The vast majority of TSX dividend stocks distribute payments quarterly. However, a select few, including real estate investment trusts (REITs), break from the standard practice. Instead, they pay monthly, providing income investors with the consistent cash flow to help cover recurring expenses.
One standout among these monthly payers is Freehold Royalties (TSX: FRU) in the energy sector. The beauty of its payout frequency is that you can aim for a specific dollar amount each month. FRU currently trades at $16.91 per share and pays a generous 6.4% dividend.
If the goal is to earn $500 each month, the fastest way to hit it is to purchase 5,571 shares or invest $94,205.60. Fortunately, the massive capital outlay isn’t the only approach for regular investors. The power of compounding, through consistent accumulation of shares and dividend reinvestment, will eventually help reach the goal.
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Build your monthly cheque
Instead of a large sum upfront, use the staircase approach. It means you start with how much money you have. Assuming the starting point is $7,000 or the 2026 Tax-Free Savings Account (TFSA) annual contribution limit. The amount can buy approximately 414 shares.
The monthly dividend is $37.16, which is enough to buy 2.2 new shares every month (dividend reinvestment). If you can frontload the TFSA annual contribution limit on day one of each year, you get an extra 11 months of compounding growth every single year. It assumes the price and yield remain constant.
The timeline to reach $500 during the acceleration phase is 9 years and 1 month, or roughly 109 months. Your total out-of-pocket contribution is less than $94,205. More than $24,000 of it is free capital derived from dividends paid along the way. By the time you reach your target, you’ll have a nearly $95,000 asset working for you for the long term.
Pure-play royalty company
Freehold Royalties offers exposure to Canada’s heavyweight energy sector. The $2.8 billion company owns land and collects royalties from 380 industry operators. As a pure-play royalty company, the business is low-risk, with “no” capital, operating, or abandonment costs.
The land portfolio in North America comprises crude and natural gas assets in premier basins. In 2025, royalty and other revenue increased 1.3% to $313.5 million compared with 2024, along with a 9% year-over-year increase in production to average 16,294 barrels of oil equivalent per day (boe/d). However, net income declined 38.6% to $91.8 million from a year ago.
Performance-wise, FRU is up 13% year to date. Freehold is generally sensitive to commodity prices as its revenues are directly linked to oil and natural gas prices. The spike in oil prices in 2026 will drive royalties higher. A low-price environment can threaten monthly payouts.
I checked the dividend track record and found out that FRU hasn’t missed a monthly dividend payment since 1999. Also, management targets a 60% long-term payout ratio.
Hit your income goal
Building a $500 monthly income stream is achievable through the right stock and disciplined strategy. Dividend reinvestment replaces the need for massive upfront capital. By accumulating shares using the staircase approach, you’ll hit your income goal in a relatively shorter period.
This table illustrates the “staircase approach” in action. Notice how the growth in monthly income accelerates in the later years as your total share count begins to do more heavy lifting than your annual contributions.
