If your goal is to generate regular income from your Tax-Free Savings Account (TFSA), monthly dividend stocks could be a simple and effective option. While many stocks may offer high yields, not all of them can sustain those payouts over the long term. That’s why it’s important for long-term investors to carefully understand the underlying fundamentals of a business before committing capital to it.
In this article, I’ll highlight one top TFSA stock that currently offers a 6.5% dividend yield with monthly payouts and explain why it could be a practical choice for income-focused investors right now.
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A top monthly dividend stock for your TFSA
For investors focused on building steady income within a TFSA, real estate investment trusts (REITs) could be worth considering – and SmartCentres Real Estate Investment Trust (TSX:SRU.UN) continues to stand out in that sector. This Vaughan-headquartered REIT has long been known for its retail properties, but that’s only part of the story today.
It now invests in a mix of assets, including residential developments, self-storage facilities, industrial spaces, and seniors’ housing. This shift helps it reduce reliance on retail while opening up new growth opportunities.
SmartCentres stock currently trades at $28.34 with a market cap of about $4.1 billion. It also offers a 6.5% annualized dividend yield, paid monthly, making it really attractive for income-focused investors.
Strong occupancy and leasing momentum
Despite macroeconomic uncertainties, SmartCentres has continued to show operational strength in recent quarters. Its portfolio maintains a high occupancy rate of 98.6%, which reflects consistent demand for its properties.
At the same time, its leasing activity has also been solid. In 2025, the trust leased 430,000 square feet of space, with rental rates on lease extensions increasing by 6.3% year over year (YoY). This helped SmartCentres drive same-property net operating income higher, which rose 3.7% for the year and 5.6% when excluding anchor tenants. This stable leasing performance is important for a REIT, as it directly supports rental income and long-term stability.
Financial performance remains stable
SmartCentres REIT’s net rental income reached $143.6 million in the fourth quarter of 2025, up 1.4% YoY. At the same time, its funds from operations, which is considered a key measure of a REIT’s cash-generating ability, came in at $0.54 per share, showing a slight YoY improvement.
These increases clearly reflect stability – something many investors value in income-focused investments.
Growth driven by development projects
Another interesting aspect of SmartCentres is its strong development pipeline, as it’s actively investing in projects that can drive future income. In 2025, it opened three new self-storage facilities and has four more under construction. These assets are expected to continue witnessing stable demand and strengthen its margins in the years to come.
On the residential side, its projects like the Vaughan NW townhomes are nearing completion, while its ArtWalk condo development is progressing, with initial closings expected in 2027.
Meanwhile, the expansion of Toronto Premium Outlets is another key growth initiative, adding 85,000 square feet of new space to its portfolio along with a multi-level parking structure.
Why this monthly dividend stock fits well in a TFSA
For TFSA investors, the appeal of SmartCentres REIT comes down to consistency. The monthly dividend provides regular income, while its diversified portfolio supports long-term stability and growth.
Its shift toward mixed-use developments and alternative real estate assets also adds a growth factor. This means investors are not just collecting income but also benefiting from its potential asset appreciation over time.
