A Perfect TFSA Stock: A 6.7% Payout Each Month

This Canadian stock offers a 6.7% annualized yield with monthly distributions, backed by strong retail occupancy and ongoing property developments, making it an attractive TFSA income stock.

Jitendra Parashar

Author Bio Jitendra Parashar is a financial journalist who has been writing for The Motley Fool Canada since June 2020. With more than 13 years of experience in financial journalism, equity research, and market analysis, he helps investors understand market developments and identify long-term investment opportunities. Before joining The Motley Fool Canada, Jitendra spent several years at Market Realist covering U.S. equities, major economic developments, and developments in the automotive and technology industries. He also worked in commodity and currency research at brokerage firms, gaining insight into how economic trends, central bank decisions, and geopolitical events influence financial markets. Jitendra writes for beginner investors, dividend seekers, and Canadians looking to build wealth over the long term. He also contributes to the daily TSX Today series, explaining key Canadian market developments and highlighting news investors should watch. Based in India, Jitendra follows Canadian and U.S. markets closely. Outside of work, he enjoys travelling in the Himalayas, street and nature photography, and exploring programming and artificial intelligence. Education MBA in Finance and International Business Bachelor's degree in Journalism Areas of Expertise Canadian and U.S. financial markets, long-term equity investing, dividend investing, macroeconomic and geopolitical trends, automotive stocks, emerging technologies, and artificial intelligence. Social Media Profiles LinkedIn Muck Rack Favorite Investment Quote “Simplicity is the master key to financial success.” — John C. Bogle

Published November 12, 4:20 pm EST

While nobody can claim that any dividend stock is completely immune to market volatility, I believe building a portfolio of income-producing businesses can be rewarding with the long-term Foolish investing approach. For Canadians, a Tax-Free Savings Account (TFSA) could make that strategy even more attractive by allowing eligible investments to generate income without Canadian income tax.

To achieve that goal, monthly-paying real estate investment trusts (REITs) could be worth considering, especially for investors who prefer receiving regular cash distributions.

In this article, I’ll highlight one attractive Canadian monthly dividend stock offering an attractive yield and explain why it could be a great TFSA investment.

shoppers in an indoor mall — Source: Getty Images

SmartCentres stock

The Canadian stock I would consider for monthly TFSA income is SmartCentres Real Estate Investment Trust (TSX: SRU.UN), which owns and manages a large portfolio of retail and other properties across Canada.

This Vaughan-based REIT currently has ownership interests in 201 properties, with shopping centres forming a major part of its business. After climbing about 7% year-to-date, SmartCentres stock trades at $27.59 per unit with a market cap of around $4 billion.

More importantly for income-focused investors, the REIT offers a juicy 6.7% annualized dividend yield, with distributions paid every month.

Besides these regular payouts, SmartCentres’ strong retail operations and continued leasing momentum make it an interesting investment. Let’s take a closer look.

The underlying financial strength

In the third quarter, the REIT reported a small 0.4% year-over-year (YoY) increase in its net operating income to $141.8 million. Higher rental income from new leases and renewals supported this growth, although lower profits from residential sales partly offset those gains.

More importantly, SmartCentres’ same-property net operating income rose 2.5% YoY in the latest quarter with the help of stronger leasing activity and higher rental rates. Excluding anchor tenants, this growth was even better at 3.8%. Meanwhile, its committed occupancy rate improved slightly from the previous quarter to reach an impressive 98.2%. And its lease renewals, excluding anchor tenants, delivered strong rent growth of 11.8%.

During the quarter, the REIT leased roughly 104,000 square feet of previously vacant space, bringing its total leased vacant space to 408,000 square feet in the first nine months of 2026.

Why SmartCentres could be a great monthly income stock

What makes SmartCentres even more appealing for TFSA investors is its potential for future rental income growth, backed by its ongoing expansion projects.

For example, the REIT is developing three new Walmart-anchored retail centres in Kingston, Lindsay, and Winnipeg. Construction at its Kingston location was expected to begin in the fourth quarter of 2026. It also recently completed two self-storage facilities in Quebec, expanding its operating portfolio to 16 facilities. Adding to the optimism, its three other self-storage properties are expected to open in 2027.

On top of that, SmartCentres continues to advance its residential developments in Vaughan, including the ArtWalk condominium project, where roughly 93% of its 340 units were already pre-sold as of September.

While its third-quarter adjusted funds from operations payout ratio of 96.8% leaves limited room for unexpected challenges, SmartCentres’ high occupancy, steady rental demand, and growing property portfolio support its long-term income potential.

Foolish takeaway

Overall, SmartCentres could be an attractive TFSA stock to buy right now for investors seeking monthly passive income. Its 6.7% dividend yield, combined with its ongoing expansion efforts, could help investors generate regular tax-free distributions while benefiting from potential long-term growth.