A Perfect January TFSA Stock With a 6.8% Monthly Payout

January is when a lot of Canadians look at their Tax-Free Savings Account (TFSA) and realize it’s either empty, underused, or invested in a random mix of whatever looked good that day. A high-yield dividend stock can feel like the perfect January fix because it turns your reset into a habit. If the payout is steady, you get a recurring deposit that makes saving feel less like a sacrifice and more like a routine. In a TFSA, that routine is even better because the income is sheltered from tax. So let’s look at one dividend stock to consider on the TSX today.

NWH

NorthWest Healthcare Properties REIT (TSX: NWH.UN) is one of those names that can look irresistible on the surface. It’s a healthcare-focused landlord, which sounds defensive as medical buildings tend to stay busy in good times and bad. It also pays monthly, which is exactly what people want when they’re building a TFSA paycheque. But as a new investor, the first thing to understand is that a real estate investment trust (REIT)’s unit price can swing a lot even if the buildings are fine. Rates, credit markets, and investor sentiment can matter more than vacancy rates in the short run.

Looking at performance over time, NWH.UN has shown that defensive does not always mean calm. Higher interest rates are a double hit for REITs, as borrowing costs rise and property values can get marked down as capitalization rates move up. That can keep a unit price under pressure even if rent is being collected. If you’re buying this for an income plan, you have to be okay with the idea that your monthly cash may arrive while your account balance bounces around.

Another performance reality is that global REITs come with global noise. Currency moves can change reported results. Different countries have different rules around healthcare funding and rent escalators. And headlines about a large tenant, a hospital operator, or a portfolio review can move the units quickly. None of that makes the business bad, but it does mean you’re buying something that needs more patience than a Canadian bank or utility.

Looking ahead

Now for the part new investors actually need: earnings and valuation signals. Don’t start with the distribution yield, start with cash coverage. For a REIT, you want to see that funds from operations, and especially adjusted funds from operations after maintenance spending, cover what’s paid out with room to spare. A high yield is only “perfect” if the payout ratio leaves breathing room for interest expense, upkeep, and refinancing.

Second, look at debt and refinancing. If the Bank of Canada starts signalling more cuts, REITs often get a tailwind as lower yields can support real estate values and reduce future interest expense. That’s the upside case for NWH.UN in 2026. But cuts don’t erase maturity schedules. You still want to know when major debt rolls over, how much is floating versus fixed, and whether asset sales or retained cash can reduce leverage.

Third, look at tenant quality and concentration. Healthcare leases can be long, which is great, but a single tenant under pressure can still push for rent relief, extensions, or restructurings. As a beginner, you’re not trying to become an expert in every tenant. You’re checking whether the trust is diversified enough that one problem doesn’t threaten the distribution.

Bottom line

So is NWH.UN the perfect January TFSA stock with a 6.8% payout each month? It can be a reasonable pick for monthly income, but only if you treat it like a spicy side dish, not the whole meal. The yield looks biggest when the unit price is low, which is often when risks feel loudest. If rate cuts arrive and credit conditions improve, NWH.UN can benefit, and the market can rerate income names quickly. If they don’t, you still need the payout to be supported by real cash flow. Right now, here’s what that payout could bring in from a $7,000 investment.

COMPANYRECENT PRICENUMBER OF SHARESDIVIDENDANNUAL TOTAL PAYOUTFREQUENCYTOTAL INVESTMENTNWH.UN$5.351308$0.36$470.88Monthly$6,997.80

For a beginner TFSA, keep the position modest, pair it with steadier dividend growers, and check coverage each quarter. That way, the yield works for you, not against you, long term.

The post A Perfect January TFSA Stock With a 6.8% Monthly Payout appeared first on The Motley Fool Canada.

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More reading

• TFSA: 4 Canadian Stocks to Buy and Hold Forever
• This 7% Dividend Stock Pays Cash Each Month
• Got $1,000? These Canadian Stocks Look Like Smart Buys Right Now
• 2 Reliable Monthly Paying Dividend Stocks for Steady Cash Flow
• Retirees: 2 High-Yield Dividend Stocks for Strong TFSA Passive Income

Fool contributor Amy Legate-Wolfe has no position in any of the stocks mentioned. The Motley Fool recommends NorthWest Healthcare Properties Real Estate Investment Trust. The Motley Fool has a disclosure policy.