I’d Put My Entire $7,000 TFSA Contribution Into This Dividend Stock

This dividend stock dishes out monthly income, remaining an essential stock for every investor.

| More on:
Forklift in a warehouse

Source: Getty Images

Canadians are worried about their finances. And rightly so. A recent BMO Real Financial Progress Index survey showed that between March and April 2025 concern about inflation rose by 16 points to 76%. Worries about the cost of living jumped to 78%, and nearly three in five people said they’re more anxious about their personal finances now than just a month ago. It’s no wonder many are looking for safe, steady ways to generate income and protect their savings from being eaten away by inflation.

For me, if I had $7,000 to invest in my Tax Free Savings Account (TFSA) right now, I’d put it all into Dream Industrial REIT (TSX:DIR.UN). It may not be the flashiest name on the market, but it offers something much more important: reliable income and long-term growth in a sector that’s proven its worth.

About DIR

DIR.UN owns and operates industrial properties across Canada, Europe, and the U.S. These include warehouses, logistics hubs, and manufacturing spaces – the kinds of buildings that keep e-commerce and supply chains running smoothly. And those are exactly the types of assets that have been in high demand over the past few years, especially since the pandemic reshaped how goods move around the world.

The dividend stock trades around $11.24. With $7,000, you could buy roughly 622 units. Dream Industrial pays a monthly dividend of $0.05833 per unit, which works out to around $0.70 annually. That would give you an annual income of about $435, or roughly $36.28 per month. Not bad for doing absolutely nothing after you hit the “buy” button.

COMPANYRECENT PRICENUMBER OF SHARESDIVIDENDTOTAL PAYOUTFREQUENCYINVESTMENT TOTAL
DIR.UN$11.24622$0.70$435.40Monthly$6,995.28

Safety in the numbers

And since this income is earned inside a TFSA, you don’t pay a single cent in tax on it. That makes every dollar of dividend income even more valuable. If you chose to reinvest those dividends each month, you’d be compounding your returns over time, which is one of the smartest ways to build wealth steadily and securely.

But let’s look beyond the dividend for a moment. Dream Industrial has shown strong financial performance in recent quarters. In its Q1 2025 results, it posted net rental income of $91.7 million, which was up 6.8% from the year before. Its funds from operations (FFO) per unit rose to $0.26, up from $0.24 last year. This matters because FFO is a better measure of a REIT’s profitability than regular earnings. It reflects the actual cash coming in, which supports its ability to keep paying out that dividend.

The REIT has a well-diversified portfolio, with over 330 properties covering more than 72 million square feet. Occupancy stands around 94.5%, and its tenants are largely involved in sectors like logistics and manufacturing. These aren’t flashy businesses, but essential, and that’s what makes Dream Industrial so dependable. Even during economic slowdowns, companies still need places to store and move goods.

Considerations

It’s also worth noting that industrial real estate tends to benefit from inflation. As prices rise, lease rates often adjust upward, especially with long-term contracts that have inflation-linked clauses. That gives investors a bit of natural protection against inflation over time.

There’s always risk, of course. If the economy slows too much, or interest rates rise suddenly again, REITs can be affected. But Dream Industrial has done a good job managing its debt, keeping its leverage within a comfortable range. And with demand for warehouse space expected to grow thanks to e-commerce, it’s well-positioned to weather any bumps.

So yes, if I had $7,000 in my TFSA today, I wouldn’t split it up. I’d go all-in on Dream Industrial. It gives me income every month, the comfort of tax-free growth, and exposure to a sector with long-term demand. And in a time when so many Canadians are understandably nervous about inflation and recession, that kind of stability is worth a lot.

Bottom line

Sometimes, the smartest investment isn’t the one that doubles overnight. It’s the one that quietly grows while helping you sleep better at night. That’s why Dream Industrial would get every last dollar of my $7,000.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

Fool contributor Amy Legate-Wolfe has no position in any of the stocks mentioned. The Motley Fool recommends Dream Industrial Real Estate Investment Trust. The Motley Fool has a disclosure policy.

More on Dividend Stocks

Canadian Dollars bills
Dividend Stocks

Building a $35,500 Passive-Income Stream With Just $500 Monthly Investments

Buying iShares S&P/TSX Capped Composite Index Fund (TSX:XIC) over dates could eventually take you there.

Read more »

Retirees sip their morning coffee outside.
Dividend Stocks

Turn Your TFSA Into a Fund for a Comfortable Retirement

A calculated, well-disciplined, and smart approach to TFSA investing can help you turn the account into a way to fund…

Read more »

Man holds Canadian dollars in differing amounts
Dividend Stocks

Want Decades of Passive Income? 3 Stocks to Buy Now and Hold Forever

These TSX stocks have paid and increased their dividends for years and are well-positioned to pay higher dividends in future…

Read more »

hand stacks coins
Dividend Stocks

How to Allocate $30,000 for Both Current Income and Future Growth

Are you wondering how to earn income and grow your capital (at the same time)? These three quality TSX stocks…

Read more »

Blocks conceptualizing Canada's Tax Free Savings Account
Dividend Stocks

Need $1,000 Each Month? How Much You Need to Invest in a TFSA

Want income and growth? Then consider these three options analysts continue to drool over.

Read more »

The TFSA is a powerful savings vehicle for Canadians who are saving for retirement.
Dividend Stocks

Why Putting $7,000 in These Dividend Stocks Makes Sense for Your TFSA

These stocks offer high yields and have increased dividends annually for decades.

Read more »

Dividend Stocks

5 Canadian Dividend Stocks I’d Buy Now and Hold for the Next 20 Years

Got $10,000? Here's the best way to create a dividend income portfolio that will last at least two decades.

Read more »

Silver coins fall into a piggy bank.
Dividend Stocks

The Best Approach for Your $7,000 TFSA Contribution This Year

This TFSA strategy can reduce risk while providing decent returns.

Read more »