A Perfect TFSA Stock: An 8% Yield With Constant Paycheques

If you’re looking for high yield stocks with monthly payouts, real estate investment trusts (REITs) are the pile you want to go looking in. Such securities often offer high yields and almost always pay their dividends monthly. If you hold REITs in your tax-free savings account (TFSA), you don’t even pay taxes on the distributions!

Many well-known Canadian REITs have yields in the 4%–5% range. That’s enough to get substantial passive income coming into your account each and every month. But you can find much higher yields than those. If you’re willing to take a little extra risk by looking in the small cap REIT space, you can find distributions in the double digits!

Of course, such REITs are often riskier than average. Smaller companies are less powerful than their larger peers, lacking the political connections, economies of scale, and institutional lifelines that the latter can count on. Still, for the enterprising investor willing to do his/her homework, smaller REITs can often offer value.

In this article, I will explore one such REIT that may be worth the investment in 2026.

Nexus Industrial REIT

Nexus Industrial REIT (TSX:NXR.UN) is a Canadian industrial REIT that leases out warehouse space to industrial tenants. Examples of Nexus’s lessees’ business operations include:

• Grocery storage and logistics.
• Freight transportation including “last mile” delivery.
• Heavy industry manufacturing.
• Automotive component manufacturing.
• Business-to-business fulfillment.

This is a pretty diversified mix of activities, and crucially, most of it looks relevant and likely to stay around long term. Sometimes, mall REITs and hotel REITs run into trouble because the types of properties they operate, or the areas they operate them in, fall out of fashion. The “death of the mall” was not kind to mall REITs, and urban decay can be just as unkind to hotel REITs.

Industrial REITs, on the other hand, tend to stand the test of time, because companies will always need manufacturing, fulfillment and logistics to get products to end users. While there has been some talk lately about the human beings working in industrial warehouses being forced out of work due to automation, the warehouses themselves remain as essential as ever. So, Nexus REIT looks like it’s in a good place right now.

Performance

By many metrics, Nexus Industrial is performing well right now. The stock boasts a 73% net operating income (NOI) margin and a 34% adjusted funds from operations (AFFO) margin (NOI and AFFO are alternative earnings metrics used just for REITs). The company’s AFFO grew 5.2% in the last 12 months, better than Canadian REITs as a class. Finally, the stock trades at just 12 times AFFO, below average for Canadian REITs. So, NXR.UN looks like a bargain.

Income potential

Before concluding, we should touch on the amount of monthly income you could get by investing in Nexus Industrial (assuming everything goes well). NXR.UN pays a $0.533 monthly dividend, which works out to $0.64 per year. Its unit price is $8.02. So, NXR has roughly an 8% dividend yield. If you invest $100,000 into it, you should get about $8,000 back in annual income. Here’s the math on that.

So, you can get a comparatively large amount of income from Nexus Industrial with a relatively modest sum invested, if all goes well. There are risks here, for sure. But the opportunity merits further research.