The Ideal TFSA Stock: 8.2% Yield Paying Cash Out Every Month

A high-yielding dividend stock that pays every month can be an ideal Tax-Free Savings Account (TFSA) holding. It gives you a steady, predictable stream of cash that lands in your account tax-free, giving your budget instant breathing room.

Monthly payouts match the rhythm of real life with bills, groceries, and kids’ activities, while the TFSA shields every dollar from taxes so the full amount can be reinvested to compound even faster. It feels like getting a small bonus twelve times a year, and over time, those dependable deposits can grow into a powerful income engine that doesn’t depend on market timing or luck. And this one? It offers stability and a high yield.

SGR

Slate Grocery REIT (TSX:SGR.UN) is a U.S. grocery-anchored real estate investment trust (REIT) designed around tenants that people rely on no matter what’s happening in the economy. With properties leased to major supermarket chains, discount grocers, pharmacies, and essential retailers, its portfolio generates resilient rental income even during downturns.

The REIT focuses on neighbourhood shopping centres, places where foot traffic stays steady. That’s because groceries and household necessities aren’t discretionary. This defensive tenant base gives SGR.UN predictable cash flow, high occupancy, and stability that sets it apart from more volatile retail REITs. The REIT also benefits from being U.S.-focused, giving Canadian investors geographic diversification while still trading on the TSX.

Into earnings

Recent earnings showed the strength of this model, with the REIT reporting consistently high occupancy and stable same-property net operating income. Rental collections remained near pre-pandemic levels, demonstrating just how resilient grocery-anchored real estate can be. Slate also grew its adjusted funds from operations, driven by favourable leasing spreads and newly acquired properties contributing meaningfully to revenue.

While interest costs ticked higher, Slate maintained a disciplined balance-sheet strategy. This included staggered debt maturities and access to sufficient liquidity to buffer rate pressures. Management reaffirmed the monthly distribution, demonstrating confidence in the REIT’s underlying cash flow. In the latest quarter, the REIT also highlighted progress in strengthening its portfolio quality by selectively selling non-core assets and recycling capital into stronger markets.

This helped improve cash flow durability while reducing refinancing risk over the next few years. Even in a challenging macro environment, the REIT’s adjusted funds from operations (AFFO) payout ratio remained within a sustainable range. This gives investors added reassurance that the dividend is supported by actual earnings rather than debt. The combination of stable tenants, disciplined capital management, and consistent rent growth gave Slate Grocery a solid financial foundation heading into the next year.

A long-term win

What also makes Slate Grocery REIT interesting is its long-term potential for steady cash generation and rental growth. Grocery retailers tend to sign long leases and anchor entire plazas, encouraging other creditworthy tenants to cluster around them. This dynamic supports strong rent collection and provides room for the REIT to negotiate favourable lease renewals.

SGR.UN has also been strategically acquiring properties at attractive cap rates, expanding in markets where population growth remains strong, and competition is limited. Over time, this measured acquisition strategy helps grow its portfolio, cash flow, and ability to maintain its distribution.

All together, SGR.UN is an ideal TFSA stock. It delivers exactly what long-term Canadian investors want: dependable, high-yield, monthly income. All backed by tenants that thrive in all economic environments. Grocery stores don’t close during recessions, so the REIT’s cash flow stays reliable even when other sectors falter.

Bottom line

Inside a TFSA, the high monthly yield becomes even more powerful. None of it gets taxed. Every payout either lands directly in your pocket or compounds into more units that grow your income further. And right now, here’s what even $7,000 could get you.

COMPANYRECENT PRICENUMBER OF SHARESDIVIDENDANNUAL TOTAL PAYOUTFREQUENCYTOTAL INVESTMENTSGR.UN$14.87470$1.21$568.70Monthly$6,988.90

The REIT’s U.S. focus adds diversification, and its strategic acquisitions give it a clear long-term growth path. For Canadians looking to build a tax-free income engine they can count on every single month, SGR.UN checks every box.

The post The Ideal TFSA Stock: 8.2% Yield Paying Cash Out Every Month appeared first on The Motley Fool Canada.

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More reading

• Canadian Investors: The Best $7,000 TFSA Approach
• 8% Dividend Yield? I’m Buying This Stellar Stock in Bulk
• The Top 3 Canadian Dividend Stocks I Think Belong in Everyone’s Portfolio
• Invest $25,000 in This Dividend Stock for $166 in Monthly Passive Income
• How to Use Your TFSA to Earn Ultimate Passive Income

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.