A Practically Perfect TFSA Stock With a 5.3% Monthly Payout for May 2026

Many investors use their Tax-Free Savings Accounts (TFSAs) to focus on long-term wealth creation, but earning consistent passive income along the way can make the journey even more rewarding. That’s why Foolish investors may want to hold some quality monthly dividend stocks in their TFSA that combine reliable payouts with stable underlying businesses.

Real estate investment trusts (REITs) can be especially attractive for monthly income because they generate recurring rental income and often return a large portion of their cash flow to investors. Among Canadian REITs, Crombie Real Estate Investment Trust (TSX:CRR.UN) stands out right now due to its resilient operations, defensive tenant mix, and recently increased monthly distribution. Here’s why Crombie REIT could be a strong TFSA stock to consider in May 2026.

Crombie REIT stock

Based in New Glasgow, Nova Scotia, Crombie owns, operates, and develops commercial real estate properties across Canada. Its portfolio mainly includes grocery-anchored retail properties, retail-related industrial assets, and mixed-use residential developments.

After climbing around 18% over the last year, Crombie stock currently trades near $16.82 per unit with a market cap of roughly $1.9 billion. At the current price, the REIT offers an annualized distribution yield of about 5.3%, with payouts made monthly.

One of Crombie’s biggest strengths is the stability of its portfolio. The REIT focuses heavily on necessity-based real estate, especially grocery-anchored properties, which tend to remain resilient even during periods of economic uncertainty.

That defensive positioning continued to support strong operational performance in the first quarter of 2026.

A stable tenant base is supporting reliable growth

In the quarter ended in March 2026, Crombie’s property revenue rose 3.6% year-over-year (YoY) to $127.1 million, while its operating income attributable to unitholders climbed 12.2% from a year ago to $27.8 million.

The REIT also posted solid growth in key cash flow metrics. Its funds from operations increased 6.5% YoY to $0.33 per unit, while adjusted funds from operations rose 7.4% to $0.29 per unit.

Operationally, the company remained very strong as its committed occupancy rate improved to 97.6%, up from 97.1% a year ago, while economic occupancy reached 96.8%. During the quarter, Crombie renewed 232,000 square feet of leases at rental rates 12.1% above expiring rates. On a weighted average basis, its renewal rents increased 13.2%.

Another positive sign for income-focused investors is Crombie’s improving balance sheet profile. Its debt-to-gross-fair-value ratio stood at 43% at the end of March 2026, improving from 43.6% a year ago despite ongoing investments in acquisitions and development projects.

Growth initiatives continue to expand the portfolio

Meanwhile, Crombie is continuing to invest in long-term growth opportunities. In the first quarter alone, the REIT acquired two retail-related industrial properties in Whitby, Ontario and Saint-Hubert, Quebec, representing 539,000 square feet for approximately $129.8 million.

It’s also progressing with development initiatives, including The Marlstone, a 291-unit residential rental project in downtown Halifax that is now nearing completion, with initial occupancy already underway.

Given all these positive factors, Crombie REIT could be worth a closer look right now, especially for TFSA investors seeking reliable monthly passive income.

The post A Practically Perfect TFSA Stock With a 5.3% Monthly Payout for May 2026 appeared first on The Motley Fool Canada.

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More reading

• 1 Incredibly Cheap Canadian Dividend Growth Stock to Buy Now and Hold for Decades
• A Canadian Dividend Stock Down 13% to Buy and Own for Decades
• How Big Should Your TFSA Be Before You Can Retire?
• TFSA Investors: Here’s the Only Time Using a Taxable Account Is a Better Choice
• A Perfect May TFSA Stock With a 3.8% Payout, Paid Monthly

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.