There’s no shortage of great dividend stocks to buy right now. In fact, some of those dividend stocks can provide a monthly passive income that can last for decades.
Here’s a look at one dividend stock that can provide that monthly passive income which currently trades for less than $50
Have you heard of Exchange Income Corporation?
Exchange Income Corporation (TSX:EIF) is a stock that few investors recognize, but once they learn about the company few will forget. Winnipeg-based Exchange owns over a dozen subsidiary companies. Those subsidiaries are broadly classified into two groups aviation and manufacturing.
On the aviation side, Exchange’s subsidiaries provide a host of passenger and cargo services that serve the remote regions of Canada’s north. The segment also boasts more niche offerings such as providing medevac services and even a flight training school.
Turning to the manufacturing business, notable subsidiaries include metal fabrication services, cell tower installation, and window wall unit installation services.
Across both segments, there are two unique factors that prospective investors should note. First, the subsidiaries provide a necessary service for a very niche market.
This includes products and services where there is very little, if any, competition. That makes Exchange, and by extension the monthly passive income it offers to investors, a defensive option to consider.
The second notable point is that the subsidiaries generate free cash for the company. This in turn allows Exchange to continue to pay its juicy yield (more on that in a moment), and invest in new growth opportunities.
Let’s talk about that monthly passive income
One of the main reasons why investors continue to turn to Exchange is for the dividend that it offers. Exchange offers investors a juicy 5.66% yield paid out on a monthly cadence.
This means that investors who can drop $35,000 into Exchange (as part of a well-diversified portfolio) can expect to generate monthly dividend income of nearly $165.
Keep in mind that those investors who aren’t ready to draw on that income yet can opt to reinvest those dividends allowing any eventual income to grow further.
Speaking of growth, there’s one more unique point that prospective investors should note when it comes to Exchange’s dividend. The company has made it a point to provide generous annual upticks to that dividend.
Exchange has hiked its dividend 17 times over the past 19 years. That fact, along with the generous yield, makes Exchange a unique option to add to any well-diversified portfolio.
Final thoughts on buying Exchange right now
Investors need to remember that no stock, even the most defensive, is without some risk. Over the past year, the inflation and interest-induced market volatility we saw dragged down many stocks.
That includes Exchange, which as of the time of writing, trades down 14% over the trailing 12-month period. In short, that dip should be viewed as an opportunity to pick up a great stock at a discounted price.
To illustrate, let’s look at a longer, five-year picture of the stock, where we now see Exchange up a whopping 60%. That makes it one of the best-performing options on the market, especially for those looking for monthly passive income.
In my opinion, Exchange is a stellar option to own as part of a larger, well-diversified portfolio.
