0.5% Monthly Cash Flow! This Dividend Stock Is My ATM Machine

Did the 0.5% dividend yield surprise you? A dividend yield is calculated on an annual basis, and this dividend stock pays a 5.97% yield, but in 12 monthly installments. If you invest $10,000, you can get around $600 in a year or $50 in a month. Thus, you can earn 0.5% of the $10,000 invested in monthly cash flow. It is like your personal ATM, but better.

With an ATM, your bank balance falls as you withdraw. But this dividend ATM keeps your principal amount intact while growing your monthly payout by 3% every July. Don’t believe it? This stock has been doing it for the last 12 years, including July 2025.

The dividend stock that gives 0.5% monthly cash flow

The stock in discussion is CT REIT (TSX:CRT.UN), the real estate arm of your familiar retailer, Canadian Tire. The business structure is a win-win for the retailer, the REIT, and its shareholders. You must be familiar with Canadian Tire stores, the retailer you visit to buy outdoor equipment, auto parts, and gas for your car. The retailer’s model is simple; it pays dividends on the profit it makes from sales. It is a dividend king, distributing dividends for 25 years.

One of the biggest costs for the retailer is buying, leasing, and developing stores. It separated that function and created an embedded organic growth plan. Under the plan, CT REIT has the first right to buy a Canadian Tire store, intensify or redevelop an existing store, or develop a whole new store. CT REIT buys the store from Canadian Tire and leases it back to the retailer. The retailer pays rent, which grows by 1.5% every year. You can consider this arrangement as selling your house to your parents and giving them rent to live there. This arrangement removes the stress of finding a tenant, the risk of defaulting on rent, and other legal issues.

Since its IPO in October 2013, CT REIT has completed 115 intensification projects for Canadian Tire and has 14 more in the pipeline. The REIT also acquires stores that Canadian Tire has leased from a third party. This way, it is growing its retail property portfolio, which currently comprises 377 properties worth $7.3 billion.

The addition of new properties, a 1.5% annual rent appraisal, and an occupancy rate of 99.4% helps CT REIT grow its distribution annually.

The dividend stock with the option of a DRIP

CT REIT also offers a dividend reinvestment plan (DRIP). A DRIP gives you more units of the REIT instead of paying cash. As the money stays in the business, the REIT reinvests it to buy new properties. Every penny is reinvested to earn more rent. This gives you confidence that a DRIP can compound your returns.

You could consider opting for a DRIP if you don’t need cash. A four-to-six-year DRIP can increase your monthly payout significantly. Let’s understand with a rough calculation.

Suppose you bought 625 units of CT REIT for $10,000 in January 2000; these units could pay $41.29 per month. If you had put the money in a DRIP, the $41.29 dividend amount would be paid through income-earning DRIP shares.

The real estate downturn accelerated the DRIP as the REIT’s unit price fell. The same dividend could buy more units. In 2025, the monthly cash flow increased to $64.67.

Final takeaway

Now is a good time to buy CT REIT at $15.81 per unit. The REIT can pay cash per month. And if you want more than 3% growth, compounding is a good option.