REIT has maintained high occupancy and rate collection rates even during harsh economic environments. The fact that its tenants are mostly essential service providers, the trust has managed to deliver a consistent financial performance despite periods of economic uncertainty for the broader market.
Its recent earnings report indicated a 97% occupancy rate, highlighting its strength and reliability. SmartCentres REIT is also involved in several development projects, including mixed-use developments that will help it diversify into residential and office spaces. The projects are expected to improve its revenue streams and asset values in the coming years.
Boasting a strong essential retail portfolio and diversifying beyond it means SmartCentres REIT has plenty of growth to experience in the coming years. An improvement in its financials will translate to increases in monthly distributions to its shareholders. As of this writing, SRU.UN trades for $22.05 per unit and pays its shareholders monthly distributions at an annualized 8.39% dividend yield.
Foolish takeaway
Monthly dividend stocks can be an excellent way to grow your wealth. If you create a portfolio of reliable dividend stocks in a Tax-Free Savings Account (TFSA) and use a dividend-reinvestment program to keep purchasing more shares, you can enjoy accelerated and tax-free wealth growth through the power of compounding.
When you grow the portfolio enough, you can start withdrawing the dividends as monthly passive income. Here is how, hypothetically, investing in 649 shares of SmartCentres REIT at current levels can earn you a little over $100 per month in dividends.
| Company | Recent Price | Number of Shares | Dividend | Total Monthly Payout |
| SmartCentres REIT | $13.01 | 649 | $0.1542 | $100.07 |
| Prices as of June 12, 2025 |
