Who doesn’t want to see their Tax-Free Savings Account (TFSA) turning into a monthly income engine? The trick is finding a quality stock that keeps paying consistently, even when the stock market is going through some tough times.
Northwest Healthcare Properties REIT (TSX:NWH.UN) has faced its share of challenges of late, but it’s now showing progress in all the right places. Most importantly, its key properties are still bringing in rent, and its tenants continue to meet lease obligations.
In this article, I’ll tell you how Northwest’s 7.5% annualized yield and strategic changes could turn it into a smart TFSA pick for anyone seeking monthly income that doesn’t feel like a gamble.
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This monthly dividend stock could fit right into your TFSA income plan
In short, Northwest Healthcare Properties REIT owns and manages medical office buildings, hospitals, and clinics across Canada, Europe, Brazil, and Australasia.
At the time of writing, this monthly dividend stock trades at $4.84 per share, giving it a market cap of $1.2 billion. At this market price, the real estate investment trust (REIT) offers an eye-popping 7.5% annualized dividend yield, which is among the highest for Canadian-listed REITs. Even after a few years of share price weakness, the company is making a steady comeback.
Why recent changes are turning heads again
Interestingly, Northwest’s latest quarterly results showed a shift in momentum that’s worth noting. Although the company’s total revenue fell 16.9% year over year due to the sale of non-core assets, its same property net operating income actually increased 2.8% from a year ago, with consistent growth across all regions. This clearly shows that its core portfolio remains strong despite the ongoing asset sales.
More importantly, Northwest turned a net profit of $32.6 million last quarter, compared to a $127 million loss in the same quarter of the previous year. That jump came from lower interest expenses, gains on property values, and foreign exchange tailwinds.
Strengthening its balance sheet for long-term stability
In efforts to boost its profitability and stabilize its operations, Northwest is currently focusing on cleaning up its balance sheet. By June 30, it had completed over $282 million in asset sales, including its full exit from Assura and the sale of properties in North America, Europe, and Australasia. The REIT used the proceeds from these deals to pay down debt and improve liquidity.
Recently, the company also extended its revolving credit facility to 2027 and cut borrowing costs by 65 basis points. Even with challenges like rent deferral arrangements from a major tenant in Australia, Northwest continues to collect rent and expects all deferrals to be repaid by early 2026.
Why this REIT is still worth a spot in your TFSA
From a long-term perspective, what sets Northwest apart is its portfolio quality and consistent rent income. With 168 properties, 15.8 million square feet of leasable area, and a 97% occupancy rate, it remains one of the most stable real estate stocks on the TSX.
Its leases come with built-in inflation adjustments, a long average term of 13.5 years, and many tenants backed by government support. That kind of reliability is hard to find.
Add in the improved payout ratio, asset optimization, and better debt profile, and Northwest Healthcare Properties REIT clearly looks like a go-to TFSA monthly income stock.
