The Tax-Free Savings Account (TFSA) is one of the best wealth-building tools available to Canadians. Picking a strong TFSA stock for that portfolio can provide years of tax-free income and compounding.
That strong TFSA stock needs to be one that can provide reliable income backed by a healthy business.
One stock that fits that description is Granite Real Estate Investment Trust (TSX:GRT.UN).
Here’s why Granite REIT could be the income stock for your portfolio.
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Why Granite looks like a strong TFSA stock
Granite is one of the better-known Canadian REITs. More specifically, the company is an industrial-focused REIT with a portfolio of properties located across both North America and Europe. That portfolio is made up of logistics, warehouse, and distribution properties.
In total, Granite owns and operates over 140 properties that have approximately 61.5 million square feet of leasable space.
That doesn’t make the business look as exciting as a retail site that attracts an endless stream of foot traffic. But businesses depend on industrial sites like the ones that Granite operates to move and store goods.
And demand for that industrial space remains strong.
Granite finished the most recent quarter with an occupancy rate of 98%.
Operating at near full-occupancy level means that Granite is generating a stable and recurring source of rental revenue.
Another impressive feature to note is Granite’s lease renewal numbers. In the most recent quarter, expiring leases were renewed with rates that were nearly 7% higher than the leases they replaced.
That helped drive same-property net operating income growth of 8.3%.
For TFSA investors, that combination is huge. It means that Granite is generating higher rents as leases roll over, which gives the REIT cash flow growth.
Granite’s distribution looks well supported
One of the main reasons why investors continue to turn to Granite is for that monthly payout. As of the time of writing, Granite offers investors a monthly distribution of $0.30 per unit. On an annual basis, that works out to $3.55 per unit.
For investors with $15,000 to invest in Granite, that works out to just shy of $600 in annual income. Long-term investors should note that’s enough to generate several new units each year from reinvestments alone.
That’s not the highest yield on the market, but it is well-covered. In the most recent quarter, Granite reported adjusted funds from operations (AFFO) of $1.26 per unit. The AFFO payout ratio for the quarter came in at 70%, and across the first half of 2026 that figure was lower at 66%.
That leaves Granite with a decent cushion between the cash it generates and the amount it pays out to investors.
That distribution is growing, too. Granite increased its monthly payout by 4.4% beginning with the December 2025 distribution.
In short, Granite is more than a strong TFSA stock that offers a monthly distribution.
Is this strong TFSA stock worth buying?
Granite may not appeal to investors seeking a high yield. For those options, there are plenty of other Canadian REITs offering yields higher than Granite.
Where Granite does appeal to investors is in offering exposure to a high-occupancy industrial real estate portfolio with rising rents and growing property income.
That combination is appealing inside a TFSA, where recurring monthly income and long-term compounding can work together without creating an annual tax bill.
This makes it a strong TFSA stock that should, in my opinion, be part of any well-diversified income portfolio.
