The Smartest High-Yield Play to Buy With $3,800 Right Now

There are high-yielding dividend stocks, and then there are the smart plays that are built to last.

Amy Legate-Wolfe

Amy became interested in investing in 2018 after having her first daughter. After receiving a masters degree in journalism from Western University, she became frustrated that the finance industry remained a confusing place for Canadians like her: new parents, millennials, and other young people who needed to understand their finances. Now, Amy focuses on tech companies and renewable energy for growth opportunities, coupling that with long-term investing strategies and equities. She also provides investors with a daily newsletter, Canada Stock Digest, for daily market updates. Before joining Motley Fool Canada, she wrote for major news organizations including HuffPost, CTVNews.ca, and CBC. When she’s not researching investing strategies, Amy’s time is pretty much monopolized by her two wild daughters, but in what little spare time she has she loves to do yoga, go on walks with her dog, and travel with her husband. Follow Amy on LinkedIn and Canada Stock Digest. Favorite Investment Quote: “October: This is one of the particularly dangerous months to speculate in stocks. The others are July, January, September, April, November, May, March, June, December, August and February.” – Mark Twain

Published May 26, 2025 10:00 am EDT

When markets get choppy, and interest rates remain uncertain, Canadian investors often return to what they know best. That’s reliable income from strong, high-yielding dividend stocks. One of the smartest ways to make your cash work harder right now is by putting $3,800 to use in a stock that not only pays you monthly but has a track record of delivering stable returns. Nexus Industrial REIT (TSX:NXR.UN) fits the bill perfectly. It offers a high yield, reliable cash flow, and strong long-term fundamentals, all from a sector that’s quietly become one of the most resilient in commercial real estate.

Paper Canadian currency of various denominations — Source: Getty Images

Why Nexus?

Let’s start with the number. Why does $3,800 work? At today’s share price of around $7.60, you can pick up approximately 500 units of Nexus. That’s a clean, even amount that produces over $300 with an 8.91% yield. Plus, since Nexus pays its dividends monthly, it lines up nicely with budgeting for retirement or supplementing a steady income stream inside your Tax-Free Savings Account (TFSA).

Nexus Industrial REIT used to be a mix of retail, office, and industrial real estate, but in early 2025, it completed a full transformation into a pure-play industrial real estate investment trust (REIT). That pivot couldn’t have come at a better time. While retail and office space continue to face pressure, demand for industrial real estate, particularly warehouses, logistics facilities, and small-bay industrial spaces, has remained strong. That’s driven by e-commerce growth, re-shoring trends, and supply chain restructuring.

Into earnings

In its latest earnings report for the first quarter (Q1) of 2025, Nexus reported net operating income (NOI) of $32.1 million, up 8.6% from the year before. Even more importantly, same-property NOI rose by 6.6%. The REIT’s portfolio now includes 112 industrial properties across Canada, and it boasts an impressive 97% occupancy rate. That’s a strong signal of tenant demand and rent stability, especially in today’s environment, where a lot of landlords are scrambling to keep properties full.

Nexus also reported adjusted funds from operations (AFFO) per unit of $0.081 for the quarter. With monthly distributions at $0.0533, the payout ratio sits at a comfortable 66%. That’s well within the safe zone for a REIT, indicating that the dividend is not only secure but potentially has room to grow. Many REIT investors rely on this metric, as a lower payout ratio means there’s enough buffer in earnings to maintain payments even during slower periods.

Looking ahead

Another reason Nexus stands out is its growth strategy. The REIT is actively developing new properties, including a 325,000-square-foot expansion in St. Thomas, Ont., and a 115,000-square-foot complex in Calgary. These developments are expected to be completed by Q3 2025 and will contribute $6.6 million in stabilized NOI annually. With an expected 9.4% return on development costs, it’s a smart move that adds both income and asset value to the portfolio.

Debt management is another strength. In its Q1 results, Nexus highlighted progress on its refinancing efforts, securing a $59.5 million term mortgage and renewing its credit facility with favourable terms. These steps not only improve liquidity but also provide financial flexibility for further acquisitions and development in the second half of the year.

Bottom line

Nexus also qualifies for the TFSA sweet spot. Any monthly income it produces in your TFSA is tax-free, and the capital gains, if the share price climbs, are yours to keep without worrying about tax come April. That makes a high-yield play like this even more compelling for retirement-focused investors.

To sum it up, investing $3,800 in Nexus Industrial REIT right now gives you a rare mix: a monthly paycheque, a high and sustainable yield, and a company that’s growing in all the right places. It’s a stock that fits neatly into a TFSA, delivers steady income, and offers potential for price gains as the industrial real estate sector keeps humming along. For Canadians looking to make the most of their investment dollars in uncertain times, this may be the smartest high-yield play on the TSX today.