AN 8.1% DIVIDEND STOCK PAYING CASH EVERY SINGLE MONTH

Canadians are feeling more financial pressure than they have in years. A BMO Real Financial Progress Index survey released in June 2025 found that inflation concerns rose by 16 points between March and April. Worries about the cost of living hit 78%, while recession fears reached 74%. That kind of stress leads many to look for consistent sources of income. For some, this means turning to the stock market, specifically, to dividend stocks that pay out monthly. One name that stands out is Slate Grocery REIT (TSX:SGR.UN), a real estate investment trust offering an attractive yield and regular cash.

About Slate

Slate Grocery REIT focuses on grocery-anchored real estate across the United States. It owns 117 properties with over 15 million square feet of space. The tenants include large U.S. grocery chains and discount retailers that consumers turn to even during economic downturns. This gives the REIT a strong layer of stability, which is key when looking for consistent monthly income. Rent comes in whether markets are up or down, and that rent fuels monthly distributions to unitholders.

As of writing, Slate Grocery REIT trades at about $14.60 per unit. It offers an annual dividend of $1.19 per unit, and a yield just over 8%. For investors looking to make regular income from a TFSA or other portfolio, that kind of monthly cash flow is hard to ignore.

What’s more, the REIT has shown strong operating performance to support that payout. In its most recent earnings report for Q1 2025, Slate Grocery REIT reported rental revenue of US$53.1 million. Net operating income was up 4.3% year-over-year on a same-property basis. That growth came from higher base rents, strong leasing activity, and occupancy holding steady around 94%. Net income came in at US$16.1 million, or about US$0.14 per unit. These numbers help show why management has been able to maintain the dividend, despite broader uncertainty in commercial real estate.

Staying strong

Of course, it’s important to look at payout ratios, especially for REITs. Slate Grocery REIT’s AFFO payout ratio in the most recent quarter came in slightly above 100%. That’s a bit high, but not unusual for REITs, especially those focused on income. A high payout ratio suggests the REIT isn’t reinvesting much into expansion but instead prioritizing consistent distributions. As long as rental income remains stable, this approach works well for income-focused investors.

Another factor worth noting is the U.S. dollar exposure. Because Slate Grocery REIT’s properties and rent are based in the United States, the distributions are declared in U.S. dollars. For Canadian investors, this can work in their favour. If the Canadian dollar weakens, the income actually rises when converted back into Canadian funds. It adds an element of diversification that many TSX-listed REITs don’t offer.

That said, Slate Grocery REIT does carry some risk. Like most REITs, it uses leverage. If interest rates stay higher for longer, refinancing costs could cut into income. And while grocery-anchored retail is a defensive sector, it’s still vulnerable to economic slowdowns. A major recession could impact tenant performance, though the focus on essential retail helps buffer that risk.

Bottom line

Overall, Slate Grocery REIT is built to do one thing very well: pay investors in cash, every single month. That kind of consistency is valuable, especially in today’s environment. The combination of strong occupancy, reliable tenants, and an 8.1% dividend yield makes it a compelling option for Canadians building an income stream. In fact, right now a $10,000 investment could bring in $806 annually, or about $67 each month!

The latest BMO survey shows how many people are worried about money right now. And that concern isn’t going away quickly. But building a small portfolio of dividend payers like Slate Grocery REIT can provide monthly income and a little more peace of mind. It’s a quiet, steady solution in a noisy market, and that’s worth a second look.

The post An 8.1% Dividend Stock Paying Cash Every Single Month appeared first on The Motley Fool Canada.

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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.

2025-06-13T01:40:42Z