This Perfect TFSA Stock Yields 6.4% Annually and Pays Cash Every Single Month

If you want monthly income plus long-term growth potential sheltered inside your Tax-Free Savings Account (TFSA), Vital Infrastructure Property Trust (TSX:VIT.LUN) deserves a serious look right now. The Canadian dividend stock currently yields around 6.4% annually and distributes cash monthly, making it attractive to income-seeking investors.

Why Vital Infrastructure is a good TFSA stock to own

Vital Infrastructure Property Trust, formerly known as Northwest Healthcare Properties REIT, is Canada’s only publicly listed real estate investment trust (REIT) focused purely on critical healthcare infrastructure.

As of early 2026, the REIT holds interests in 133 income-producing properties totalling 13 million square feet of gross leasable area. Its portfolio spans Canada, the United States, Australia, Brazil, and Europe.

Vital owns hospitals, medical outpatient buildings, ambulatory surgery centers, diagnostic and imaging facilities, and rehabilitation centers. Healthcare tenants sign long, inflation-indexed leases and operate from locations tied directly to patient care.

The weighted-average lease term across Vital’s portfolio exceeds 12 years. That is the longest in the Canadian REIT sector, according to CEO Zachary Vaughan. Portfolio occupancy sits above 96%, which should help it generate steady cash flows over the upcoming decade.

A strong performance in Q1

In the first quarter (Q1) of 2026, Vital reported same-property net operating income growth of 3% year over year on a proportionate basis, coming in at $57.4 million for the quarter. The growth was driven by contractual rent escalations, higher parking income, and improved cost recoveries.

A decision to outsource facilities management in the Canadian portfolio late last year added costs that weighed on results. Strip that out, and same-property net operating income (NOI) growth would have been closer to 4%.

Funds from operations (FFO) came in at $0.11 per unit, up from $0.10 in the year-ago period. The adjusted FFO payout ratio was 87%, an improvement from 92% in the same period last year. That is a healthy payout ratio for a REIT, one that suggests the distribution is well covered.

The TSX dividend stock is focusing on its balance sheet

One concern that has followed VIT for years is leverage. Proportionate leverage stood at roughly 52.7% at the end of Q1, and the company expects it to fall below 50% once European sale proceeds fully land.

Vital agreed to sell a portfolio of 33 properties across the Netherlands and Germany. The Netherlands portion closed in late April, and the German assets are expected to close in Q2. Total net proceeds will be around $145 million, earmarked for debt reduction and future growth investments.

Available liquidity already sits above $400 million. The company is targeting a couple of hundred million in new acquisitions this year across Canada and the United States, funded through a combination of recycling proceeds and existing liquidity.

A new development with Royal Victoria Hospital in Barrie, Ontario, is expected to generate roughly $9 million in annual NOI when completed in 2029.

At its core, Vital’s business is underpinned by something no market cycle can easily erode: aging populations and growing demand for healthcare real estate.

Canada’s healthcare system, along with those in Australia and Brazil, continues to shift care from large hospitals toward outpatient and ambulatory settings.

Vital is actively partnering with health systems to build the infrastructure that enables that shift.

For TFSA investors seeking steady monthly income and a credible growth story, VIT stands out as a rare combination in today’s market. The 6.4% yield is real, the portfolio is essential, and the balance sheet is improving. That is a compelling case.

The post This Perfect TFSA Stock Yields 6.4% Annually and Pays Cash Every Single Month appeared first on The Motley Fool Canada.

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More reading

• 4 Canadian Dividend Stocks to Buy If You Want $500 a Month
• A Perfect TFSA Stock: A 6.7% Yield With Constant Paycheques
• A 6.4% Dividend Stock Paying Out Monthly
• Passive Income Alert: 3 TSX Stocks for Monthly Cash Flow
• A Perfect May TFSA Stock With a 6.3% Yield

Fool contributor Aditya Raghunath has no position in any of the stocks mentioned. The Motley Fool recommends Vital Infrastructure Property Trust. The Motley Fool has a disclosure policy.