You can build a monthly income stream through investing, but it needs time and discipline. A one-time investment can only get you to a certain level. Regular investing can increase your money and help you build an alternative source of income. However, some dividend stocks can also be used to generate immediate alternative income for the short term.
If you have received a hefty annual bonus and are worried you will spend all the money, high-yield dividend stocks can keep your investments in place and generate an immediate source of income. This way, you can enjoy your money longer without exhausting it.
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A 9.9% dividend stock that pays cash every month
The Toronto Stock Exchange has some of the most lucrative dividend stocks that pay cash every month. Property-related stocks pay monthly dividends, and other stocks like utility, energy, and telecom pay quarterly dividends. A high yield brings high risk, and a 9.9% dividend yield is high even for the TSX.
Timbercreek Financial
Timbercreek Financial (TSX: TF) stock slipped 25% since November 2024 as the outcome of the U.S. election results created uncertainty around policies. Trump tariffs aggravated the fears of a recession and loan defaults. This fear saw lending stocks fall and insurance stocks rise. Short-term mortgage lender Timbercreek Financial’s stock fell despite the Bank of Canada’s interest rate cuts.
Here is a quick recap of what has been going on with Timbercreek over the last three years. Timbercreek provides real estate investment trusts (REITs) with short-term mortgages to acquire or develop income-generating properties.
In April 2022, the Bank of Canada began its accelerated interest rate hike from 0.25% to 5% in 18 months. Such high interest discouraged real estate transactions, and property prices corrected. Many REITs paused their development plans until borrowing became affordable. Timbercreek, which enjoyed yields as high as 10% on its loan portfolio in 2023, saw a sizeable decline in loan activity. However, higher interest income helped it pay a special dividend to shareholders in 2023.
Timbercreek struggled in 2024 as REITs started repaying their loans, and those who couldn’t were moved to stage-three loans. The lender increased its credit loss provisions, which reduced its net income. Moreover, lower loan activity slowed revenue growth.
In 2025, Timbercreek’s stock traded at a discount as Trump tariffs raised fears of a recession. The real estate market has not yet fully recovered. Commercial REITs are still struggling. At times like these, a fear of recession or economic slowdown could prolong the struggle of commercial REITs. However, Timbercreek is well covered to handle credit loss and continue paying dividends because loans are short term.
Canaccord Genuity initiated coverage on Timbercreek. The investment bank gave a Buy rating to Timbercreek with a target price of $8, citing that the lender’s loans are secured by first mortgages on income-producing properties.
How does the 9.9% dividend yield play out?
Timbercreek has been paying regular monthly dividends since August 2016. The stock has recovered 12% from its all-time low but continues to trade at a discount.
A $5,000 investment in this stock can give you $41 cash every month and $496 in a year. Since you buy the stock near its low, when it is trading below its book value, the downside risk is low.
Timbercreek is a small-cap stock with a market cap of $576.9 million. Consider this dividend stock as an opportunistic buy for the short or medium term and not in your core portfolio.
