CT Real Estate Investment Trust (TSX: CRT.UN) is back on Canadian income investors’ watch lists as it prepares to release third quarter earnings results after markets close on November 9. The retail property landlord has been a favourite monthly dividend stock for many passive income seekers over the past decade. Stellar portfolio metrics, sector leading financial prowess, and 13 consecutive years of management’s proven commitment to increase payouts to investors make the real estate investment trust (REIT) a top-tier monthly dividend stock to hold for decent (and growing) yields. Here’s why I’d recommend a Buy on CT REIT before earnings next month.
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Thirteen years of monthly income raises
In May, CT REIT announced its 13th distribution increase since its 2013 initial public offering (IPO), a 3.5% raise effective with the July 2026 payment. Cumulative distribution growth now exceeds 50%. Among Canadian REITs, only Granite Real Estate Investment Trust has a longer dividend growth streak of 15 years. CT REIT sits at number two on a list of dividend growth stocks in its asset class. It ranks ahead of Morguard North American Residential Real Estate Investment Trust (four years), RioCan Real Estate Investment Trust (four years), and Choice Properties Real Estate Investment Trust, which clocked three consecutive years of distribution raises this year.
CT REIT’s current monthly distribution at $0.08 per unit should yield about 5.5% annually for new investors buying into the top-tier monthly dividend stock today for future passive income.
CT REIT’s payout ratio tells a soothing story
A high distribution yield often means little if the payout is stretched, threatening the passive income stream’s sustainability. CT REIT’s payout ratio on its adjusted funds from operations (AFFO) came in at 72.5% for the first half of 2026, an improvement from 72.9% during the same period last year.
AFFO measures a REIT’s most recurring distributable cash flow after property maintenance and leasing costs. CT REIT retains nearly 30% of distributable cash flow to invest in expanding its real estate portfolio. That’s a comfortable cushion for a REIT with near-full occupancy (99.6%) and contractual rent escalators built into its leases.
Among Canadian retail REITs that report AFFO payout rates, only Primaris REIT has a lower historical AFFO payout ratio among retail peers, but its yield is just 4% – well below what a monthly income seeker may need. CT REIT offers a potentially best combination of a 5%-plus yield and a sub-75% payout ratio in the Canadian retail REIT sector.
Why CT REIT’s monthly dividend could be durable
CT REIT’s portfolio is anchored by Canadian Tire (TSX: CTC.A) locations (its former parent, and majority equity holder), with occupancy at 99.5% and a long-weighted average lease term of 7.2 years. Leases carry built-in annual rent escalations, providing predictable organic net operating income (NOI) growth without relying on acquisitions.
The REIT’s development pipeline adds another layer. Going into the third quarter, CT REIT had nine active projects representing approximately $354 million in committed investment, with 94.2% pre-leased. The trust has this future cash flow already contracted before the buildings open.
Some notable risk you must accept
Concentration risk can’t be ignored. CT REIT’s fortunes are tied to Canadian Tire, which occupies 92% of its portfolio’s leasable area. If the retailer stumbles, the REIT definitely feels it. That said, Canadian Tire has maintained an investment-grade credit rating for years – a testament to its strong financial performance. It’s not likely to start defaulting on its rent obligations any time soon.
Foolish bottom line
Investors who want a monthly dividend stock paying more than a 5.5% yield, a conservative payout ratio, and a management team that appears committed to raising distributions every single year may shortlist CT REIT right now. It won’t make one rich overnight, but it will pay you cash every month for years to come, and most probably raise the paycheque every year.
