One of the best ways to build a passive income stream is within a TFSA, where investments can compound tax-free for decades. The key ingredient to establishing that income stream is selecting the right TFSA stock to power your portfolio.
There’s no shortage of great stocks to choose from on the market, but there is one TFSA stock offering an attractive 7% yield paid monthly. Generating a monthly income stream is a real advantage to investors.
Unlike quarterly payouts, monthly distributions better align with real-world budgets. And for those investors not ready to draw on that income yet, monthly distributions provide a more frequent compounding schedule.
And since every TFSA distribution is tax‑free, the long‑term impact can be significant.
So then, what TFSA stock should you consider right now to start earning those monthly paycheques?
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Meet Slate Grocery REIT
Slate Grocery REIT (TSX: SGR.UN) is a grocery-anchored REIT. The company’s portfolio is focused entirely on the U.S. market and centred around essential-service retail, such as grocers.
Grocery stores are one of the most defensive forms of retail. They generate consistent foot traffic that persists even during economic downturns. That’s because, irrespective of how the market fares, people still need to purchase food and essentials.
That essential nature is a key reason Slate has maintained stable occupancy, and by extension, reliable cash flow.
Because the REIT is anchored by essential‑service tenants, its income profile remains resilient even when broader markets become volatile.
The traffic that those grocery-anchored properties draw in has another advantage. Slate’s properties often have secondary tenants in addition to those larger, grocery-anchored stores.
These smaller, secondary tenants often include restaurants, doctors’ offices, pharmacies, and banks. These provide an additional stream of revenue for the REIT and contribute to the overall traffic stemming from the properties.
Between Slate’s long‑term leases and its diversified tenant base, the REIT is structured to deliver steady income to unitholders, making it an ideal TFSA stock.
Let’s talk about that 7% yield
Slate’s 7% yield is attractive on its own, but what makes it more compelling is the foundation behind it. Slate Grocery REIT’s tenants operate in categories that remain essential regardless of economic cycles. This reduces volatility in rental income and supports the REIT’s ability to maintain those consistent distributions.
For investors who want predictable monthly paycheques, Slate delivers a level of consistency that’s hard to ignore.
As of the time of writing, Slate pays out $1.18 per share, annualized. For investors considering this TFSA stock, even a smaller investment of $7,000 will generate just over $40 each month. That’s enough to generate a few shares each month from reinvestments.
For those investors building a TFSA around passive income, Slate Grocery REIT can serve as a core holding. Its monthly paycheques provide a steady cash flow that can be reinvested tax‑free, accelerating the compounding effect over time.
The REIT also adds diversification to a portfolio, offering exposure to U.S. real estate and essential‑service retail without the need to directly manage properties.
Whether as a standalone income generator or as part of a larger, dividend‑focused strategy, Slate fits naturally as a TFSA stock that’s designed for long‑term, stable returns.
Final thoughts on this TFSA stock
Slate’s attractive 7% yield and dependable monthly distribution can be a valuable addition to any income portfolio.
In my opinion, the REIT’s essential‑service tenants, stable cash flow, and consistent distributions make it a great option to build out a well-diversified portfolio.
