If you’re hunting for steady income, owning monthly dividend stocks can be a good strategy. Valued at a market cap of $520 million, Timbercreek Financial (TSX:TF) is one such stock that deserves a closer look.
Timbercreek a specialty lender that finances commercial real estate across Canada, and it has built its whole business around paying investors monthly.
Today, the Canadian dividend stock offers a 10% yield. Over the last 10 years, Timbercreek stock is down 25%. However, with dividend reinvestment, cumulative returns are closer to 75%.
Let’s see if this high-dividend TSX stock is a good buy right now.
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Is this Canadian dividend stock a buy right now?
Timbercreek Financial is one of Canada’s leading alternative asset managers and lends capital to real estate investors. Most of its lending portfolio is exposed to multi-residential buildings, along with office and retail properties in major urban markets.
Big banks are often reluctant to underwrite smaller, shorter-term commercial mortgages, especially when borrowers need fast execution or flexible terms.
Timbercreek’s clients are typically sophisticated real estate investors who need bridge financing, sometimes for up to five years, to fund renovations, redevelopment, or a property purchase. In exchange for speed and flexibility, those borrowers pay higher interest rates and fees, which is what fuels Timbercreek’s income.
At the end of the second quarter, more than 81% of the portfolio was invested in cash-flowing properties, and multi-residential assets made up about 60% of total investments.
First mortgages accounted for roughly 94% of the book, and the loan-to-value ratio sat at 68.3%, a conservative cushion that helps protect the portfolio if property values soften.
A focus on the dividend payout
For Canadian monthly dividend stock investors, coverage is a key metric. In Q2 of 2026, Timbercreek generated net investment income of $24.9 million and a distributable income of $14.6 million or $0.18 per share, indicating a payout ratio of almost 98%.
Chief Investment Officer Scott Rowland offered useful context on how consistent that income stream has been. Over the medium term, he noted, quarterly distributable income per share has generally ranged between $0.17 and $0.21, averaging close to $0.19 per share.
Roughly 90% of the loan portfolio is floating rate with contractual floors, and nearly all of these loans are currently sitting at their floor rates.
In plain terms, it means Timbercreek’s income is largely protected even if benchmark rates keep drifting lower, which has helped offset the impact of a falling rate environment on yields.
Cleaning up the loan book
The biggest overhang on Timbercreek’s stock in recent years has been its troubled or staged loans, where it made significant progress in the second quarter.
Stage 3 balances, the most seriously impaired loans, have fallen more than 51% since the start of the year, helped by receiver-led sales of two Calgary properties and other resolution work.
CEO Blair Tamblyn was direct about where things stand. Setting aside the roughly $200 million tied up in staged positions, he said the remaining $1 billion of the portfolio is in very good shape, both on its own and compared with competitors.
He also indicated the company expects most of the remaining problem loans to have much clearer paths to resolution, or be resolved outright, by the end of the year.
As those positions get resolved, management can redeploy that money into new, income-generating mortgages, which should support both earnings and the dividend over time.
Should you buy this monthly dividend stock?
Timbercreek Financial looks like a compelling option for investors who want reliable, monthly cash flow from a Canadian lender rather than a traditional bank or REIT.
The dividend was fully covered last quarter, origination activity was strong at $154 million, and management is making tangible progress clearing out its troubled loans.
I view Timbercreek as a solid buy for income-focused portfolios, provided investors are comfortable with the commercial real estate lending risk that comes with a high yield.
