A dividend stock paying cash every single month at a yield of over 7% is enough to make any income investor take notice. SmartCentres REIT (TSX: SRU.UN), one of Canada’s largest retail-focused real estate investment trusts, is sitting in that category right now. At a forward annual dividend of $1.85 per unit and a yield around 7.2%, it’s about as close as you get to a steady monthly paycheque on the TSX.
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What’s happening now
Over the past year, SmartCentres has navigated a changing retail environment. Consumer spending patterns have shifted, and interest rates have stayed higher for longer, adding pressure to the real estate sector. The trust’s units are still up about 8% over the past 12 months, but that gain has been a grind, not a sprint. Despite the macro headwinds, SmartCentres has held firm on its dividend, a streak that income investors value above almost anything else.
The second quarter of 2025 showed both the challenges and strengths in its model. Revenue came in at $235.3 million, down slightly from last year’s Q2. Net income available to unitholders was $61.6 million, translating to $0.42 per unit. Funds from operations, a key metric for REITs, were $0.54 per unit, compared to $0.56 in the same quarter of 2024. Occupancy remained strong, and the tenant base is anchored by Walmart, which continues to draw traffic to the trust’s properties.
One reason the monthly payout feels reliable is that SmartCentres structures its portfolio for stability. Nearly all of its retail properties are anchored by necessity-based tenants – think grocery, pharmacy, and big-box retail. These tend to keep paying rent even in tougher economic times. That’s part of why the trust has managed to maintain its dividend through various cycles.
More to come
The trust is also pushing ahead with diversification. Development projects are expanding its footprint beyond pure retail, adding residential, office, and self-storage components in certain locations. This mixed-use approach is aimed at boosting long-term growth and making earnings less dependent on retail rents alone. Some of these developments take years to come online, but they can add meaningful cash flow once complete.
Right now, valuation looks reasonable. Units trade at a forward price-to-earnings ratio in the low teens and below book value, at about 0.85 times. For income investors, that combination of discount pricing and a high yield can be appealing. But it’s worth noting that the payout ratio based on earnings is high, well above 100%. That’s common for REITs, which distribute most of their cash flow, but it still means the trust needs to keep cash generation healthy to support distributions.
There are risks worth considering. Higher interest rates make refinancing debt more expensive, and SmartCentres carries over $5 billion in debt on its balance sheet. While most of that is fixed-rate, the cost of rolling it over could rise if rates stay elevated. Retail real estate also faces the long-term challenge of e-commerce growth, which can chip away at certain types of store traffic. The trust has mitigated that with its focus on necessity-based retail, but the trend is still one to watch.
Foolish takeaway
Even with those risks, the appeal here is clear. A monthly yield over 7% means you can generate meaningful cash flow from a relatively modest investment. For example, $15,000 invested today could produce more than $1,065 a year in monthly distributions. For retirees or anyone building an income stream, that’s not just attractive, it’s the kind of steady inflow that can cover real bills.
| COMPANY | RECENT PRICE | NUMBER OF SHARES | DIVIDEND | TOTAL PAYOUT | FREQUENCY | TOTAL INVESTMENT |
|---|---|---|---|---|---|---|
| SRU.UN | $25.97 | 577 | $1.85 | $1,067.45 | Monthly | $14,983.69 |
The past year shows SmartCentres isn’t immune to economic and market shifts, but it has proven resilient. The combination of stable tenants, a long dividend history, and strategic diversification means it could keep delivering that monthly cash for years to come. If you’re looking to build a portfolio that pays you regularly, this REIT is worth a spot on the watchlist, especially while yields are this high.
