A Perfect May TFSA With a 7.5% Monthly Payout

May can sneak up on investors. One minute, you’re waiting for the market to settle. The next, another month passes without putting spare cash to work. That’s why a monthly payer like Slate Grocery REIT (TSX:SGR.UN) deserves a closer look for a Tax-Free Savings Account (TFSA). It offers income, real estate exposure, and a business tied to one of the most boring but useful habits around: buying food.

SGR

Slate stock owns grocery-anchored real estate in the United States, focusing on shopping centres where grocery stores bring regular traffic. People might delay a new couch, skip a fancy dinner, or hold off on a vacation. They still need milk, bread, produce, prescriptions, and household basics. That gives this real estate investment trust (REIT) a defensive feel, even though real estate still comes with interest-rate risk.

The payout creates the first hook. Slate stock pays monthly distributions sitting at a dividend yield of about 7.5% at writing. For a TFSA investor, that kind of cash flow can feel especially useful because eligible gains and income can grow tax-free inside the account. Even now, here’s what $7,000 could bring in.

COMPANYRECENT PRICENUMBER OF SHARESANNUAL DIVIDENDANNUAL TOTAL PAYOUTFREQUENCYTOTAL INVESTMENTSGR.UN$16.77417$1.18$492.06Monthly$6,993.09

The business also looks more stable than many higher-yield names. In the first quarter of 2026, Slate Grocery reported rental revenue of US$59.3 million, up 11.8% from last year. Net operating income (NOI) rose 3% to US$42.5 million while occupancy sat at 94.4%, which suggests tenants continue to value its locations.

What to watch

The leasing numbers added the real wow factor. Slate stock completed more than 725,000 square feet of leasing during the quarter. Renewals came in 18.9% above expiring rents, while new deals came in 49% above comparable average in-place rent. That shows the portfolio still carries embedded rent growth. Better yet, management said average in-place rent stood at US$12.98 per square foot, far below a market average of US$24.59.

Slate stock doesn’t need to reinvent itself to grow. It can keep signing leases at better rents, upgrade properties where it makes sense, and benefit from steady demand for necessity-based retail. The REIT owns 115 properties, so one lease or one store won’t make or break the whole story. The net asset value rose to US$13.79 per unit from US$13.65 at the end of 2025, which gives investors another small sign that the portfolio still has momentum.

A TFSA also suits this type of holding because monthly income can compound. Investors can reinvest distributions into more units, build cash for other stocks, or use the payments to balance a portfolio with steadier income. Therefore, a stock like this can help investors stay invested when markets feel noisy. That’s a nice setup for patient investors, especially during a spring market that still looks split between rate-cut hopes and recession worries.

Still, investors need to respect the risks. Slate stock carries debt, like all REITs, and higher interest rates can weigh on cash flow and valuation. The weighted average interest rate was 5%, with 90.2% of debt fixed. That helps, but refinancing risk never fully disappears.

Bottom line

Even with those risks, Slate stock looks like a strong May TFSA idea for investors who want monthly income with a defensive tilt. Grocery-anchored real estate isn’t glamorous, but it serves a real purpose. With a yield near 7.5%, steady tenants and room to lift rents, Slate stock offers a simple pitch: collect monthly cash while owning real estate people keep visiting.

The post A Perfect May TFSA With a 7.5% Monthly Payout appeared first on The Motley Fool Canada.

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More reading

• Got $14,000? Turn Your TFSA Into a Cash-Gushing Machine
• Here’s How Much You May Need in Your TFSA to Retire – and 3 Stocks That Could Help
• How to Put $14,000 in a TFSA to Work for Monthly Income
• 3 Dividend Stocks to Buy if Rates Stay Higher for Longer
• A TFSA Stock With a 7% Yield and Reliable Monthly Paycheques

Fool contributor Amy Legate-Wolfe has no position in any of the stocks mentioned. The Motley Fool recommends Slate Grocery REIT. The Motley Fool has a disclosure policy.