This 7.7% Dividend Stock Is My Top Pick for Monthly Income

A high-yield dividend stock can feel like the safest pick for immediate income. It solves a simple problem fast, sending cash to you on schedule. Inside a Tax-Free Savings Account (TFSA), that cash can land tax-free, which makes every dollar feel a little bigger. Still, safety does not come from the size of the yield. It comes from steady cash flow, manageable debt, and a payout policy that leaves room for bumps and repairs. So let’s look at one to consider on the TSX today.

SGR.UN

Slate Grocery REIT (TSX:SGR.UN) owns and operates U.S. grocery-anchored shopping centres. Picture the plaza where people buy milk, refill prescriptions, and grab last-minute school snacks. That daily-errands traffic gives the real estate investment trust (REIT) a defensive feel, because grocery and essential goods do not fall off a cliff when shoppers cut back elsewhere. Slate describes its portfolio as critical real estate infrastructure across major U.S. metro markets.

The unit price has moved like that of most REITs, with rates steering the mood. Shares have risen 14% in the last year alone at the time of writing. The best income entries often show up closer to the low end, when investors feel pessimistic about rates. Even near the highs, though, the payout still looks meaningful compared with many Canadian blue chips.

Slate’s distribution schedule makes it easy to understand why investors like it for “right now” income. It pays monthly, and the REIT has kept the distribution at $1.18 on an annual basis. Slate also publishes the record and payment dates, which helps investors plan contributions and reinvestment.

Into earnings

The latest earnings show a business that still grows in a slow-and-steady way. In the third quarter of 2025, Slate grew rental revenue 1.9% year over year to US$53.3 million and lifted net operating income 2.6% to about US$43 million. It also kept portfolio occupancy at 94.3%, which supports the case for dependable rent cheques. That kind of consistency matters more than flashy growth for an income-first REIT.

Cash flow coverage tells the real story behind a high yield. Slate reported funds from operations (FFO), a common REIT cash metric, of US$0.27 per unit in Q3 2025. It reported adjusted funds from operations (FFO), which subtracts more ongoing costs, of US$0.21 per unit. The REIT covered the payout comfortably on FFO with a payout ratio of 78.7%, but AFFO coverage ran tight at 99.9%. It also reported net asset value per unit of US$13.73 at quarter-end.

On valuation and outlook, Slate has a few helpful tailwinds. It completed 417,145 square feet of leasing in the quarter, and the dividend stock said average in-place rent sat at $12.82 per square foot versus a market average of $24.09. This suggests room for rent lifts as leases roll. It reported a weighted average interest rate of 5% with 90.4% of debt at fixed rates, plus a 53% debt-to-gross-book-value ratio and a 1.9 times fixed charge coverage ratio. At writing, as well, you can grab a 7.7% dividend yield, which could run even higher even with a small dip.

Bottom line

This dividend stock can earn “top pick for immediate income” status as it combines a monthly payout with properties people keep using, plus leasing momentum that supports gradual rent growth. You get cash flow you can reinvest inside a TFSA, and you don’t need a bull market for groceries to sell. Grocery tenants keep paying rent, and Slate keeps renewing leases at higher rates, so you get both income today and potential growth later. Even now, here’s what $7,000 can bring in from dividends alone.

COMPANYRECENT PRICENUMBER OF SHARESDIVIDENDANNUAL TOTAL PAYOUTFREQUENCYTOTAL INVESTMENTSGR.UN$15.63447$1.18$527.46Monthly$6,986.61

The risks stay real, including currency swings, refinancing costs, and that tight AFFO coverage in weaker quarters. If you size it sensibly and you want income you can feel right away, this REIT fits the brief.

The post This 7.7% Dividend Stock Is My Top Pick for Monthly Income appeared first on The Motley Fool Canada.

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More reading

• 3 Monthly Dividend Stocks to Buy and Hold Forever
• Want $252 in Super-Safe Monthly Dividends? Invest $41,500 in These 2 Ultra-High-Yield Stocks
• This 7.7% Dividend Stock Pays Me Each Month Like Clockwork
• Buy 2,000 Shares of This Dividend Stock for $198 a Month in Passive Income
• Canadian Retirees: 2 High-Yield Dividend Stocks to Buy and Hold Forever

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.