You can’t build long-term wealth just by chasing high-growth stocks, as creating a steady stream of income could also play an important role through market ups and downs. That’s why I always prefer holding some quality dividend-paying stocks in my portfolio. The right pick can quietly compound your Tax-Free Savings Account (TFSA) savings while delivering predictable cash flow along the way.
In this article, let’s take a closer look at one such TFSA-friendly Canadian stock that looks really attractive for its stability, income potential, and long-term growth prospects.
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A stable performer backed by real assets
When it comes to consistent income, businesses backed by physical assets often offer an added layer of reliability. That’s exactly what makes Choice Properties Real Estate Investment Trust (TSX:CHP.UN) worth considering.
This real estate investment trust (REIT) owns and manages a large and diversified portfolio of commercial, industrial, retail, and residential properties across Canada. With more than 700 income-producing properties and around 60 million square feet of gross leasable area, it has built a strong presence in the Canadian real estate market.
The company’s main strength lies in its focus on necessity-based, grocery-anchored retail properties. These types of assets tend to remain resilient even during economic slowdowns, helping the company generate stable rental income. On top of that, its growing industrial portfolio adds flexibility and exposure to high-demand logistics markets.
After gaining 11% over the last year, Choice’s stock currently trades at $16.19 per share with a market cap of $5.3 billion. At this market price, it has a 4.8% annualized dividend yield, with monthly payouts.
What the latest numbers tell us
For 2025, the company reported a net loss of $61.2 million compared to net income of $784.4 million in the previous year. This drop was mainly due to fair value adjustments related to Exchangeable Units and its investment in Allied Properties REIT.
However, Choice’s underlying operations remained strong as its funds from operations (FFO) per unit rose 3.6% year-over-year (YoY) to $1.069. This metric is important because it reflects the cash-generating ability of its business.
At the same time, the REIT’s total net operating income (NOI), on a cash basis, increased by 4.7%, while same-asset NOI grew 2.2% YoY. These gains were supported by strong tenant demand and improved occupancy, which reached an impressive 98.2% by year-end.
Financial strength supports stability
Beyond operational growth, liquidity is another strong point for Choice Properties REIT. With approximately $1.5 billion in available credit and a large pool of unencumbered properties valued at $13.8 billion, the company has enough financial flexibility to navigate challenges and invest in growth opportunities.
Now, the REIT expects 2% to 3% YoY growth in same-asset NOI and projects FFO per unit diluted in the range of $1.08 to $1.10 for 2026.
Income investors get a boost
For dividend investors, there’s more good news. The company recently increased its annual distribution to $0.78 per unit from $0.77. While the increase may seem small, it reflects a commitment to delivering consistent income to its unitholders.
Moreover, its focus on stable cash flows, high-quality tenants, and a disciplined growth strategy continues to support its ability to maintain and gradually grow distributions over time.
