Turning a Tax-Free Savings Account (TFSA) into a reliable income stream is a goal many Canadians share. With $10,000 to invest, selecting the right asset can make all the difference. One compelling option is CT Real Estate Investment Trust (TSX: CRT.UN), a dividend stock that has consistently delivered stable returns and growing distributions.
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About CT REIT
CT REIT primarily owns and manages a portfolio of retail properties across Canada, with a significant portion leased to Canadian Tire. This relationship provides a dependable tenant base, contributing to the REIT’s consistent performance. As of March 31, 2025, CT REIT reported a net income of $105.7 million for the first quarter, marking a 4.5% increase compared to the same period in the previous year. The net operating income also rose by 4.6% to $118.7 million, reflecting the trust’s ability to generate steady cash flows.
Investing $10,000 in CT REIT could provide a monthly income stream, thanks to its regular distributions. In May 2025, the REIT announced a 2.5% increase in its monthly distribution, bringing it to $0.07903 per unit, or approximately $0.94836 annually. This marks the 12th consecutive annual increase since its initial public offering in 2013, highlighting a commitment to rewarding unit holders. So here’s what that looks like for today’s investor for dividends alone.
| COMPANY | RECENT PRICE | NUMBER OF SHARES | DIVIDEND | TOTAL PAYOUT | FREQUENCY | INVESTMENT TOTAL |
|---|---|---|---|---|---|---|
| CRT.UN | $15.44 | 647 | $0.9252 | $599.63 | Monthly | $9,993.68 |
Can it last?
The big question is whether the dividend stock can keep it going. The answer, in short, looks like a yes.The trust’s occupancy rate remains high, standing at 99.4% as of the end of the first quarter of 2025. This indicates strong demand for its properties and efficient management. Additionally, the adjusted funds from operations (AFFO) per unit increased by 3.9% to $0.320, demonstrating the REIT’s capacity to support and grow its distributions.
CT REIT’s financial stability is further underscored by its AFFO payout ratio of 72.2%, slightly improved from the previous year’s 73.1%. This conservative payout ratio suggests that the REIT retains sufficient earnings to reinvest in its portfolio and weather potential economic downturns. The trust’s portfolio comprises over 375 properties, totalling more than 31 million square feet of gross leasable area. This extensive and diversified asset base reduces risk and enhances income stability.
Solid deal
From a valuation perspective, CT REIT’s units are trading at a price that some analysts consider attractive. As of writing, the units were priced at approximately $16, with a market capitalization of around $3.9 billion. The REIT’s price-to-earnings ratio stands at 10.5, and it offers a dividend yield of about 6 %, making it a potentially appealing option for income-focused investors.
Incorporating CT REIT into a TFSA allows investors to benefit from tax-free income and capital gains. This means that the monthly distributions and any appreciation in unit value are not subject to Canadian income tax, enhancing the overall return on investment. Moreover, the dividend stock’s conservative debt management, with an indebtedness ratio of 40.3%, provides additional financial flexibility. This prudent approach to leverage supports the REIT’s ability to maintain and potentially increase distributions over time.
Bottom line
In summary, allocating $10,000 to CT REIT within a TFSA could be a strategic move for investors seeking a steady and growing income stream. The trust’s strong financial performance, consistent distribution increases, high occupancy rates, and conservative financial management make it a noteworthy candidate for a cash-generating portfolio.
