Investing in dividend stocks, part of recession-resistant sectors that offer a monthly payout, allows you to create a low-cost passive-income stream in 2025. One such TSX stock is Slate Grocery (TSX:SGR.UN), which pays you a forward yield of almost 8%.
Valued at a market cap of $900 million, Slate Grocery REIT owns and operates grocery-anchored shopping centres in major U.S. metro markets. With more than $2.4 billion in retail space, the real estate investment trust (REIT) aims to capitalize on stable demand while improving operations through rent optimization and occupancy growth.
A strong performance in Q3 of 2025
Slate Grocery REIT posted another solid quarter of operational performance, which demonstrates the resilience of grocery-anchored retail properties amid ongoing economic uncertainty.
In the third quarter (Q3) of 2025, Slate Grocery completed more than 417,000 square feet of leasing, with renewal spreads coming in 15% above expiring rents and new deals signed at 35% above comparable in-place rates.
It reported same-property net operating income growth of 2.7% year over year after adjusting for completed redevelopments. Its portfolio occupancy rate remained steady at 94% while the average in-place rent of US$12.82 per square foot is well below the market average of US$24.09 per square foot. This significant gap provides room for rent hikes as existing leases expire.
Slate Grocery emphasized that its debt structure offers stability in the current interest rate environment. The REIT maintains a weighted-average interest rate of 5%, with over 90% of its debt locked in at fixed rates on a proportionate basis.
Further, the portfolio’s weighted-average capitalization rate exceeds the cost of debt, allowing the REIT to maintain positive leverage while generating growth.
The fundamentals that support grocery-anchored retail continue to strengthen. Recent consumer data indicates that essential goods remain a top spending priority for shoppers over the next three months, reinforcing their defensive nature.
Meanwhile, elevated construction costs and restrictive lending conditions are limiting new retail development, which creates favourable conditions for existing landlords to retain tenants and push rents higher.
Looking ahead, management expects organic growth to continue at a 3% to 4% annual pace. Market rents are rising at rates similar to or slightly higher than in-place rents, indicating that the favourable pricing environment will persist.
With approximately 200 basis points of positive leverage between asset cap rates and financing costs, Slate Grocery appears well-positioned to pursue growth opportunities while maintaining financial stability. The combination of strong leasing momentum, a defensive tenant mix, and meaningful mark-to-market potential suggests the REIT should continue to deliver consistent value creation for unitholders.
Is this TSX dividend stock undervalued?
| COMPANY | RECENT PRICE | NUMBER OF SHARES | DIVIDEND | TOTAL PAYOUT | FREQUENCY |
| Slate Grocery REIT | US$10.84 | 2,306 | US$0.072 | US$166 | Monthly |
Slate Grocery’s ability to generate stable cash flows across market cycles enables it to pay shareholders a monthly dividend of US$0.072 per share, translating to a forward yield of almost 8%.
An investment of $25,000 in this TSX stock will help you buy 2,306 units of the REIT and earn $166 in monthly dividends, which indicates an annual payout of almost $2,000.
Given consensus price targets, Slate Grocery trades at a 11% discount. If we adjust for dividends, cumulative returns could be closer to 19% over the next 12 months.
