A Tax-Free Savings Account (TFSA) stock with a high dividend yield can be perfect, especially when it gives you steady, predictable income without the tax bite, letting every dollar of that payout stay in your pocket and compound over time.
It turns your TFSA into a little income machine, paying you month after month while you sleep. And when the underlying business is stable and built for the long haul, those tax-free distributions can accelerate your wealth far faster than regular savings ever could. So, let’s look at one to consider on the TSX today.
CRT.UN
CT REIT (TSX:CRT.UN) is one of Canada’s most reliable retail-anchored real estate investment trusts (REITs), built around long-term leases with Canadian Tire and its affiliated banners. The REIT owns hundreds of properties across the country, primarily essential retail locations that tend to perform well even during economic slowdowns.
Because its tenant base is stable, national, and well-established, CRT.UN enjoys predictable rent payments and low vacancy risk, which translates into steady cash flow for investors. It also benefits from strong property locations in suburban and urban markets, where real estate values tend to appreciate over time.
The REIT is structured for resilience, with long lease terms of often 10 to 20 years. This provides built-in stability and inflation protection through contractual rent escalators. Its business model is intentionally conservative, with slow, steady acquisitions and development projects paired with disciplined balance-sheet management. This mix makes CRT.UN appealing to investors who value income consistency and long-term reliability over rapid expansion. The REIT’s relationship with Canadian Tire, one of the country’s most trusted retail brands, further reinforces its credibility and lowers its risk profile.
Into earnings
In recent third-quarter (Q3) earnings, CRT.UN reported continued growth in net operating income of $119.9 million from $113.6 million, driven by contractual rent increases and strong property performance. The REIT maintained high occupancy levels at 99.4%, reflecting the essential nature of its retail tenants. Cash flow remained healthy, supporting its generous distribution and leaving room for ongoing debt reduction.
Management highlighted rising property valuations across its portfolio and reiterated its disciplined approach to capital allocation, prioritizing stability over aggressive expansion. These results underscore why CRT.UN remains one of Canada’s most reliable real estate income vehicles.
The REIT also demonstrated strong financial flexibility, with manageable debt levels and steady funds-from-operations (FFO) growth to $80.5 million. These are key metrics for income investors evaluating payout sustainability. Its steady year-over-year increases in FFO per unit reflect the durability of its rental income, and management reinforced that distributions remain well covered. Even in more volatile economic periods, CRT.UN’s earnings profile remains stable due to its long-term leases and essential retail footprint.
Foolish takeaway
CRT.UN is a near-ideal TFSA pick for anyone seeking a high dividend yield. It offers dependable, tax-free income backed by some of the strongest tenant covenants in the country. Its predictable rent escalators, long-term contracts, and stable tenant base mean distributions are not only sustainable but positioned to grow slowly over time. And right now, here’s what a $7,000 could bring in annually.
| COMPANY | RECENT PRICE | NUMBER OF SHARES | DIVIDEND | ANNUAL TOTAL PAYOUT | FREQUENCY | TOTAL INVESTMENT |
|---|---|---|---|---|---|---|
| CRT.UN | $15.88 | 440 | $0.95 | $418.00 | Monthly | $6,987.20 |
In a TFSA, where every dollar of that income stays tax-sheltered, the compounding effect can be huge, especially for investors holding it for decades. You essentially get a worry-free income engine built on high-quality Canadian real estate, making CRT.UN a standout choice for long-term passive income.
