Building a Tax-Free Savings Account (TFSA) that pays you every month does not have to be complicated. Instead of chasing dozens of risky investments, sometimes a few high-quality Canadian dividend stocks with a reliable distribution could make a big difference over time.
In the long run, the best choices turn out to be companies that continue to improve the business while rewarding investors with regular income. That balance becomes even more valuable when macroeconomic uncertainties or geopolitical tensions keep many investors on edge. RioCan Real Estate Investment Trust (TSX: REI.UN) could be a good example of such a stock, as it continues making progress across its business while rewarding investors with attractive monthly dividends.
In this article, I’ll explain why RioCan could be a great fit for investors looking to build a dependable stream of monthly passive income in their TFSA this July.
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A retail REIT built for monthly income
To put it simply, RioCan is one of Canada’s largest retail real estate investment trusts (REITs) that currently owns and manages 167 necessity-based retail properties with about 32 million square feet of net leasable area. Its portfolio is mainly anchored by well-known tenants like Loblaw, Canadian Tire, Winners, Dollarama, and Metro, while its RioCan Living brand also includes residential properties in Toronto, Ottawa, and Calgary.
Following a 27% gain over the last year, RioCan stock currently trades at $22.50 per share with a market cap of $6.5 billion. At the current market price, it offers an annualized dividend yield of about 5.1% through monthly distributions. The recent stock rally mainly reflects improving investor confidence as the REIT continues sharpening its focus on high-quality retail assets.
Strong leasing trends support growth
If a business continues delivering steady operating improvements, its monthly payouts become even more reliable and attractive.
In the first quarter of 2026, RioCan posted record blended leasing spreads of 25.8%, driven by an exceptional 58.5% spread on its new leases as strong retailer demand allowed it to capture higher market rents. The trust’s commercial same-property net operating income rose 4.7% year over year (YoY), marking the third consecutive quarter with growth of at least 4.5%.
Meanwhile, the REIT maintains solid committed retail occupancy of 98.6%, while its tenant retention ratio remains healthy at 92.4%, highlighting the quality of its portfolio and long-standing tenant relationships. In the latest quarter, RioCan REIT’s core funds from operations stayed stable at $0.39 per share as stronger property performance and unit buybacks offset its higher interest costs and the impact of recent asset sales. As a result, its net profit improved to $0.32 per share from a loss of $0.28 per share a year ago, largely because valuation losses declined significantly.
Why it could fit a July TFSA
Interestingly, RioCan REIT is continuing to simplify its business by monetizing residential assets and recycling that capital into retail investments, property enhancements, acquisitions, and unit buybacks. By early May, RioCan had achieved more than $1 billion of capital repatriation toward its previously announced $1.3 billion target. It also strengthened its retail platform by acquiring the remaining ownership interests in Oakville Place and Georgian Mall.
Recently, the company also reaffirmed its 2026 outlook, including core funds from operations of $1.60 to $1.62 per share and commercial same-property net operating income growth of 3.5% to 4%.
Overall, with a resilient retail portfolio, strong leasing momentum, disciplined capital allocation, and a reliable 5.1% monthly yield, RioCan could be an attractive stock for investors looking to strengthen their TFSA with dependable passive income.
