The Ideal TFSA Stock for May: Paying 5.4% Each Month

By Jitendra Parashar at The Motley Fool Canada

A Tax-Free Savings Account (TFSA) can become a powerful wealth-building tool if you fill it with investments that generate reliable dividend income and long-term growth. And while plenty of Canadian dividend stocks offer attractive yields, monthly payers can make your portfolio even more rewarding by creating a more consistent stream of passive income.

However, instead of simply chasing the highest yield available, you may want to choose businesses with stable operations and dependable cash flows. That’s exactly why some Canadian real estate investment trusts (REITs) continue standing out for income-focused investors. In this article, I’ll highlight the top TSX monthly dividend stock that could be an ideal TFSA addition right now.

CT Real Estate Investment Trust stock

For investors who prefer steady, predictable income, CT Real Estate Investment Trust (TSX:CRT.UN) is worth considering right now. This Toronto-based REIT mainly focuses on owning and managing income-producing commercial properties across Canada.

Over the last year, CT REIT stock has climbed nearly 18%. As a result, it now trades at $17.47 per share with a market cap of about $1.9 billion. More importantly for TFSA investors, the REIT currently offers an annualized dividend yield of 5.4%, with consistent monthly payouts.

In short, the REIT owns more than 375 properties totalling over 31 million square feet of gross leasable area (GLA). Its focus on high-quality retail real estate and long-term lease agreements has helped it create a stable and predictable income stream for shareholders.

Solid occupancy rate driving financial growth

CT REIT’s recent financial performance also supports its long-term investment appeal. In its latest earnings report for the quarter ended in December 2025, the REIT posted a 41.4% year-over-year (YoY) surge in its net profit. This growth was largely driven by higher property revenues and positive fair value adjustments on investment properties.

Its net operating income for the quarter also rose 4.9% YoY, backed by quality acquisitions, development projects, and property intensification initiatives completed over recent years. Similarly, CT’s adjusted quarterly funds from operations per unit climbed 2.9% from a year ago, which is an important metric because it directly reflects the REIT’s ability to sustain and potentially grow its monthly distributions.

One major factor supporting CT REIT’s stability is its exceptionally high occupancy rate of 99.5%. That level of occupancy highlights the strength of its property portfolio and the reliability of its rental income stream.

Outstanding tenant base continues to support its business

CT REIT has a strong tenant base. Canadian Tire Corporation remains its anchor tenant, accounting for more than 90% of annualized base minimum rent. While tenant concentration can sometimes create risks, Canadian Tire’s strong national presence and well-established retail footprint provide the REIT with a dependable long-term revenue base.

It also continues expanding its portfolio through ongoing development projects. At the end of 2025, nearly 629,000 square feet of GLA remained under development. These projects reflect an estimated investment of about $329 million upon completion.

Why it could be an ideal monthly dividend stock for TFSA investors

Monthly dividend stocks can become powerful inside a TFSA because all eligible investment growth and income remain tax-free. That allows investors to reinvest distributions more efficiently and potentially benefit from long-term compounding.

CT REIT’s disciplined investment approach and focus on high-quality commercial properties continue to strengthen its long-term outlook. Its ability to consistently grow earnings, distributions, and net asset value over time makes it even more attractive for investors seeking dependable TFSA income.

That’s why CT REIT stock could deserve a closer look this May, especially for investors looking for a stable monthly income stock backed by strong real estate assets and reliable financial performance.

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