A Perfect February TFSA Stock With a 9.7% Monthly Payout

February 2026 could be a record-breaking month for the TSX, given the current upward trend, not to mention a fresh record closing high of 33,256.80 on the 10th. However, income-focused investors, notably Tax-Free Savings Account (TFSA) users, still need an additional financial cushion if the market corrects amid increased volatility.

Timbercreek Financial (TSX:TF) is a perfect TFSA stock this month. This high-yield financial stock can serve as an income anchor in a tax-sheltered account. At $7.08 per share, the dividend offer is a mouth-watering 9.7%. Moreover, the payout frequency is monthly rather than the typical quarterly. The passive income can form part of your monthly budget.

Low-rate environment

The Bank of Canada’s recent decision to hold the policy interest rate at 2.25% indefinitely, or at least throughout 2026, is a significant tailwind for the mortgage finance industry. Timbercreek Financial, a specialized but conservative lender in the commercial real estate space, should likewise benefit from the low-rate environment.

This $590 million mortgage investment corporation (MIC) offers shorter-duration structured financing solutions, lending exclusively against income-producing commercial real estate. Stable, lower rates stimulate loan demand, while commercial borrowers would be better able to service their debts.

Furthermore, Timbercreek’s weighted-average loan-to-value (LTV) ratio of 67.9% provides a safety net in the event of borrower default. For risk-averse income-seekers, the conservative lending policy and built-in equity cushion ensures support for and the sustainability of dividends.

During a conference call in late October 2025, Timbercreek’s Chief Executive Blair Tamblyn, said that a reduced interest rate environment has set the foundation for a new real estate cycle. Meanwhile, on February 11, 2026, the Bank of Canada’s governing council said it was difficult to predict the timing and direction of the next change in the benchmark rate.

Stable asset class and capital protection

Timbercreek stock climbed steadily to the $7 level to start the year, notwithstanding the earnings miss in Q3 2025. There was also a large unexpected repayment that reduced the overall portfolio. Nonetheless, Tamblyn expects to present improved fourth-quarter and full-year results on February 26, 2026.

He also expressed confidence in Timbercreek’s continued ability to deliver stable monthly income through a conservative strategy grounded in income-producing assets. Multi-residential real estate assets comprise about 57% of the portfolio, 82% of total investments are in cash-flowing properties, and first mortgages represent 94%.

According to Scott Rowland, Chief Investment Officer of Timbercreek, the weighted interest rate (WIR) has declined in the last three quarters due to the BOC’s rate-cutting cycle. However, he expects WIR to return to the historical average of approximately 8%.

Timbercreek is aware that economic uncertainty poses challenges for the business. The focus on multi-family residential real estate, a resilient asset class, helps to deliver stable income and protect investor capital. Rowland adds that the underlying investment pipeline, with strong risk and return profiles, is the growth driver in the coming quarters.

Investment takeaways

A compelling argument for Timbercreek Financial is its defensive portfolio and its focus on essential, resilient asset class. The uninterrupted monthly dividend payments since August 2016 add confidence to invest in the income powerhouse.

The post A Perfect February TFSA Stock With a 9.7% Monthly Payout appeared first on The Motley Fool Canada.

Should you invest $1,000 in Timbercreek Financial Corporation right now?

Before you buy stock in Timbercreek Financial Corporation, consider this:

The Motley Fool Canada team has identified what they believe are the top 10 TSX stocks for 2026… and Timbercreek Financial Corporation wasn’t one of them. The 10 stocks that made the cut could potentially produce monster returns in the coming years.

Consider MercadoLibre, which we first recommended on January 8, 2014 … if you invested $1,000 in the “eBay of Latin America” at the time of our recommendation, you’d have $21,827.88!*

Now, it’s worth noting Stock Advisor Canada’s total average return is 102%* – a market-crushing outperformance compared to 81%* for the S&P/TSX Composite Index. Don’t miss out on our top 10 stocks, available when you join our mailing list!

Get the 10 stocks instantly #start_btn6 { background: #0e6d04 none repeat scroll 0 0; color: #fff; font-size: 1.2em; font-family: 'Montserrat', sans-serif; font-weight: 600; height: auto; line-height: 1.2em; margin: 30px 0; max-width: 350px; text-align: center; width: auto; box-shadow: 0 1px 0 rgba(0, 0, 0, 0.5), 0 1px 0 #fff inset, 0 0 2px rgba(0, 0, 0, 0.2); border-radius: 5px; } #start_btn6 a { color: #fff; display: block; padding: 20px; padding-right:1em; padding-left:1em; } #start_btn6 a:hover { background: #FFE300 none repeat scroll 0 0; color: #000; } @media (max-width: 480px) { div#start_btn6 { font-size:1.1em; max-width: 320px;} } margin_bottom_5 { margin-bottom:5px; } margin_top_10 { margin-top:10px; }

* Returns as of January 15th, 2026

More reading

• 1 Canadian Dividend Stock Down 44% to Buy and Hold Forever
• Retirement Planning: How to Generate $2,000 in Monthly Income
• Here’s the Average TFSA And RRSP for a 40-Year-Old in Canada
• TSX Today: What to Watch for in Stocks on Tuesday, February 17
• Here Are My 2 Favourite ETFs to Buy for High-Yield Passive Income in 2026

Fool contributor Christopher Liew 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.