Canada is full of quality dividend stocks to choose from. However, only a small portion of those stocks pay dividends monthly. These are often in the real estate, energy, royalty, or industrial sectors.
With the TSX Index rising 12% in 2026, many dividend yields have compressed during the year. Luckily, there are still some quality stocks trading with relatively attractive dividend yields.
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A top Canadian real estate stock for dividends
Choice Properties Real Estate Investment Trust (TSX: CHP.UN) is the ideal stock to hold if you just want steady consistent dividend income. At a price of $15.80, Choice has a market cap of $11.4 billion. It pays a $0.065 per unit monthly distribution. That equates to a 4.9% dividend yield annualized.
Choice is Canada’s largest real estate investment trust (REIT). It owns and operates 699 properties equating to 68.4 million square feet across Canada. 23% of its portfolio is composed of high-quality logistics and warehousing properties.
73% of its portfolio is focused on necessity-based, grocery-anchored retail centres. 57% of its leasable area is anchored by Canada’s largest grocer and pharmacy company, Loblaw Companies.
While it is large exposure to one tenant, Loblaw is arguably one of the best grocery operators in Canada. Likewise, the Weston family has controlling stakes in both entities, so incentives are high for both to work cooperatively and succeed.
Great properties support solid metrics
Currently, Choice operates with 97.7% occupancy. It has a weighted average lease term of over 6 years. This just means its rental profile should be seen as very resilient, given those rents are lease contracted.
Choice is about to get considerably larger when it completes its acquisition of $5 billion worth of grocery-anchored retail assets from First Capital REIT. First Capital has a high-quality portfolio of urban-focused retail assets across Canada. That portfolio has been enjoying mid-single digit rental rate growth over the past few years. That is expected to bolster Choice’s organic growth outlook.
A big acquisition could propel solid future returns
After its acquisition, there will be some near-term dilution from the issuance of shares and debt. However, management hopes to consistently deleverage over time. The deal will cement Choice as Canada’s largest necessity-based retail REIT. Given its combined national scale, Choice should be able to unlock operational, financial, and management synergies over time.
This dividend stock is not the fastest-growing REIT. In the second quarter of 2026, net operating income (NOI) unit grew 2.8%. Adjusted funds from operation per unit (a key cash flow metric) only increased 1.5%. However, the First Capital acquisition should add about 3.5% annual growth. So, all in, investors are looking at 5-6% annual NOI growth.
Combine that with a 4.9% distribution and shareholders are looking at a 9-10% annual total return. It is not a bad prospect given that this REIT has low operational risks given the quality of its properties. This dividend stock has a history of raising its distribution in line with its cash flow growth, so that is another lever on income returns.
The Foolish takeaway on this dividend stock
One thing that investors do need to evaluate is the fluctuation of interest rates. REITs have an inverse relationship to interest rates. If interest rates rise, Choice could be at risk of losing share momentum. That is especially true given its temporarily elevated level of debt. This is just something you want to monitor if you choose to hold this dividend stock for its attractive monthly income stream.
