This 5.2% Dividend Stock Pays Cash Every Single Month

A strong monthly dividend stock has two jobs. It needs to pay reliably, and it needs to protect the cash engine that funds the payout. That usually means stable recurring revenue, a payout ratio with a cushion, and a balance sheet that can handle refinancing without drama. If the business can also grow its cash flow per unit through rent increases, leasing spreads, and smart capital recycling, the monthly income becomes sustainable instead of stressful. So let’s look at one that reduces that stress.

DIR

Dream Industrial REIT (TSX:DIR.UN) owns and operates industrial real estate, including warehouses, distribution centres, and logistics buildings. It has a large Canadian footprint and meaningful European exposure. Industrial real estate matters as it supports everyday commerce. Goods still need to move, retailers still need storage, and manufacturers still need space, even when the economy slows. That demand tends to be stickier than people assume.

Over the last year, the headline story has been leasing strength. Management reported strong rental spreads on new leases and renewals, which signals pricing power. It also highlighted a large volume of leasing activity across its portfolio, suggesting tenants still want its locations. In practical terms, strong spreads and strong occupancy usually translate into rising net operating income, which is what you want to see if you care about dividends.

The other major theme has been balance-sheet management in a higher-rate world. Dream has been refinancing debt that was issued at lower rates, while also recycling capital through dispositions and selective acquisitions. Industrial real estate investment trusts (REIT) can look fantastic when money is cheap, then look shaky when rates rise. The best operators keep access to capital, stagger debt maturities, and sell assets when pricing looks attractive, so they can keep funding growth without stretching the payout.

Earnings support

On earnings power, the numbers have looked steady. For 2025, diluted funds from operations (FFO) came in at $1.05 per unit, up from $1.00 the prior year. In the fourth quarter, diluted funds from operations per unit came in at $0.27 versus $0.26 a year earlier. Comparative properties net operating income on a constant-currency basis rose to $404.9 million for the year, and fourth-quarter comparative properties net operating income (NOI) came in at $107.1 million, up meaningfully year over year. These are the lines that tell you the portfolio’s rent growth and leasing execution are showing up in cash flow.

The distribution stayed level, which is what monthly income investors want, but the more important detail is coverage. The REIT reported an FFO payout ratio of 67.3% for 2025, which suggests the distribution has room. It also ended 2025 with in-place occupancy of 95.5% and in-place plus committed occupancy of 96.2%. High occupancy does not eliminate risk, but it supports the predictability of the monthly cheque.

Looking ahead, the outlook hinges on two forces that will shape all real estate in 2026. First, whether industrial rent growth stays firm as new supply competes for tenants. Second, how refinancing plays out if interest rates stay higher than the market once expected. Dream’s recent performance suggests it has levers to pull, including continued leasing spreads, development completions, and capital recycling. Still, it has to keep executing because refinancing costs can quietly eat into growth if management loses control of the balance sheet.

Foolish takeaway

Valuation is where this kind of stock can get interesting. Industrial REIT units can trade below their reported net asset value when investors worry about rates, even if operating results remain healthy. That creates the “income plus patience” opportunity. You collect the monthly distribution while you wait for sentiment to improve. The risk is that sentiment can stay sour longer than you want, and unit prices can swing even when the business stays stable. Still, even $7,000 could bring in ample income.

COMPANYRECENT PRICENUMBER OF SHARESANNUAL DIVIDENDANNUAL TOTAL PAYOUTFREQUENCYTOTAL INVESTMENTDIR.UN$13.22529$0.70$370.30Monthly$6,993.38

If you can handle price volatility and you care about steady monthly cash flow backed by industrial fundamentals, this one dividend stock can still make a strong case.

The post This 5.2% Dividend Stock Pays 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 Dream Industrial Real Estate Investment Trust. The Motley Fool has a disclosure policy.