If you’re building a passive-income portfolio in Canada, there’s something especially appealing about stocks that pay cash every single month. Getting a steady stream of income without having to time your withdrawals or worry about quarterly gaps makes budgeting easier and investing a bit more enjoyable. And if that monthly payout comes with a juicy 6.5% yield? Even better. That’s exactly what RioCan Real Estate Investment Trust (TSX:REI.UN) offers. It’s not a flashy tech name or a speculative growth play, but it does what many investors want most: it pays you to be patient.
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The stock
RioCan is one of the largest real estate investment trusts in the country. Now, real estate hasn’t exactly had an easy ride lately. Interest rates shot up fast, putting pressure on property values and REIT valuations. RioCan’s stock price is still down from its pre-pandemic highs, which can make some investors nervous. But here’s the thing: even as the market fluctuates, RioCan has kept on doing its job, generating reliable cash flow and paying dividends month after month. That’s where the opportunity lies.
In its most recent earnings report for the first quarter (Q1) 2025, RioCan posted revenue of $355.83 million, up slightly year over year. More importantly for income investors, adjusted funds from operations (AFFO), a key measure of a REIT’s ability to pay dividends, came in at $0.49 per unit. That was above analyst estimates and showed healthy coverage for its payout. At the current monthly dividend of $0.0965 per unit, RioCan is distributing about 71% of its AFFO, leaving it a comfortable buffer.
The dividend itself, by the way, is hard to beat. With the dividend stock trading around $17.10, the yield works out to roughly 6.68% annually. And it’s paid monthly, which adds up quickly. For every $10,000 invested, you’re looking at about $55 a month in passive income. That’s the kind of return that’s hard to find in today’s market, especially from a business that owns tangible assets and has a long history of navigating economic cycles.
| COMPANY | RECENT PRICE | NUMBER OF SHARES | DIVIDEND | TOTAL PAYOUT | FREQUENCY | INVESTMENT TOTAL |
|---|---|---|---|---|---|---|
| REI.UN | $17.10 | 584 | $1.11 | $648.24 | Monthly | $9,986.40 |
More to come
One reason RioCan has managed to stay consistent is its portfolio strategy. It focuses on properties in densely populated, transit-accessible urban areas. Many of its tenants are necessity-based retailers, think grocery stores, drug stores, and discount retailers, that tend to perform well even in slower economies. This helps keep occupancy rates high and rent collections stable. As of its last update, RioCan reported an occupancy rate of over 97%, which is impressive considering the broader retail environment.
The dividend stock has also been actively repositioning its assets in recent years. It has reduced exposure to enclosed malls and increased focus on mixed-use developments. These projects often include a combination of retail, residential, and office spaces in a single property, allowing RioCan to tap into multiple revenue streams from one site. Developments like The Well in downtown Toronto showcase how RioCan is evolving beyond strip malls into modern, integrated urban hubs.
So, is this dividend safe? At the current payout ratio, yes. The company’s management has stated their commitment to maintaining the distribution, and the AFFO coverage supports that. There hasn’t been a dividend cut since 2021 when many REITs made adjustments during the early pandemic years. Since then, the payout has remained steady, which is no small feat given everything the real estate sector has gone through.
Bottom line
For long-term investors looking for reliable monthly income, RioCan offers a compelling case. It has a solid tenant base, strong occupancy, an attractive yield, and a manageable payout ratio. It might not double your money in a year, but it will pay you every single month while you wait, and that’s something many investors value more than anything else.
