If there’s one thing investors crave in a volatile market, it’s certainty. While no investment is completely immune to turbulence, Timbercreek Financial (TSX:TF) has built a reputation for delivering something close: a steady, high-yield payout you can count on every month. Right now, that payout works out to an impressive yield of around 9%, and it comes in cash monthly. For income-focused investors, that’s a hard combination to beat.
About TF
The past year has been anything but smooth for markets. Inflation worries, shifting interest rates, and tariff tensions have sent volatility soaring. Yet Timbercreek has kept its monthly dividend intact, even as other companies trimmed payouts. Over the past 12 months, the dividend stock has traded in a range between $5.91 and $8.29, weathering economic uncertainty while maintaining an attractive yield. Today, with shares hovering near $7.63, the forward annual dividend rate sits at $0.69 per share, translating into that eye-catching 9% yield.
Timbercreek isn’t your typical dividend payer. As a commercial real estate lender with a focus on multi-family residential properties, it earns interest income on a portfolio of mortgages. This business model has its advantages in choppy economic waters as multi-family rental housing tends to remain in demand even when the broader economy slows.
Timbercreek’s portfolio is built to be resilient. In Q2 2025, 87.4% of its loans were variable rate with interest rate floors. This means its income doesn’t drop as sharply when the Bank of Canada cuts rates. In fact, while the BoC prime rate fell 2.3% year over year, Timbercreek’s weighted average interest rate dipped just 1.2%.
More to come
The second quarter also showed that Timbercreek’s lending pipeline remains healthy. The net mortgage investment portfolio grew to $1.1 billion, up $34.8 million from the previous quarter and 11% from a year ago. New loan originations were stronger toward the end of the quarter, suggesting momentum could carry into the back half of the year. The dividend stock also made notable progress on resolving problematic staged loans, freeing up over $80 million in capital between Q2 and July to deploy into higher-yielding opportunities.
That’s not to say the year has been without challenges. Net investment income slipped to $25.2 million from $26.4 million in Q2 2024, and net income fell to $12.4 million from $15.4 million. Distributable income dropped to $14.6 million, down from $16.3 million a year earlier. The payout ratio also climbed to 97.8% from 87.8%, a sign that dividends are consuming almost all available distributable income. While this high payout ratio supports the current yield, it leaves little room for error if earnings face further pressure.
Still, management is confident in the outlook. CEO Blair Tamblyn described the quarter’s performance as solid and pointed to stable commercial real estate conditions in Timbercreek’s core markets. With rates settling into a “more typical range” and the dividend stock’s lending discipline intact, the path forward appears constructive, at least for now. Investors should keep an eye on the tariff situation, as management noted it could affect certain borrowers, though multi-family residential lending is expected to remain resilient.
Bottom line
!Valuation-wise, Timbercreek trades at under book value, with a price-to-book ratio of 0.93 and a forward P/E of just over 11. That’s a reasonable price for a lender paying a near double-digit yield, especially given its stable asset base. And right now, a $7,000 investment could bring in about $630 annually, or $52 each month!
| COMPANY | RECENT PRICE | NUMBER OF SHARES | DIVIDEND | TOTAL PAYOUT | FREQUENCY | TOTAL INVESTMENT |
|---|---|---|---|---|---|---|
| TF.TO | $7.67 | 912 | $0.69 | $629.28 | Monthly | $6,992.04 |
For income seekers, the appeal is straightforward: a high monthly cash payout from a company with a defensible niche. The trade-off is that growth prospects are modest, and earnings can fluctuate with lending spreads and real estate conditions. In a market full of uncertainty, Timbercreek offers something rare: a predictable, rich monthly cheque. Just remember that high yields come with high responsibility for management to keep delivering. If they do, this could remain a near-perfect income stock in an imperfect market.
