The stock market bull run has lowered the dividend yields of all safe dividend stocks. A 6% yield, which was once the average, is now a luxury. The new average yield from dividend kings is 4%. In this bullish market, there is a stock that still offers a 7% yield, perfect for Tax-Free Savings Account (TFSA) rebalancing.
Source: Getty Images
A TFSA pick yielding a 7% dividend
Slate Grocery REIT (TSX:SGR.UN) has not changed its distribution per share. However, Canadian investors benefit from the exchange rate. Let’s understand how.
Slate Grocery REIT owns and leases 115 properties in the United States. These properties are retail stores, mostly occupied by grocers such as Kroger and Walmart. The American retail market has a limited supply with only 4% vacancy. The limited supply of retail stores enables Slate Grocery to increase its rent on renewal.
In the first quarter of 2026, the REIT renewed expiring leases for 18.9% higher rent. New occupancy was leased 49% above the comparable average in-place rent. The higher renewals increase its operating income from the same property. Since the REIT earns its rent in US dollars, it pays dividends in US dollars. However, Canadian investors get dividends in Canadian dollars and benefit from the exchange rate difference.
How Slate Grocery REIT can strengthen your TFSA portfolio
The REIT’s strong fundamentals assure you of its distributions. It gives you exposure to the United States markets, helping you diversify your portfolio. Its exposure to grocery tenants makes it a defensive play in an economic downturn. Dividend, diversification, and defensive features of this stock make it a perfect TFSA pick.
However, it may not be efficient to use your $7,000 TFSA contribution limit on just a 7% annual yield. Instead, that contribution should be used on growth stocks that can give a 15–20% average annual return. Then, how to invest in Slate Grocery REIT, which is currently offering 6.9% yield.
You can use this stock for rebalancing. Suppose you have your TFSA portfolio invested in growth stocks like Celestica that gave robust returns, and now you wish to book some profits. The money earned from the share sale can be invested in Slate Grocery REIT to build passive income.
If you don’t need the payout, you can use the dividend to buy another dividend or growth stock and take advantage of dollar-cost averaging.
$10,000 invested in this 7% yielder
A $10,000 investment in Slate Grocery REIT can buy 573 units that will pay $693.30 in annual dividends, or $57.70 in monthly distributions. There are several stocks under $50 that can give you a dividend.
| Stock | Average Stock Price in May | Dividend per Share | Number of Shares Bought From $10,000 | Total Dividend Amount | Monthly Dividend |
| SGR.UN | $17.44 | $1.21 | 573 | $693.33 | $57.78 |
You could consider compounding these payouts by investing them in dividend stocks, like Freehold Properties, or opportunistic growth stocks, like Ballard Power Systems. These may be risky investments, but your hard-earned money has already returned profits, which are earning a monthly income. This payout gives you room to take risks. Trading at $5.20 a share, you can buy 10 shares of Ballard Power Systems with one payout and over 100 shares in a year, taking advantage of dollar-cost averaging.
When Ballard’s hydrogen fuel cell technology sees widespread adoption, or it reports a net profit, the stock could surge 70–100% and beyond.
