Consistent, stable cash flow is the characteristic that dividend stocks must have to win income-focused investors over. Stable cash flows also serve as incentives to maintain investors’ loyalty for years, if not forever. Some may even offer substantial capital gain through price appreciation.
However, if you want a pure but strong dividend power play, discover Timbercreek Financial (TSX: TF) in the financial services sector. This financial stock trades at $7.65 per share and continues to outperform the broad market. The year-to-date gain is 13.6%-plus versus the TSX’s 9.3%-plus. Suppose you invest today; the dividend yield is a juicy 9.1%. Moreover, the payout frequency is monthly.
Timbercreek Financial is a non-bank lender providing short-term structured financing solutions to commercial real estate investors. This $633 million company extends commercial mortgages secured by income-producing assets. The conservative lending strategy has enabled the company to sustain dividend payments.
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Unbroken streak
The unbroken streak of monthly cash payouts since 2016 indicates reliability, regardless of the interest rate environment. Investing in commercial mortgages helps protect investor capital. Moreover, it allows Timbercreek to enhance the performance and diversification of its fixed income portfolios with less volatility.
Suppose you invest today; the dividend yield is a juicy 9.1%. Moreover, the payout frequency is monthly. A $26,453.70 investment (3,458 shares) will generate $200.17 in monthly cash flow ($0.0575 per share).
Bridge mortgages
Currently, the loan term is less than four years, while the weighted average loan-to-value is 66.2%. The commercial portfolio consists of multi-residential, retail, and office properties. Notably, 88.3% are first mortgages. The concentration on income-producing, cash-flowing properties is an integral part of Timbercreek’s risk management strategy.
Timbercreek Financial is the go-to lender of real estate investors needing short-term “bridge” mortgages. The loan purpose varies, from property repairs and redevelopment to purchasing another investment. Often, the clients obtain traditional bank mortgages with lower rates and longer terms. They use the loan proceeds to pay off Timbercreek Financial.
Tariffs and the potential impact on some borrowers are ongoing concerns. Fortunately, according to Timbercreek, the core asset multi-family residential portfolio is relatively well protected from any near-term implications. The transaction pipeline remains strong, although delays may occur due to elevated market volatility.
Robust transaction pipeline
In Q1 2025, net mortgage investments and net income increased 1% and 2.8% year-over-year respectively to $1.1 billion and $14.8 million. Blair Tamblyn, CEO of Timbercreek Financial, said, “It was a solid first quarter, with healthy income levels allowing us to build on our long-term track record of stable monthly dividends that deliver a premium yield to shareholders.” He notes the resiliency of the core asset classes and management’s time-tested strategy.
Likewise, the weighted average interest rate (WAIR) on the portfolio remains resilient. A high percentage of variable-rate loans have the protection of interest rate floors. At the quarter’s end, variable-rate loans with rate floors represented 84.8% of the portfolio, while 87.8% are currently at their floor rates.
Key enticements
Timbercreek Financial is a top alternative asset class investment manager. Its service-oriented approach and more flexible terms attract commercial real estate investors. The strong risk-adjusted yields and uninterrupted monthly cash dividends are enticements for income-oriented investors. At less than $10 per share, you get the most of your money.
