1 Under-$50 Dividend Stock to Buy for Monthly Passive Income

Investors looking to establish a monthly passive-income stream will be hard-pressed to find a better option over this under-$50 gem.

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There’s no shortage of great dividend stocks on the market. Some of those great dividend stocks provide investors with an opportunity to earn monthly passive income.

Here’s a look at one dividend stock that can provide that monthly passive income that currently trades for less than $50.

The best dividend stock you’ve never heard of

Exchange Income (TSX:EIF) is one of those companies few know about, but once discovered, fewer will forget. The Winnipeg-based company operates an acquisition-focused company that includes over a dozen subsidiary companies.

Those subsidiaries operate across aviation and manufacturing verticals, which provides the company with a diversification element. The company also boasts significant defensive appeal that stems from how and where those subsidiaries operate.

Exchange’s subsidiaries all have three key factors in common. First, they provide a necessary service. A key example of this is providing passenger, cargo, and medevac services to Canada’s remote north.

The second key point is that the subsidiaries provide a service or product where there is limited, if any, competition. Apart from the example noted above from the aviation segment, cell tower manufacturing is another key example to note.

Finally, and perhaps most importantly, those subsidiaries all generate cash for Exchange. This helps the company to continue to invest in other acquisitions and pay out a very generous monthly dividend.

Despite the defensive appeal that comes from Exchange’s diversified operation, the company trades down year to date by over 10%. For investors looking to generate monthly passive income for under $50 a share, Exchange is hard to ignore.

Let’s talk about that monthly passive income

One of the main reasons why investors flock to Exchange is for its juicy dividend. As of the time of writing, Exchange offers investors an appetizing 5.86% yield, making it one of the better-paying options on the market right now.

Those investors with $40,000 to allocate to Exchange (always as part of a larger, diversified portfolio) can expect to generate a monthly income of just over $195.

Adding to that appeal is the fact that Exchange has provided investors with handsome upticks to that dividend over the years. Specifically, the company has hiked its dividend a whopping 17 times over the past 19 years.

That fact alone makes Exchange an intriguing option for investors looking to establish a monthly passive-income stream.

Final thoughts

No investment is without risk, and that includes Exchange. Fortunately, Exchange operates a well-diversified business that continues to generate cash and payout a handsome monthly passive income.

Throw in the impressive history of dividend hikes, and you have a stellar investment option for investors looking to generate monthly passive income.

In my opinion, Exchange is a great addition to any larger, well-diversified portfolio.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

Fool contributor Demetris Afxentiou 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.

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