The Top TFSA Stock for Monthly Income in 2026

Discover the top TFSA stock for monthly passive income with our analysis of this REIT.

Key Points
  • SmartCentres REIT is an ideal long-term holding for TFSA investors.
  • The current dividend yield is about 6.7%, and owners receive monthly payouts.
  • Walmart is the REIT's most important tenant, and the retailer is building dozens of new stores in Canada.

Motley Fool Canada Chief Investment Officer Iain Butler calls SmartCentres REIT (TSX: SRU.UN) a “perfect” stock to buy and hold in a TFSA for years to come. Hear him explain why in less than five minutes.

Prefer to read? There’s a transcript below.

Nick Sciple: I’m Motley Fool Canada Senior Analyst Nick Sciple, and this is The Five-Minute Major, here to make you a smarter investor in about five minutes. Today, we’re discussing what could be one of the best TFSA stock options for your monthly passive income. The company is SmartCentres REIT, Walmart’s landlord throughout Canada. My guest today is Motley Fool Canada Chief Investment Officer Iain Butler. Iain, thanks for joining me.

Iain Butler: Always a pleasure to be here.

Nick: If you were looking to add reliable monthly income to your TFSA right now, and lots of people are, why does SmartCentres REIT stand out to you as a strong contender to have on your radar?

top tfsa stock for monthly passive income 2026

SmartCentres REIT is a ‘perfect, perfect, perfect’ idea for TFSA investors

Iain: That’s right, and rightfully so. It’s a tremendous tool that we Canadian investors have, the TFSA, and this is a perfect, perfect, perfect idea to just stick in there and leave it alone for years. So SmartCentres is anchored by necessity-based retail operations, and these operations provide tremendous stability in most, in almost all, economic environments outside a pandemic, which hopefully we don’t see again. Even then, this is a company that’s skated by relatively unscathed. So, strong results have been posted recently. They’ve got an industry-leading 98.6% occupancy rate.

And the dividend yield is currently about 6.7%, and that is a dividend that is paid monthly.

The tenant base, as indicated, is super resilient, anchored by big-name brands that perform well, regardless of the economic backdrop. These are brands that people go to every day, day in and day out.

The big name behind this company is Walmart. SmartCentres was actually born to be Walmart’s landlord, essentially, when Walmart came to Canada so many years ago. Walmart continues to be the anchor tenant for this company, and to SmartCentre’s benefit. They’ve got a very unique relationship there.

Growth potential for SRU.UN and its dividend

Beyond retail, this is a REIT that has been expanding elsewhere. They’ve recently opened three new self-storage facilities, bringing their total up to 14, and they’ve got some residential development going on. They own a big swath of land at the north end of Toronto, the city Vaughan. They’ve got a condo tower, which is already 93% pre-sold. This property is right adjacent to a newly constructed public transit hub. There’s a new subway stop there. This is sort of the next leg in SmartCentre’s evolution, this development of sort of mixed-use property.

Nick: You talked about SmartCentre’s strong history of dividend payments, really great numbers when you look at what you’re looking for from a REIT, great tenants. If you look to the future of those tenants looking to spend more in Canada, Walmart recently announced a $6.5 billion expansion. What does that mean for SmartCentre’s unit holders?

Iain: This is a story anchored by Walmart. Walmart accounts for about 23% of rental revenue for SmartCentre. And Walmart is building dozens of new stores, starting with five supercenters by 2027.

This is just gonna drive major anchor tenant demand and foot traffic to these properties.

The Walmart strategy builds on a previous $3.5 billion modernization investment, and it just shows that Walmart’s gonna keep growing, and they’re gonna bring SmartCentre right along with it. So, this is a great combination of excellent current dividend yield, 6.7%, and a significant opportunity for ongoing growth to those dividends, but just from a company basis as well, which is perfectly suited to sticking in one’s TFSA and just leaving it alone.

Nick: That’s right, so if you’re looking for monthly income, this may not be the biggest performer in your portfolio in terms of percentage return, but reliable income checks each month, with really a growth story that’s still intact.

Iain, thanks so much for joining us for this edition of The Five-Minute Major. Reminder to our viewers, if you want more stock ideas from us, click on the icon in the upper right of your screen. Thanks for joining us for this episode of The Five-Minute Major. Hope to see you next time.

Fool contributor Iain Butler has positions in SmartCentres Real Estate Investment Trust. Fool contributor Nicholas Sciple has no position in any of the stocks mentioned. The Motley Fool recommends SmartCentres Real Estate Investment Trust. The Motley Fool has a disclosure policy.

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