Put an Entire Year's TFSA Room Into This 7% Dividend Stock for $40 Monthly

Put an Entire Year’s TFSA Room Into This 7% Dividend Stock for $40 Monthly

This REIT has a solid history of dividend payments, supported by a strong portfolio of income-generating properties.

Sneha Nahata

Author Bio

Sneha Nahata has been fascinated by the stock market for as long as she can remember. Growing up in a family of investors and stock brokers, conversations about businesses, markets, and investing were part of everyday life. What started as curiosity soon became a lifelong passion and, ultimately, a career. She began her professional journey at Zacks Investment Research, where she developed her analytical skills and gained experience evaluating investment opportunities. Sneha has been writing for The Motley Fool Canada since 2020, helping investors look beyond the headlines to identify long-term investment opportunities. Her work is also featured on Barchart. Sneha’s investing philosophy combines growth and dividend investing, with a focus on finding businesses that can build wealth over the long term. Outside of finance, Sneha enjoys sketching, exploring new creative ideas, and spending time with her family.

Education

Master of Science (M.Sc.) in Finance

Areas of Expertise

Technology stocks, media and telecommunications, banking and financial services, energy stocks, consumer stocks, dividend investing, growth stocks, fundamental analysis, company valuation, and long-term investing.

Social Media Profiles

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Favorite Investment Quote

"Know what you own, and know why you own it." — Peter Lynch

Published October 15, 4:20 pm EDT

For 2026, the annual Tax-Free Savings Account (TFSA) contribution limit is $7,000. Putting an entire year’s contribution room into a reliable dividend stock with a strong payout history, monthly distributions, a healthy balance sheet, resilient operations, and consistent earnings can provide recurring income.

Against this background, here is a reliable TSX stock offering about a 7% yield and monthly payouts. Investing the full $7,000 annual contribution in this stock could generate more than $40 in monthly dividend income.

TFSA (Tax-Free Savings Account) on wooden blocks and Canadian one hundred dollar bills. — Source: Getty Images

A monthly dividend stock with a 7% yield

TFSA investors looking to generate monthly income can consider putting their entire year’s contribution room into SmartCentres REIT (TSX: SRU.UN). This Canadian real estate investment trust (REIT) has a solid history of consistent dividend payments, supported by a strong portfolio of income-generating properties.

SmartCentres REIT benefits from its strategically located properties in busy, high-traffic areas. These locations make its retail spaces attractive to tenants, help maintain high occupancy levels, and create opportunities to raise rents when existing leases expire or are renewed. In addition, its high-quality tenant base adds stability and helps the trust navigate periods of economic uncertainty.

The REIT’s second-quarter 2026 results reflect the demand for its real estate portfolio. As of June 30, 2026, SmartCentres reported an in-place and committed occupancy rate of 98.1%. This high occupancy reflects continued demand for its properties and a solid leasing strategy.

In addition, SmartCentres renewed about 86% of leases set to expire in 2026, with rental increases of 12% excluding anchor tenants and 6.6% including them. These positive rental spreads suggest that the REIT can secure higher rates on renewed leases, potentially strengthening its future revenue. Meanwhile, a 99% rent collection rate shows tenant reliability and the quality of its rental income.

Earn over $40 monthly

SmartCentres REIT is well-positioned to reward TFSA investors with steady monthly payouts. Strong leasing demand and high occupancy could increase net operating income (NOI) and funds from operations (FFO), supporting its distributions.

The trust’s properties continue to attract high customer traffic, which can boost tenants’ sales and strengthen business performance. This works in SmartCentres’ favour as it allows the REIT to raise rents as existing leases come up for renewal.

A high occupancy rate and a diversified, resilient retail portfolio provide SmartCentres with a dependable rental income base. In addition, its mixed-use development projects offer opportunities to diversify its property portfolio and support its growth.

The REIT is also working to enhance returns from its existing properties by attracting established tenants, optimizing its tenant mix, and broadening its retail offerings. These strategies could improve property performance, strengthen operating cash flow, and help sustain monthly distributions. Furthermore, its extensive land holdings that remain available for development represent another potential source of long-term value creation.

Overall, SmartCentres REIT’s resilient retail operations, consistently high occupancy, higher rents, mixed-use development opportunities, and fixed-rate debt structure position it well to keep paying its dividend.

As the table below shows, investing $7,000 in SmartCentres REIT could buy about 264 units at the current market price. With a monthly distribution of $0.15 per unit, your investment could generate more than $40 in monthly income.