Many investors use a Tax-Free Savings Account (TFSA) to build wealth while keeping future income sheltered from tax. While growth matters, regular cash flow could make your TFSA feel more productive, especially when that income arrives every month.
That is why monthly-paying dividend stocks are my favourites. But when you look for a stock to invest in, you may want to look beyond a high yield, as the underlying business also needs to hold up through changing market conditions.
Keeping that in mind, one stock that looks appealing for July is Choice Properties Real Estate Investment Trust (TSX: CHP.UN). The trust owns a large portfolio of necessity-based retail, industrial, mixed-use, and residential properties across Canada.
Let’s look at why this monthly payer could deserve a place on a TFSA income portfolio.
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A monthly payer for TFSA income
If you don’t know it already, Choice Properties is one of Canada’s largest diversified real estate investment trusts (REITs), with around 700 income-producing properties and nearly 68 million square feet of gross leasable area. Its retail portfolio is heavily tied to grocery-anchored locations, while its industrial properties serve key distribution markets.
Choice Properties stock has climbed by 17% over the last 11 months, despite macroeconomic uncertainties. As a result, the stock currently trades at $16.54 per share with a market capitalization of $5.4 billion. More importantly for income-focused investors, its monthly distribution currently offers an annualized yield of about 4.7%.
Steady operating momentum
In the first quarter (ended in March), Choice Properties posted a net loss of $87.2 million, which was better than the $96.2 million loss in the same quarter of the previous year. The improvement came from favourable non-cash fair value changes, including a $49 million positive adjustment to investment properties and a $19.8 million favourable change tied to its exchangeable units.
During the quarter, its funds from operations (FFO) rose 2.7% year-over-year (YoY) to $0.27 per unit. Excluding lease surrender revenue and the lower distribution from Allied Properties REIT, Choice’s FFO per unit climbed 3.5% from a year ago due mainly to higher net operating income (NOI) and lease surrender revenue.
The REIT’s property-level results also continue to show strength. In the latest quarter, its same-asset NOI on a cash basis grew 3% YoY, while total NOI rose 4.2%. Meanwhile, occupancy remained strong at 98.1% across its retail, industrial, mixed-use, and residential portfolio.
Growth plans beyond the payout
Choice Properties is also working on a major acquisition that could expand its long-term earnings base. The trust has agreed to acquire high-quality urban retail assets from First Capital REIT and KingSett Capital. This transaction is valued at about $9.4 billion, with Choice Properties acquiring about $5 billion of First Capital’s assets.
Moreover, the REIT is now focused on preserving capital, growing stable cash flows, and increasing net asset value. For 2026, the trust is targeting stable occupancy and 2%–3% YoY growth in its same-asset NOI on a cash basis. It also expects annual FFO of $1.08 to $1.10 per unit.
Foolish takeaway
Choice Properties offers a powerful mix of monthly income, high occupancy, and exposure to Canadian real estate assets that serve everyday needs. Its 4.7% yield may not be the highest on the Toronto Stock Exchange, but a great mix of dependable rent collection and improving FFO makes it a solid TFSA stock for investors who want monthly income without chasing risky payouts.
