This 5.6% dividend stock pays cash every month

Getting paid every month from your investments can change the way you think about income. Instead of waiting for quarterly dividends, it feels great to receive cash on a regular monthly schedule. That can make your financial planning easier and give you more flexibility. A TSX Real Estate Investment Trust (REIT) currently offers an annualized return of 5.6% and rewards investors with nice dividends every month. In this article I will talk about H&R REIT (TSX:HR.UN) and tell you why it could be a great monthly dividend stock for income investors.

A diversified real estate platform with scale

H&R Real Estate Investment Trust is a large diversified Canadian REIT. At the end of the September 2025 quarter, it had total assets of approximately $9.6 billion. Based in North York, the trust owns interests in more than 25 million square feet of residential, industrial, office and retail properties in Canada and the United States.

The stock is currently trading at $10.84 per share, giving it a market cap of approximately $2.9 billion. At that price, investors will receive an annualized distribution of $0.60 per share, paid out as $0.05 per month. That amounts to a return of 5.6%.

Financial performance supports the payout

H&R’s ongoing financial growth trends appear stable, as it generated $81.1 million in operating funds (FFO) in the third quarter of 2025, compared to $82.3 million a year ago. Through the first nine months of 2025, FFO totaled $252 million, slightly higher than the $251 million reported during the same period in 2024.

Similarly, adjusted operating financing (AFFO), which is usually seen as a better measure of sustainable cash flow, came in at $205.6 million for the first nine months of 2025. That was virtually unchanged from $205.4 million in the previous year. During this period, H&R’s payout ratio was 50% of FFO and 61.3% of AFFO.

For a REIT, these payout levels are quite reasonable, as they suggest that the current monthly payout is comfortably supported by ongoing operating cash flow.

Strategic repositioning could unlock value

H&R REIT reported net losses in 2025, but these were primarily due to non-cash adjustments to the fair value of real estate assets, which totaled more than $750 million in the first nine months of the year. Many of these adjustments were related to properties classified as held for sale and changes in valuation assumptions, rather than a decline in rental income.

The trust is currently in talks to sell assets worth approximately $2.6 billion. Some of the office and retail properties have already been classified as held for sale and binding agreements are expected before the end of the year. By doing so, H&R plans to simplify its portfolio, strengthen financial flexibility and potentially improve long-term returns.

Silly takeaway

For foolish investors focused on dividend income, consistency is key. H&R has a diversified portfolio, stable operating cash flow and payout ratios that appear quite manageable.

Although real estate values ​​can rise and fall, H&R Real Estate Investment Trust remains an attractive stock to consider for long-term investors looking for a stable monthly income.