Investing in high-dividend stocks allows you to create a low-cost passive-income stream. As dividend yields and share prices are inversely related, the ongoing pullback in valuations enables you to benefit from a sizeable forward yield in April 2025. One high-dividend TSX stock that has a monthly payout is Timbercreek Financial (TSX:TF).
Valued at a market cap of $538 million, Timbercreek is a mortgage investment company that provides shorter-duration structured financing solutions to commercial real estate investors in Canada. It focuses on lending against income-producing commercial real estate properties, including multi-residential, office, and retail buildings located in urban Canadian markets.
Down almost 40% from all-time highs, the TSX dividend stock pays you a tasty dividend yield of 10.5% right now.
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Is the TSX dividend stock a good buy in 2025?
In the fourth quarter (Q4) of 2025, Timbercreek Financial reported a net investment income of $27.9 million and a distributable income of $0.21 per share. Given that the TSX stock pays investors a monthly dividend of $0.575 per share, it ended Q4 with a payout ratio of 82%. The commercial mortgage lender grew its portfolio to $1.1 billion, up $140 million year over year, driven by robust origination activity.
“In recent quarters, we’ve been anticipating that additional rate cuts will strengthen market conditions and drive increased financing opportunities, and we’re seeing that play out,” said Chief Executive Officer Blair Tamblyn on the earnings call.
Timbercreek advanced $242 million in new mortgage investments during Q4, including 22 new loans primarily focused on low-LTV (loan-to-value) multifamily investments. Portfolio repayments were $171.3 million, resulting in a net growth of $72 million quarter over quarter.
Despite the solid operational performance, Timbercreek recorded a larger expected credit loss (ECL) reserve of $15.1 million, tied mainly to two Calgary office loans. This impacted reported earnings but did not affect distributable income or the dividend. Management described it as “a cyclical low point in the Calgary office market” and expects conditions to improve.
“We believe these improved market conditions should accelerate the resolution of the remaining stage loans,” noted Scott Rowland, chief investment officer. “We look forward to recycling that capital into compelling investments that our pipeline is generating.”
Is the TSX stock undervalued?
The portfolio’s weighted average interest rate was 8.9% in Q4, down from 9.3% in Q3 and 10% a year ago. This reflects Bank of Canada rate cuts totaling 175 basis points in 2024. Over 80% of the portfolio consists of floating-rate loans with rate floors, which provide some protection against declining rates.
Multi-residential real estate continues to dominate the portfolio at 60%, with first mortgages representing 89.6% of investments. The weighted average loan-to-value ratio stood at 63.3%, reflecting conservative positioning but expected to increase toward historical norms on new originations.
Management expects business fundamentals and transaction activity to improve in 2025. Timbercreek also highlighted its recent CMHC (Canada Mortgage and Housing Corp.) approved lender status, which should act as a tailwind for its bridge loan business by allowing it to provide third-party takeout financing.
Timbercreek shares continue to trade at a significant discount to book value, with the current $8.27 per share book value approximately 19% above the weighted average trading price in Q4.
Analysts remain bullish on the TSX stock and expect it to gain over 24% from current levels, given consensus price targets.
