Passive income has become increasingly important in today’s uncertain economic environment. In addition to providing greater financial stability, it can help offset inflationary pressures. Investors can also boost their long-term return potential by reinvesting passive income and taking advantage of compounding. In this context, monthly dividend-paying stocks stand out as an attractive option, offering a steady income stream and the potential for capital appreciation.
Among these investments, real estate investment trusts (REITs) are especially appealing for income-focused investors. With REITs required to distribute a significant portion of their taxable income to unitholders, they typically offer attractive dividend yields. Moreover, holding these investments in a Tax-Free Savings Account (TFSA) allows investors to earn this income without paying taxes on distributions or capital gains.
With that in mind, let’s evaluate the financial performance, growth outlook, dividend yield, and valuation of CT Real Estate Investment Trust (TSX: CRT.UN) to identify attractive opportunities for income-seeking investors.
Source: Getty Images
CT REIT’s first-quarter performance
CT REIT owns and operates 378 income-producing properties spanning 31.7 million square feet of gross leasable area across 10 Canadian provinces and two territories. Retail properties account for 85.6% of its portfolio, while industrial assets make up the remaining 14.4%.
Meanwhile, Canadian Tire remains the REIT’s largest tenant, leasing 29.2 million square feet and representing 92.1% of the total gross leasable area. Supported by a high-quality, retail-focused tenant base, with approximately 95.9% of annualized base minimum rent generated from investment-grade tenants, CT REIT continues to maintain strong occupancy levels regardless of broader economic conditions. Its occupancy rate stood at an impressive 99.4% at the end of the first quarter. Additionally, the REIT benefits from a lean operating structure, with general and administrative expenses accounting for just 2.5% of total revenue.
The REIT also delivered healthy first-quarter results earlier this month, with property revenue increasing 4.8% year over year to $157.6 million. Net operating income (NOI) rose 4.7% to $124.3 million, driven by acquisitions, completed income-producing developments last year, and contractual rent escalations. Same-property NOI also climbed 2.3%, supported by rent escalations, recoveries on capital expenditures, and intensification projects completed last year.
Further, funds from operations (FFO) increased 4.2% to $84.5 million. Excluding special items, adjusted funds from operations (AFFO) came in at $78.1 million, reflecting a 3.6% year-over-year increase, while AFFO per unit rose 2.7% to $1.30. With approximately $304 million in available liquidity, CT REIT appears well-positioned to support its future growth and expansion initiatives.
CT REIT’s growth prospects
Amid steady economic growth and supply constraints caused by rising construction costs, demand for retail space in Canada has remained resilient, creating a favourable backdrop for CT REIT. Capitalizing on this environment, the REIT continues to expand its portfolio through development projects totalling 629,000 square feet and valued at approximately $380 million. Combined with built-in contractual rent escalations, these expansion initiatives should support steady financial growth and strengthen the REIT’s ability to sustain and grow its future dividend payouts.
Investors’ takeaway
Supported by dependable financial performance and healthy cash flows, CT REIT has increased its distribution 10 times since 2017, delivering cumulative dividend growth of 40.2%. Even with these hikes, the REIT has steadily strengthened its payout profile, with its AFFO payout ratio improving from 76.2% in 2017 to 72.5% in the first quarter of 2026. The REIT currently pays a monthly distribution of $0.08 per unit, yielding 5.6% on an attractive forward basis.
| COMPANY | RECENT PRICE | NUMBER OF SHARES | INVESTMENT | DIVIDEND | TOTAL PAYOUT | FREQUENCY |
| CRT.UN | $17.51 | 799 | $13,990.49 | $0.0818 | $65.36 | Monthly |
| Total | $784.3 | Annualized payout |
Given its high-quality tenant base, a history of consistent distribution growth, and solid long-term expansion prospects, CT REIT appears well-positioned for income-focused investors seeking stable passive income. Based on its current yield, a $14,000 investment in the stock could generate approximately $65.35 in monthly passive income, or roughly $784.30 annually.
