A TFSA Stock With a 5% Yield and Reliable Monthly Paycheques

TFSA investors looking for dependable monthly passive income may want to take a closer look at this industrial REIT.

Jitendra Parashar

Author Bio Jitendra Parashar is a financial journalist who has been writing for The Motley Fool Canada since June 2020. With more than 13 years of experience in financial journalism, equity research, and market analysis, he helps investors understand market developments and identify long-term investment opportunities. Before joining The Motley Fool Canada, Jitendra spent several years at Market Realist covering U.S. equities, major economic developments, and developments in the automotive and technology industries. He also worked in commodity and currency research at brokerage firms, gaining insight into how economic trends, central bank decisions, and geopolitical events influence financial markets. Jitendra writes for beginner investors, dividend seekers, and Canadians looking to build wealth over the long term. He also contributes to the daily TSX Today series, explaining key Canadian market developments and highlighting news investors should watch. Based in India, Jitendra follows Canadian and U.S. markets closely. Outside of work, he enjoys travelling in the Himalayas, street and nature photography, and exploring programming and artificial intelligence. Education MBA in Finance and International Business Bachelor's degree in Journalism Areas of Expertise Canadian and U.S. financial markets, long-term equity investing, dividend investing, macroeconomic and geopolitical trends, automotive stocks, emerging technologies, and artificial intelligence. Social Media Profiles LinkedIn Muck Rack Favorite Investment Quote “Simplicity is the master key to financial success.” — John C. Bogle

Published May 22, 8:00 pm EDT

If you want to build passive income inside a Tax-Free Savings Account (TFSA), you should ideally own stocks that consistently generate cash flow and reward investors with regular payouts. That’s one of the most important reasons why many Canadian investors are drawn toward real estate investment trusts (REITs), especially those operating in sectors with strong long-term demand trends.

Industrial real estate could be a great example of a resilient income-generating sector, especially as the continued growth of e-commerce, logistics, and supply chain infrastructure drives steady demand for warehouses and distribution facilities. And one of the best stocks that continues to gain momentum in this area is Dream Industrial Real Estate Investment Trust (TSX: DIR.UN).

In this article, I’ll explain why this monthly-paying REIT could be a strong TFSA stock to buy right now.

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A top monthly-paying REIT for TFSA investors

If you don’t know it already, Dream Industrial REIT is a Toronto-based company that mainly focuses on owning and operating industrial properties across Canada, Europe, and the United States. Its portfolio includes distribution centres, urban logistics facilities, and light industrial buildings located in key global markets.

Its shares have jumped 33% over the last year to currently trade at $13.95 apiece with a market cap of roughly $3.9 billion. At the same time, the REIT offers an attractive monthly distribution yield of about 5%.

Strong leasing activity and rising rents are fueling growth

One of the biggest drivers behind Dream Industrial’s recent rally has been its strong leasing activity. In the latest quarter (ended in March), the company’s net operating income from competitive properties climbed 9% year-over-year (YoY), and its net rental income rose 7% from a year ago.

The REIT’s portfolio now includes roughly 343 industrial properties totaling around 74.1 million square feet of gross leasable area (GLA) spread across several high-demand markets.

Financially, the business continues generating stable cash flow. In the March quarter, its diluted funds from operations per unit rose by 2% YoY, reflecting the REIT’s ability to grow earnings even with expanding operations. At the same time, the company continues to be active on the acquisition front. Dream Industrial completed more than $150 million worth of acquisitions in the latest quarter, adding over one million square feet of GLA to its portfolio.

Moreover, its occupancy levels remained healthy. In Canada, its in-place and committed occupancy climbed to 96.8%, while the company’s European portfolio maintained occupancy around 95%.

Expanding operations could support long-term monthly income

Strong rental growth has become another major tailwind for Dream Industrial REIT in recent quarters. The REIT signed more than 1.8 million square feet of lease renewals and new leases through April 30, at an average rental spread of 26.4%. That pricing power highlights the continued demand for industrial properties across many of its key markets.

Going forward, Dream Industrial remains focused on further expanding through quality acquisitions and private venture growth opportunities. Interestingly, the company currently has more than $500 million of acquisitions either firm or under exclusivity. Given all these positive factors, Dream Industrial REIT remains an attractive monthly dividend stock for TFSA investors in 2026.