By Christopher Liew, CFA at The Motley Fool Canada
Many income-focused investors prefer a monthly payment schedule to a quarterly one if stocks have the exact same risks. Besides better liquidity to cover living expenses, money compounds faster if you invest dividends instead of collecting them. It all depends on your financial needs and goals.
There are quite a number of choices on the TSX, including stocks, exchange-traded funds (ETFs), and real estate investment trusts (REITs). Since the vast majority of publicly-listed Canadian companies pay quarterly dividends, investors have to mix these different types of payers. The result is a well-balanced portfolio.
Standout monthly income provider
A standout option today for monthly income-seekers is Granite REIT (TSX:GRT.UN). With this pick, dividend sustainability, not yield, is the primary consideration. The 3.8% yield is higher than the TSX’s average dividend yield of 2% to 3%. As of this writing, the share price is $92.79, up 15.5% year-to-date. The 53.5% payout ratio lends confidence to invest, too.
The earnings potential is decent, especially in a Tax-Free Savings Account (TFSA). Assuming your available contribution room is $21,000, the money will produce $66.50 in 100% tax-free income every month ($798 annually). The money compounds tax-free to $30,689.54 if dividends are reinvested.
Fully supports e-commerce development
The $5.6 billion REIT focuses on developing, owning, and managing logistics, warehouse, and industrial properties. Granite set up these properties in close proximity to key distribution and e-commerce markets. Its rental properties are located in North America (Canada and the U.S.) and in four European countries (Austria, Germany, the U.K., and the Netherlands). The concentration, however, is in America, at 51.9% of the total portfolio.
Granite takes pride in its high-quality, credit-worthy tenant base. Magna International is its long-standing anchor tenant. The REIT was established in 2003 when the renowned automotive supplier decided to spin off its automotive facilities. Granite has since managed the properties and expanded into multinational logistics assets to lessen reliance on a single tenant and the automotive sector.
The REIT fully supports e-commerce development. Other leased properties include distribution warehouses and special-purpose facilities. A strong e-commerce trend involves cold storage for food and pharmaceuticals. Vertical construction is ongoing for portfolio enhancement and tenant diversification.
According to its President and CEO, Kevin Gorrie, Granite entered 2026 with positive momentum. He notes the strong 57% renewal rate amid global uncertainty and stagnating economic growth. The average rent increase is approximately 10%.
Strong start, new opportunities
In the three months ending March 31, 2026, revenue and NOI increased 7.2% and 6.8%, respectively, to $165.8 million and $134.2 million compared to Q1 2025. Notably, the average rental rate spread over expiring rents during the quarter was 23%.
As of May 6, 2026, committed occupancy is a high 98.6%, while the weighted average lease term (WALE) is 5.3 years. The REIT sees potential benefits from rising demand for AI and cloud infrastructure buildouts. Granite is prepared to capitalize and cater to AI-related tenants and data centres.
One of the best things
A monthly payout is one of the best things to ever happen to income investing. However, the source must be reliable, a condition that is non-negotiable. Fortunately, Granite REIT checks all the safety boxes and minimizes the selection process. Now is the time to take a position before the next bull run.
The post A 3.8% Dividend Stock That Pays Cash Monthly appeared first on The Motley Fool Canada.
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Fool contributor Christopher Liew has no position in any of the stocks mentioned. The Motley Fool recommends Granite Real Estate Investment Trust and Magna International. The Motley Fool has a disclosure policy.
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