Is a Weaker Canadian Dollar a Gift? 1 Stock I’d Buy

The loonie can make winners fast. It can also expose weak spots. When the Canadian dollar falls, some companies get a small tailwind. Exporters, businesses earning foreign revenue, and firms tied to global demand can see those foreign dollars translate into more Canadian dollars. But a weaker loonie can also lift imported costs, squeeze consumers, and make U.S.-priced supplies or debt more painful. So investors need to look past the currency headline.

The better setup comes from a company with steady cash flow, a clear niche, and income investors who can collect while they wait. Timbercreek Financial (TSX:TF) fits that conversation. It’s not a perfect currency hedge. It’s a high-yield Canadian income stock, but if currency weakness keeps pressure on inflation, rates, real estate, and income-seeking portfolios, this monthly dividend stock deserves a closer look.

TF

Timbercreek Financial is a Toronto-based mortgage investment company. It provides shorter-term commercial real estate loans, mostly secured by income-producing properties. So it doesn’t operate like a traditional bank. It doesn’t chase every type of borrower or try to sell every financial product. Instead, it focuses on flexible lending backed by real estate collateral.

That niche looks especially relevant now as investors still want income, yet many traditional dividend stocks look stretched or uncertain. Timbercreek’s net mortgage portfolio reached $1.2 billion in the first quarter of 2026, up $160.9 million, or 14.9%, from a year earlier. That’s the kind of growth income investors want to see from a lender, especially when the dividend stock trades near its lows.

The last year focused on rebuilding lending momentum and managing risk. In the first quarter, Timbercreek advanced $224.2 million in new and existing net mortgages. Repayments were also strong, with about $223 million coming back during the quarter. That shows an active portfolio, not a frozen one. Management also expects funding momentum to continue through 2026, with a focus on multi-family opportunities across target markets.

What to watch

Still, investors shouldn’t ignore the risk. Timbercreek lends to commercial real estate. Higher rates, weaker property values, and stressed borrowers can bite quickly. The dividend stock can benefit from attractive loan yields in a higher-rate world, but those same higher rates can also test borrowers.

The latest earnings looked steady, though not spectacular. Distributable income came in at $14.5 million, or $0.18 per share, compared with $15.4 million, or $0.19 per share, a year earlier. Net investment income landed at $25.1 million, all helping to support the ample dividend. Timbercreek declared $14.3 million in dividends, or $0.17 per share, for a distributable income payout ratio of 98.5%. The annual dividend sits at $0.69 per share, paid monthly. With the dividend stock recently around $6.46, the yield lands near 10.8%. That can bring in a lot from a $7,000 investment.

COMPANYRECENT PRICENUMBER OF SHARESANNUAL DIVIDENDANNUAL TOTAL PAYOUTFREQUENCYTOTAL INVESTMENTTF$6.421090$0.69$752.10Monthly$6,997.80

The opportunity comes from that tension. Timbercreek trades near its 52-week low and offers monthly income from a sizeable mortgage book. If multi-family lending stays resilient and credit quality holds, today’s yield could look too generous. If real estate stress worsens, the market’s caution will make sense.

Bottom line

A weaker Canadian dollar isn’t automatically good or bad. It rewards some companies, hurts others, and forces income investors to think harder about cash flow. Timbercreek offers a bold income idea, not a perfect safe haven. For investors comfortable with real estate lending risk, it could be one TSX stock worth buying while the loonie stays weak and the hunt for income remains strong.

The post Is a Weaker Canadian Dollar a Gift? 1 Stock I’d Buy appeared first on The Motley Fool Canada.

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More reading

• 2 Canadian Stocks That Could Utterly Destroy a $100,000 Portfolio
• 2 Stocks That Canadian Retirees May Want to Think Twice About Owning
• 3 Ultra-High-Yield Dividend Stocks I’m Still Buying

Fool contributor Amy Legate-Wolfe 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.