If you want a Canadian stock that pays you cash every single month and yields close to 10%, Timbercreek Financial (TSX:TF) deserves a spot on your watch list.
I think it is a reasonable buy for income investors who want steady monthly cash. The catch is that you should hold it inside a registered account while maintaining a diversified portfolio.
That is my take. Now let me back it up.
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How high-yield dividend stocks build passive income
Owning companies that pay you a dividend is one of the simplest ways to build a passive income stream. You need to identify and buy a monthly dividend stock to begin receiving a steady, recurring payout.
Here is the math in plain terms. A $10,000 position in a stock yielding 10% pays about $1,000 a year. Split across 12 months, that is roughly $83 landing in your account every month.
| COMPANY | RECENT PRICE | NUMBER OF SHARES | DIVIDEND | TOTAL PAYOUT | FREQUENCY |
| Timbercreek Financial | $6.52 | 1,533 | $0.058 | $89 | Monthly |
Hold the stock in a TFSA (Tax-Free Savings Account), and the dividends arrive tax-free. Own it in a Registered Retirement Savings Account (RRSP), and you defer the tax to a later date.
That is what makes a high-yield monthly payer such an affordable way to create income.
There is one warning worth saying out loud. A yield near 10% signals that the payment carries risk.
What Timbercreek Financial does
Timbercreek is one of Canada’s larger alternative lenders.
The company makes shorter-duration mortgage loans to experienced commercial real estate owners, including apartment buildings, office towers, and retail space in major Canadian cities.
These borrowers want money fast and on flexible terms, and banks are often slow to lend on these deals.
Timbercreek lends against properties that already collect rent, and the rent is used to service these loans. According to the company, that focus on real estate that produces income lowers the chance a borrower stops paying.
Borrowers accept higher interest rates in exchange for speed and flexibility. That is how Timbercreek funds its generous dividend.
Reading the latest results before you buy
In its first quarter of 2026, Timbercreek earned net income of $10.4 million, down from $14.8 million in the year-ago period. Earnings per share slipped to $0.13 from $0.18.
The decline was tied to a $3.7 million charge for expected credit losses tied to a couple of older office and retail loans. Strip that charge out, and the business looked steadier.
Timbercreek reported a distributable income of $0.18 per share, which covered the $0.17 dividend payout in Q1.
It allocated $224.2 million into new loans in Q1, growing the portfolio by 15% year over year. Around 88% of these loans carry floating rates with floors, which protects income when rates fall.
On June 10, Timbercreek said it received approval to buy back up to 8.2 million of its own shares over the coming year, which is equal to 10% of its public float.
Generally, companies initiate a share buyback program when they think the stock is undervalued. Timbercreek currently trades below its book value, at about $0.82 per dollar of net assets.
Analysts, too, remain bullish and expect the Canadian dividend stock to return 8% over the next 12 months. If we adjust for dividends, cumulative returns could be closer to 18%.
The Foolish takeaway
I like Timbercreek as a monthly income holding, not as a get-rich idea.
The 10.5% yield is real, it is paid monthly, and the loans are secured by real estate that earns rent. The buyback and the discount to book value add to the appeal.
The recent credit losses and the high payout ratio are real risks, though. Treat this as a single income component within a diversified portfolio, ideally in a TFSA or RRSP.
If monthly passive income is your goal, Timbercreek belongs on your list.
