I’d Put My Entire TFSA Contribution Into This 5.5% Monthly Passive-Income Stock

RioCan’s attractive 5.5% yield, strong retail occupancy, and improving rental outlook make it a compelling monthly passive-income stock for long-term TFSA investors.

Key Points
  • RioCan stock offers a 5.5% annualized distribution yield with monthly payouts.
  • The trust's strong retail leasing performance helped lift its core FFO per unit by 5.3% YoY in the second quarter of 2026.
  • RioCan's strategic asset sales and improving rental growth outlook could support its long-term income potential.

For first-time investors, the idea of investing an entire Tax-Free Savings Account (TFSA) contribution in just one stock can seem risky. You’ve spent time building those savings, so it’s natural to worry about losing money if the investment doesn’t work out.

Personally, I’d feel more comfortable owning a business that generates recurring cash rather than relying entirely on its share price going up. That’s one reason monthly dividend-paying stocks appeal to me. Such stocks provide you with a steady stream of cash every month without requiring you to sell your investments. You could reinvest those payments to buy more shares or eventually use them to cover everyday expenses.

In this article, I’ll share why this monthly passive-income stock stands out to me and whether it’s worth considering putting your full TFSA contribution into it.

man shops in a drugstore

Source: Getty Images

The TFSA-friendly monthly dividend stock

RioCan REIT (TSX: REI.UN) is the monthly payer I’d consider trusting with a larger TFSA investment, as its juicy yield is backed by highly occupied retail properties and growing rents.

This Toronto-based real estate investment trust (REIT) mainly owns and manages commercial properties across Canada, focusing on shopping centres anchored by essential businesses like grocery stores, pharmacies, and discount retailers.

RioCan stock has climbed 13% so far in 2026 and currently trades at $21.20 per unit with a market cap of $6.1 billion. Besides these positive returns, RioCan offers an attractive 5.5% annualized distribution yield, with payouts arriving every month.

What makes this monthly dividend stock even more interesting is its focus on necessity-based retail properties, which tend to attract consistent customer traffic even during challenging economic conditions. As a result, its business model continues to support strong demand for its rental spaces.

Strong financial growth supports RioCan’s monthly payouts

RioCan’s retail committed occupancy reached a record 98.8% in the second quarter, improving from 98.2% a year ago. The trust also achieved an impressive 23.1% blended leasing spread, reflecting its ability to secure higher rents through new leases and renewals.

These strong leasing trends helped RioCan’s commercial same-property net operating income (NOI) increase by 4.3% year-over-year (YoY) during the quarter.

More importantly, its core funds from operations (FFO) per unit rose 5.3% YoY to $0.40, supported by higher commercial NOI and the positive impact of unit repurchases. Meanwhile, RioCan’s quarterly net profit climbed nearly 4% YoY, mainly benefiting from higher property valuation gains, although lower residential inventory gains weighed on operating performance.

Interestingly, RioCan’s core FFO payout ratio has been at just 73.8% over the trailing 12 months, suggesting its monthly distributions are reasonably supported by underlying earnings.

More reasons to be optimistic about RioCan

Beyond its attractive monthly payouts, RioCan’s efforts to strengthen its core business could make it an even more rewarding TFSA investment over time.

For example, RioCan has been selling residential assets to free up capital and sharpen its focus on necessity-based retail properties. In the first half of 2026, the trust completed residential property sales worth $280.5 million.

Including conditional sale agreements, its planned capital repatriation from residential assets reached about $1.3 billion, representing 96% of its 2025–2026 target.

Why you should consider RioCan for your TFSA

RioCan’s strong retail occupancy, rising rental income, and disciplined capital allocation could support its long-term growth. With a 5.5% annualized yield and consistent monthly payouts, this Canadian real estate stock could be a rewarding TFSA investment for years to come.

Fool contributor Jitendra Parashar has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

More on Dividend Stocks

money goes up and down in balance
Dividend Stocks

A Perfect TFSA Stock: A 5.1% Yield With Constant Paycheques

Brookfield Infrastructure pays a 5.1% yield and is growing cash flow 10% a year. See why BIP.UN could be a…

Read more »

Dividend Stocks

How I’d Build $200 a Month in Tax-Free TFSA Income With Peyto Exploration & Development and Automotive Properties REIT

These two monthly-paying dividend stocks present compelling opportunities for income-seeking investors.

Read more »

ETFs can contain investments such as stocks
Dividend Stocks

This ETF Yields 3.4% and Pays You Monthly: It’s a Smart One for Retirement Savings

Here’s why this simple Canadian dividend ETF and its monthly payments make it an ideal investment for your retirement savings.

Read more »

Two senior friends playing beat tennis on sand tennis court
Dividend Stocks

I Found the Ideal Retirement TFSA Stock Paying 5.7%

An ideal retirement TFSA stock not only pays a high yield but must also have secure cash flows from a…

Read more »

Train cars pass over trestle bridge in the mountains
Dividend Stocks

Is Now a Good Time to Start Investing in Canada? What to Consider

Here’s why now can be a good time to start investing in Canada and what to consider as you build…

Read more »

House models and one with REIT real estate investment trust.
Dividend Stocks

An Ideal TFSA Stock for November, Paying 5.2% Each Year Into Your Retirement Fund

With a 5.2% dividend yield paid monthly, this Canadian stock could help you build a recurring retirement income stream while…

Read more »

man in bowtie poses with abacus
Dividend Stocks

How to Read a Payout Ratio in 60 Seconds

Understand the payout ratio and its significance. Learn how it helps assess dividend stocks in just one minute.

Read more »

earn passive income by investing in dividend paying stocks
Dividend Stocks

How to Set Passive Income Goals You Can Actually Reach

Setting passive income goals is easy, but it should be realistic as to how much you can really set aside…

Read more »