Investors can own quality dividend stocks in the Tax-Free Savings Account (TFSA) and begin a passive-income stream. A few Canadian stocks offer a monthly dividend, making them all the more attractive to income investors.
One high-dividend stock TFSA holders can own in 2026 is Boston Pizza Royalties Income Fund (TSX: BPF.UN), the trust behind Canada’s largest casual dining brand.
It trades around $22 a share and pays a monthly distribution of $0.124 per unit. Below, I break down how many shares you would need to earn $400 in monthly dividend income and whether I think the stock deserves a spot in your TFSA today.
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Why monthly dividend stocks work so well in a TFSA
Monthly dividend stocks are useful for retirees or anyone trying to replace a paycheck. Instead of waiting three months for a quarterly deposit, the cash lands in your account every single month, which makes budgeting a lot easier.
Boston Pizza Royalties Income Fund fits that mold for income investors in August 2026. It earns its revenue from royalties on franchise sales across 372 Boston Pizza restaurants, a business built on steady, repeatable cash flow rather than volatile earnings swings.
Boston Pizza has served Canadians since the first location opened in Edmonton in 1964, and the brand remains fully Canadian-owned. The fund collects a royalty on system-wide sales from restaurants across the country, so it earns money whether a location sells pizza, wings, or a burger.
The fund has an unusually long payment history. Including the distribution paid in June 2026, it has made 281 straight monthly payments plus four special distributions, totaling $498.7 million, or $29.59 per unit, since its 2002 initial public offering.
It also just locked in financial stability for the next few years. Its credit facilities, along with those of parent company Boston Pizza International, were extended to July 2029 through a new agreement with a Canadian bank.
“The three-year renewal of the fund’s and BPI’s credit facilities provides continued financial stability and flexibility for both the fund and BPI,” said Michael Harbinson, chief financial officer of Boston Pizza International and the fund.
He added that the modest rate increase reflects the broader rise in borrowing costs Canadian banks are experiencing.
How much to invest for $400 a month
Here is the simple math. The fund pays $0.124 per unit each month. To divide $400 by that monthly amount, you need about 3,226 units. At a share price of $22, that works out to an investment of roughly $71,000.
That amount would generate an annual dividend of about $1.488 per unit, for a yield near 6.8%, comfortably one of the higher yields among TSX dividend stocks paying monthly. Held inside a TFSA, every dollar of that $400 monthly payment stays in your pocket instead of being taxed as income.
Yes, I view Boston Pizza Royalties Income Fund as a buy for income-focused TFSA investors. The combination of a long, uninterrupted distribution record, a newly extended credit facility running through 2029, and a yield near 6.8% makes this an attractive royalty stock for anyone building a monthly income stream.
That said, the payout is tied to how well Boston Pizza restaurants perform across the country. Investors should watch the fund’s debt-to-earnings ratio, which its lenders require to stay below 2.25 times EBITDA (earnings before interest, tax, depreciation, and amortization), as a sign of ongoing financial health.
