This 5.2% dividend stock pays cash every month

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

DIR

Dream Industrial REIT (TSX:DIR.UN) owns and operates industrial real estate, including warehouses, distribution centers and logistics buildings. It has a large Canadian footprint and meaningful European exposure. Industrial real estate is important because it supports daily trade. Goods still need to be moved, retailers still need storage, and manufacturers still need space, even as the economy slows. That question is usually more persistent than people think.

Over the past year, the editorial has lost some of its power. Management reported strong rental spreads on new leases and renewals, indicating pricing power. It also highlighted a high volume of leasing activity across the portfolio, indicating that tenants still want to go to the 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 was balance sheet management in a world of higher interest rates. Dream has been refinancing debt issued at lower rates, while also recycling capital through dispositions and selective acquisitions. Industrial real estate investment trusts (REITs) can look great when money is cheap, but look shaky when interest rates rise. The best operators maintain access to capital, spread debt maturities and sell assets when prices look attractive so they can continue to finance growth without stretching the payout.

Revenue support

In terms of earnings power, the figures appear stable. For 2025, diluted operating funds (FFO) were $1.05 per unit, compared to $1.00 the prior year. In the fourth quarter, diluted funds from operations per unit amounted to $0.27, compared to $0.26 a year earlier. Comparative properties’ net operating income on a constant currency basis increased for the year to $404.9 million, and net operating income (NOI) for the fourth quarter was $107.1 million, a meaningful increase year over year. These are the lines that tell you that the portfolio’s rental growth and lease execution are showing up in the cash flow.

The payout remained the same, which is what investors want on a monthly basis, but the most important detail is the coverage. The REIT reported an FFO payout ratio of 67.3% for 2025, suggesting there is room for the distribution. It also ended 2025 with an in-place occupancy of 95.5% and an in-place plus committed occupancy of 96.2%. A high occupancy rate does not eliminate the risk, but it does support the predictability of the monthly check.

Looking ahead, the prospects depend on two forces that will shape all real estate in 2026. First, whether industrial rent growth remains robust as new supply competes for tenants. Second, how refinancing will proceed if interest rates remain higher than the market ever expected. Dream’s recent performance suggests the company has leverage, including sustained lease spreads, completed development projects and capital recycling. Still, the company must continue to perform, because refinancing costs can silently erode growth if management loses control of the balance sheet.

Silly takeaway

Valuation is where these types of stocks can become interesting. Industrial REIT units may trade below their reported net asset value if investors are concerned about interest rates, even if the bottom line remains healthy. That creates the possibility of ‘income plus patience’. You collect the monthly payment while you wait for sentiment to improve. The risk is that sentiment can remain sour for longer than you want, and unit prices can fluctuate even if the business remains stable. Still, even $7,000 could provide ample income.

COMPANY	RECENT PRICE	NUMBER OF SHARES	ANNUAL DIVIDEND	ANNUAL TOTAL PAYOUT	FREQUENCY	TOTAL INVESTMENT
DIR. A	$13.22	529	$0.70	$370.30	Monthly	$6,993.38

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