If you’re finding it difficult to generate meaningful passive income from traditional savings accounts or low-yield investments, monthly dividend stocks may be worth a closer look. Companies that provide dependable monthly cash flow could help investors create a steadier income stream while still offering long-term growth potential.
That’s exactly why I prefer to keep some top real estate investment trusts (REITs) on my radar because they distribute cash every month. The right REIT can offer steady cash flow, resilient operations, and the opportunity for capital appreciation over time.
One area of the real estate market that has remained especially stable is grocery-anchored retail properties. No matter how the economy performs, consumers continue spending on essentials, which helps support consistent demand for these types of properties. That’s one reason Slate Grocery REIT (TSX:SGR.UN) could be worth a closer look right now for income-focused investors. In this article, I’ll explain why this monthly-paying TSX stock could deserve a spot on investors’ radar.
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Slate Grocery REIT stock
If you don’t know it already, Slate Grocery REIT is a Canadian REIT focused on owning and operating grocery-anchored real estate properties across the United States. Its portfolio includes several strategically located retail centres in major U.S. metro markets.
More importantly, the company’s focus on necessity-based retail gives it a level of resilience that many other commercial real estate segments lack. Grocery stores tend to generate stable traffic regardless of broader economic conditions, helping support occupancy and rental income.
Slate’s shares have climbed more than 19% over the last nine months to currently trade at $16.93 apiece, giving the company a market cap of roughly $1 billion. It also offers an attractive dividend yield of roughly 7% at the current market price, with a monthly distribution.
Strong pricing power
One of the biggest drivers behind the REIT’s recent performance has been its strong leasing activity. During the first quarter alone, Slate completed more than 725,000 square feet of leasing activity.
Even more encouraging is the strength of its rental spreads. In the latest quarter, the company’s lease renewals were completed at rents nearly 19% above expiring rates, while new leases were signed at rates roughly 49% higher than comparable in-place rents. That pricing power highlights the demand for well-located grocery-anchored retail properties.
Solid financial performance supports the dividend
Slate Grocery REIT’s latest financial results also reflected the strength of its operations. In the first quarter, rental revenue increased 11.8% year-over-year (YoY) to US$59.3 million. Its net operating income (NOI) climbed 3% from a year ago to US$42.5 million as the company continued balancing revenue growth with disciplined cost management. As a result, Slate’s net profit jumped 17.5% YoY last quarter to US$18.9 million.
Another encouraging sign for long-term investors is the REIT’s same-property NOI growth of 2.1% over the trailing 12 months. That increase came despite occupancy remaining relatively stable at 94.4%, suggesting the REIT continues finding ways to improve profitability within its existing portfolio.
There is still room for future rental growth
Slate Grocery REIT still appears to have room for future rental growth. Its average in-place rent currently sits at US$12.98 per square foot, which remains well below the estimated market average of US$24.59 per square foot.
The REIT also maintains a relatively stable balance sheet. Around 90% of its debt carries fixed interest rates, helping reduce the firm’s exposure to future interest rate volatility as its weighted average interest rate remains near 5%.
Meanwhile, Slate continues to focus on acquiring additional high-quality grocery-anchored properties in strategic locations. This disciplined growth strategy could help strengthen long-term cash flow and support future distribution stability. That’s why Slate Grocery REIT combines an attractive yield, resilient property portfolio, and long-term growth potential, making it worth watching closely.
