A Perfect TFSA Stock: A 4% Yield With Constant Paycheques

Dividend stocks can continue generating income across different market conditions, helping investors stay patient. And when dividends are paid on a monthly basis, they can make a Tax-Free Savings Account (TFSA) feel much more useful for long-term investors.

For TFSA investors, the goal is not simply to chase the highest possible yield, but to find a payout that looks supported by durable assets and repeatable cash flow. That is especially true when the income comes from a business linked to everyday needs rather than a short-lived market trend.

That is why I find Killam Apartment REIT (TSX:KMP.UN) appealing right now. This residential real estate investment trust (REIT) owns and runs apartments and manufactured home communities across Canada, giving investors exposure to a basic need that tends to remain resilient over time. Let’s take a closer look at its recent financials and fundamental outlook to find out why this TSX-listed monthly income stock deserves a closer look today.

A residential REIT built for monthly income

Killam stock recently traded near $18.35 per unit, giving the trust a market cap of about $2.2 billion. Its dividend yield currently sits close to 4%, and because the payout is made monthly, it could be especially useful for TFSA investors who want steady passive income.

The trust owns a $5.5 billion portfolio of apartments and manufactured home communities, with a strong presence in Atlantic Canada. That mix gives Killam a broad rental base, while its apartment portfolio benefits from healthy demand and high occupancy.

Its apartment portfolio includes more than 17,900 units, while its manufactured home community business adds over 5,800 sites. That scale gives Killam a meaningful operating footprint without stretching into an overly complicated business model.

Cash flow remains stable

In the first quarter of 2026, Killam generated net operating income (NOI) of $62 million, up 5.1% from a year ago. Its same-property apartment portfolio also delivered 4% year-over-year (YoY) NOI growth, supported by a 3.6% increase in same-property apartment revenue and occupancy of 97%.

The REIT’s funds from operations (FFO) for the quarter were $0.28, while adjusted funds from operations (AFFO) per unit rose 4.3% YoY to $0.24. Those numbers matter because stable FFO and AFFO help back the trust’s monthly dividend distributions.

Encouraged by these results, the company recently also raised its same-property apartment revenue growth target for 2026 to more than 3.5%, reflecting positive leasing momentum.

Why this monthly dividend stock could fit a TFSA

Beyond its strong operational and financial growth, Killam is still investing in future growth. Its Brightwood development in Waterloo was completed ahead of schedule and below budget, while Eventide is expected to be completed by the end of the year. The REIT is also planning up to $150 million in non-core asset sales, with proceeds expected to support share buybacks.

Killam has already leaned into that buyback strategy, deploying more than $6 million in the first quarter alone. Moreover, with stable rental demand, monthly income, and a yield close to 4%, Killam stock currently offers a simple, cash-generating profile that could work well inside a TFSA for patient investors.

The post A Perfect TFSA Stock: A 4% Yield With Constant Paycheques appeared first on The Motley Fool Canada.

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More reading

• The Top Canadian Stock to Buy in 2026 With $26,000
• A Perfect May TFSA With a 4% Monthly Payout
• 2 Dividend Stocks Paying Cash Every Month

Fool contributor Jitendra Parashar has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.