This 8.5% Dividend Pays Cash Every Month

Monthly dividend payments are a fantastic way to create a steady, predictable stream of income from your investments.

| More on:

You’re reading a free article with opinions that may differ from The Motley Fool’s premium investing services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Monthly dividend payments are a fantastic way to create a steady, predictable stream of income from your investments. Instead of waiting for quarterly payouts, you can enjoy the benefit of cash flow each month. This can be especially helpful for covering regular expenses or reinvesting quicker to take advantage of compounding returns. Plus, monthly dividends offer a sense of stability, thus making it easier to plan your budget or financial goals. It’s like getting a little bonus every month without having to wait! Today, let’s look at one investors will want to consider.

Created with Highcharts 11.4.3Timbercreek Financial PriceZoom1M3M6MYTD1Y5Y10YALLwww.fool.ca

Timbercreek Financial

Timbercreek Financial (TSX:TF) is a Canadian company that focuses on providing customized mortgage financing solutions to commercial real estate investors. Its business model revolves around offering flexible and short-term loans, making it easier for borrowers to secure financing for projects like multi-residential buildings, retail spaces, and industrial properties. As a result, Timbercreek can capitalize on consistent interest payments from their borrowers. This supports the ability to pay out reliable monthly dividends to investors.

From an investment perspective, Timbercreek Financial is attractive because of its focus on secured, lower-risk loans. Therefore, the loan portfolio is backed by real assets. This approach helps to stabilize their income, making them a solid option for investors seeking both income and diversification. Plus, with monthly dividend payments, Timbercreek Financial offers the added benefit of regular cash flow, thus making it appealing to those looking for a steady income stream.

Into earnings

Timbercreek Financial had a solid second quarter in 2024, with a net investment income of $26.4 million. However, this was down from $31.5 million in the same quarter the previous year. The company’s net income came in at $15.4 million, translating to $0.19 per share. This was slightly lower than the $0.20 per share from the second quarter (Q2) of 2023. Despite the slight dip, Timbercreek continued to distribute dividends, paying out $0.17 per share. Plus, Timbercreek has maintained a payout ratio of 87.8%. The company’s mortgage portfolio also saw growth, increasing by $25.8 million to $1.003 billion from the previous quarter.

Timbercreek’s management has focused on redeploying capital into high-quality loans and actively managing its mortgage investment portfolio. This remains largely secured by cash-flowing commercial properties. With the average interest rate on its mortgages at 9.8%, Timbercreek continues to generate steady cash flows for investors. Even as it works through a transitioning commercial real estate market. Chief Executive Officer Blair Tamblyn emphasized the company’s focus on navigating current market conditions to support future growth and recovery in real estate fundamentals​.

Still valuable

Timbercreek Financial remains a valuable option for investors seeking steady income, particularly due to its high dividend yield of around 8.54%. Its portfolio of secured mortgages on income-generating commercial real estate ensures a relatively stable cash flow. And this supports its consistent monthly dividends. The company also maintains a conservative loan-to-value ratio of 62.3%, which adds a layer of safety for investors. With a price-to-earnings (P/E) ratio of 11.07, Timbercreek appears reasonably valued, especially for those seeking reliable income from their investment.

However, there are some risks to consider. Timbercreek’s heavy reliance on real estate, particularly in the commercial sector, could pose challenges if the market weakens. Plus, with a payout ratio exceeding 90%, there’s limited room for dividend growth. That is, unless the company improves its earnings significantly. Its high debt-to-equity ratio of around 132% adds another layer of risk. Altogether, make sure Timbercreek aligns with your own investment goals before buying.

Should you invest $1,000 in Yamana Gold right now?

Before you buy stock in Yamana Gold, consider this:

The Motley Fool Stock Advisor Canada analyst team just identified what they believe are the Top Stocks for 2025 and Beyond for investors to buy now… and Yamana Gold wasn’t one of them. The Top Stocks that made the cut could potentially produce monster returns in the coming years.

Consider MercadoLibre, which we first recommended on January 8, 2014 ... if you invested $1,000 in the “eBay of Latin America” at the time of our recommendation, you’d have $20,697.16!*

Stock Advisor Canada provides investors with an easy-to-follow blueprint for success, including guidance on building a portfolio, regular updates from analysts, and two new stock picks each month – one from Canada and one from the U.S. The Stock Advisor Canada service has outperformed the return of S&P/TSX Composite Index by 29 percentage points since 2013*.

See the Top Stocks * Returns as of 3/20/25

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.

Fool contributor Amy Legate-Wolfe has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

Confidently Navigate Market Volatility: Claim Your Free Report!

Feeling uneasy about the ups and downs of the stock market lately? You’re not alone. At The Motley Fool Canada, we get it — and we’re here to help. We’ve crafted an essential guide designed to help you through these uncertain times: "5-Step Checklist: How to Prepare Your Portfolio for Volatility."

Don't miss out on this opportunity for peace of mind. Just click below to learn how to receive your complimentary report today!

Get Our Free Report Today

More on Dividend Stocks

TFSA (Tax-Free Savings Account) on wooden blocks and Canadian one hundred dollar bills.
Dividend Stocks

Here’s Exactly How a $20,000 TFSA Could Potentially Grow to $200,000

Index funds like the iShares S&P/TSX Capped Composite Index (TSX:XIC) are tax free in a TFSA.

Read more »

Dividend Stocks

How I’d Invest $6,000 in Canadian Real Estate Stocks to Build Lasting Wealth

Canadian REITs on sale! See how grocery-anchored retail properties offering 9% yields could turn $6,000 into lasting wealth despite US…

Read more »

rain rolls off a protective umbrella in a rainstorm
Dividend Stocks

Economic Headwinds: Should You Still Consider Buying the Dip?

A market dip might seem like a bumpy road, but it can be far smoother in the future with the…

Read more »

e-commerce shopping getting a package
Dividend Stocks

Consumer Spending Plays Amidst the Current Market Dip

Consumption may go down in market dips, but certain consumer stocks are certainly better off than others.

Read more »

Asset Management
Dividend Stocks

12% Dividend Yield! I’m Buying This TSX Stock and Holding for Decades

Stocks with high-dividend yields carry risks. But they could be a good long-term investment. Here is a 12% dividend stock…

Read more »

Canadian flag
Dividend Stocks

How I’d Build a Foundation of Canadian Value Stocks in My Investment Strategy

Canadian investors can explore iShares Canadian Value Index ETF for value stock ideas to build a foundation for their diversified…

Read more »

Canadian dollars are printed
Dividend Stocks

How I’d Transform a $30,000 TFSA Into a Cash-Flow Machine

Here's why TFSA investors should consider owning dividend stocks such as Mullen Group in 2025.

Read more »

A woman shops in a grocery store while pushing a stroller with a child
Dividend Stocks

Dip Buyers Could Win Big in Today’s Market Dip

If you want to buy the dip, think long-term. Which is why this TSX stock is a top option.

Read more »