This 7% Monthly Dividend Stock Wants to Prove It’s More Than Just a High Yield

If you scan a list of high-yield stocks on the TSX, Slate Grocery REIT (TSX:SRG.UN) should be part of that watchlist.

It offers a monthly payout with a yield of nearly 7% as of July 2026. Moreover, over the last three years, Canadian dividend stocks have returned 70% to shareholders after adjusting for dividends.  

Slate Grocery REIT owns U.S. shopping centres anchored by grocery stores. Its recession-resistant portfolio makes it a top investment for income-seeking conservative investors.  

An overview of this Canadian monthly dividend stock

Slate Grocery REIT is one of the larger owners of U.S. grocery-anchored real estate trading on the TSX. The real estate investment trust ended 2025 with an occupancy rate of 94.4%, while renewal leases were signed at rents 14.9% above the expiring rate. Further, new leases came in at almost 35% above the portfolio average.

The REIT’s average in-place rent is $12.86 per square foot, well below the market average of $24.34. That gap offers management significant room to keep pushing rents higher as leases roll over, which supports cash flow and the distribution over time.

On the debt side, the REIT carries a weighted-average interest rate of 5%, with the vast majority of that debt locked in at fixed rates. At the start of 2026, it refinanced an eight-property portfolio for $90 million, using a mix of floating-rate debt and a rate swap to achieve an effective cost near 5.3%.

Management also said its cap rate on properties still runs above its borrowing cost, meaning acquisitions can still add value rather than dilute unitholders.

A special committee changes the conversation

Slate Grocery;’s board recently confirmed it has formed a special committee of independent trustees after receiving an unsolicited proposal from affiliates of Slate Asset Management, the firm that manages the REIT.

Slate Asset Management can consider everything from keeping the status quo to a full sale of the company, and it has already started reaching out to third parties for competing proposals.

The committee chair publicly said that the underlying portfolio’s value may not be fully reflected in the public market price, which is a polite way of saying the board believes the stock is undervalued relative to its intrinsic value.

The REIT has hired Evercore as its financial advisor and engaged legal and real estate advisors to run the process.

My take on Slate Grocery REIT

I think Slate Grocery REIT remains a top investment in July 2026. It enjoys stable occupancy rates while the leasing spreads continue to climb, and the rent gap could be a key driver of cash flow growth.

That said, I would not buy this stock today purely for the 6.9% yield. The strategic review adds a layer of uncertainty that yield chasers often ignore.

A sale at a premium could reward unitholders quickly, while a drawn-out process without a deal could leave the stock in limbo.

For Canadian income investors who already understand REITs and want exposure to defensive U.S. real estate, I see it as a name worth holding through the review rather than starting a new position blind.

The post This 7% Monthly Dividend Stock Wants to Prove It’s More Than Just a High Yield appeared first on The Motley Fool Canada.

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More reading

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Fool contributor Aditya Raghunath has no position in any of the stocks mentioned. The Motley Fool recommends Slate Grocery REIT. The Motley Fool has a disclosure policy.