An 11% Dividend Stock to Buy for $231 Every Month

An 11.1% yield can fund a $231 monthly deposit on $25,000, but it comes with real credit-risk strings attached.

Amy Legate-Wolfe

Author Bio Amy became interested in investing in 2018 after having her first daughter. After receiving a masters degree in journalism from Western University, she became frustrated that the finance industry remained a confusing place for Canadians like her: new parents, millennials, and other young people who needed to understand their finances. Now, Amy focuses on tech companies and renewable energy for growth opportunities, coupling that with long-term investing strategies and equities. She also provides investors with a daily newsletter, Canada Stock Digest, for daily market updates. Her work can also be found at Canada's National Observer, where she writes on the business side of climate action. Before joining Motley Fool Canada, Amy wrote for major news organizations including HuffPost, CTVNews.ca, and CBC. When she’s not researching investing strategies, Amy’s time is pretty much monopolized by her two wild daughters, but in what little spare time she has she loves to do yoga, go on walks with her dog, and travel with her husband. Social Media Follow Amy on LinkedIn and Canada Stock Digest. Favorite Investment Quote “October: This is one of the particularly dangerous months to speculate in stocks. The others are July, January, September, April, November, May, March, June, December, August and February.” – Mark Twain

Published August 13, 4:20 pm EDT

Key Points

Timbercreek’s $0.0575 monthly dividend can turn $25,000 into about $231 a month at today’s price.
The dividend is technically covered, but the payout ratio near 98% leaves little room for mistakes.
Credit losses and real-estate defaults are the key risk, so diversify and don’t treat it like a savings account.

The stock market rarely offers an 11% yield without placing a small warning cone beside it. In this case, however, a bruised share price has pushed one Canadian lender’s yield to 11.1%, enough to turn a $25,000 investment into an actual $231 monthly deposit.

some REITs give investors exposure to commercial real estate — Source: Getty Images

Getting there

That monthly schedule is useful for investors paying bills or reinvesting dividends. A $0.058 payment may look tiny on its own, yet thousands of shares can make it quite sociable. Reinvesting each deposit buys more shares, which can produce more income the next month and give compounding something to work with.

A high yield rises when a share price falls, often because investors expect earnings trouble or a dividend cut. Before buying any monthly dividend stock, I want cash flow covering the payment, a believable catalyst, and risks I can easily explain to my grandmother (she worries).

Mortgage investment corporations (MICs) can offer large yields because they lend money against real estate and distribute much of the resulting income. Their profits depend on the spread between loan income and funding costs. Lower interest rates can reduce both, while loan defaults can turn a delicious yield into indigestion. That brings us to a lender working through both sides of the equation.

TF fits

Timbercreek Financial (TSX: TF) is a non-bank commercial real estate lender. It provides shorter-term, structured mortgages to experienced property owners that may need faster or more flexible financing than a traditional bank offers. Its loans are secured by assets such as apartments, industrial buildings, and other income-producing properties.

The current catalyst is renewed lending activity. Timbercreek stock advanced $153.5 million in new and existing mortgages during the second quarter as conditions improved, with management expecting momentum to continue through the second half of 2026. More performing loans can replace capital trapped in troubled positions and rebuild the income cushion beneath the dividend.

Second-quarter distributable income held steady at $14.6 million, or $0.18 per share. The dividend consumed 97.7% of that cash, slightly better than 98.5% during the first quarter. Coverage exists, although it has arrived wearing skinny jeans. There isn’t much room for another setback.

Earning income

At a recent $6.23 share price, Timbercreek’s $0.69 annualized dividend produces an 11.1% yield. A $25,000 investment can buy 4,012 shares after rounding down, leaving just $5.24 uninvested.

COMPANY	RECENT PRICE	NUMBER OF SHARES	ANNUAL DIVIDEND	ANNUAL TOTAL PAYOUT	FREQUENCY	TOTAL INVESTMENT
TF	$6.23	4,012	$0.69	$2,768.28	Monthly	$24,994.76

Those shares would produce $230.69 every month, rounded to $231 in the headline. The deposit is real rather than a quarterly dividend divided by three, which makes budgeting satisfyingly uneventful. Inside a Tax-Free Savings Account (TFSA), it could also arrive tax-free if the investor has enough available contribution room.

However, Timbercreek stock recorded $6.7 million in expected credit losses during the quarter, helping pull net income down to $7.8 million from $12.4 million a year earlier. The encouraging part is that Stage 3 problem mortgages fell 51.1% during the first half. The uncomfortable part is that additional defaults or falling recovery values could still pressure earnings and the dividend.

Bottom line

I wouldn’t let one MIC fund every monthly expense. A broader group of Canadian dividend stocks can reduce the damage if one borrower, sector, or lender stumbles. Timbercreek stock’s 97.7% payout ratio also makes this a higher-risk income position, not a savings-account substitute wearing a suit.

For investors comfortable with that risk, Timbercreek stock offers the larger income target this strategy needs. If management keeps resolving problem loans and redeploying the recovered capital into performing mortgages, today’s $231 monthly payment could remain generous while a stronger portfolio gives the battered share price room to recover.