When it comes to income investing, there are few things that are as appealing to investors as generating a monthly recurring income. That appeal only rises when that income comes with an impressive 7% yield.
This makes it especially relevant for Canadians seeking reliable passive income.
Most Canadian dividend stocks offer payments on a quarterly cadence. But there are some stocks that pay out on a more frequent monthly schedule.
And yes, there’s one in particular that offers a 7% yield that makes it an appealing choice for investors right now. That stock is Slate Grocery REIT (TSX:SGR.UN), and here’s why investors need to know about this income stock.
Source: Getty Images
What Slate Grocery does
As its name implies, Slate Grocery REIT is a grocery-anchored REIT. Slate’s portfolio is focused entirely on the U.S. market, where it owns properties across 23 states.
These properties are typically shopping centres where a grocery store is the main tenant, surrounded by smaller stores. Those smaller secondary tenants are often complementary businesses like pharmacies, banks, restaurants, doctor’s offices and other service-based businesses.
Grocery stores are among the most defensive retail options on the market. They provide necessity-based products to the communities they serve. People need to buy food irrespective of how the market is doing.
This means that grocers remain open and keep paying rent through downturns. The stores also generate healthy foot traffic to the entire property, providing a lift for those secondary tenants.
The end result is stable rent that flows through to the REIT, and eventually to investors in the form of that 7% yield. This essential‑service foundation is a key reason the REIT appeals to income‑focused investors.
Why the 7% yield and monthly payout stand out
A key reason that investors keep turning to Slate Grocery REIT is for the monthly payout that the REIT offers. Monthly payments help smooth out cash flow, making it easier for investors to plan budgets or cover recurring expenses.
And for those investors who are not ready to draw on that income, that 7% yield provides a more frequent display of compounding at work.
By way of example, let’s consider a $5,000 investment in Slate. For that initial contribution, investors can expect to earn just shy of $350 in annual income. That’s not enough to retire on, but for those investors still building their income portfolio, it is enough to generate a new share each month from reinvestments alone.
Over a longer period, that small investment can snowball into a much larger monthly income.
Put together, the yield and monthly payouts make Slate a practical choice for anyone focused on steady income. For investors prioritizing monthly income, this combination is hard to overlook.
Why Slate warrants a spot on any watchlist
Slate Grocery REIT offers a perfect mix of defensive retail exposure, consistent occupancy, and an impressive yield that stands out in the current market.
The REIT’s focus on necessity‑based retail provides a defensive appeal and stability that long-term income investors can appreciate. Then the monthly payout structure enhances that appeal even further for those who value predictable cash flow.
While no stock is without risk, Slate does offer significant income-producing potential backed by a defensive portfolio. The 7% yield is attractive and means that this is one REIT that’s worth keeping on any investor watchlist.
