Monthly-paying TSX dividend stocks provide an opportunity to generate a stable recurring income stream. Moreover, dividend investors can align these payouts to offset real-world expenses.
Dozens of dividend stocks offer monthly payouts in 2023. However, only a handful of these companies have the potential to generate inflation-beating returns for investors. Here are two TSX cash kings with monthly dividend payouts.
Exchange Income stock
Valued at $2.30 billion by market cap, Exchange Income (TSX:EIF) pays shareholders a monthly dividend of $0.22, indicating a yield of more than 5%. Exchange Income is a diversified acquisition-oriented company focused on two segments: aerospace & aviation and manufacturing. It uses an acquisition strategy to identify profitable companies that generate steady cash flow growth while operating in niche markets.
Despite a challenging macro environment, Exchange Income increased revenue by 21% year over year to $2.5 billion in 2023. Its adjusted EBITDA (earnings before interest, tax, depreciation, and amortization) grew by 22% to $556 million, a quarterly record for the company. Its adjusted net income stood at $144 million or $3.2 per share in 2023, up from $133 million, or $03.29 per share, in the year-ago period.
Exchange Income ended 2023 with a free cash flow of $377 million, an increase of 14% year over year. After accounting for capital expenditures, its free cash flow rose over 15% to $202 million, or $4.49 per share. This suggests that Exchange Income has a payout ratio of 57%, which is quite low, offering it enough room to target accretive acquisitions and improve its financials.
In the last 10 years, EIF stock has returned 135% to shareholders. After adjusting for dividends, total returns are much higher at 343%. Despite its outsized gains, the TSX dividend stock trades 12.3% below all-time highs, allowing you to buy the dip.
Priced at 15 times forward earnings, EIF stock is really cheap, given that adjusted earnings are forecast to expand by 11.4% annually in the next five years. Analysts remain bullish and expect EIF stock to return over 30% in the next 12 months.
Savaria stock
Valued at $1.17 billion by market cap, Savaria (TSX:SIS) is among the major players in the accessibility industry, providing solutions for the physically challenged. The company’s product line is diverse, as it designs, manufactures, distributes, and installs stairlifts, wheelchair lights, and elevators for home and commercial use.
Additionally, it manufactures pressure management products for the medical market. Savaria also converts and adapts vehicles for personal and commercial use.
The small-cap manufacturer aims to end 2025 with $1 billion in sales and an adjusted EBITDA margin of 20%. It ended 2023 with revenue of $837 million, an increase of 6% year over year. Comparatively, its adjusted EBITDA stood at $130 million, indicating a margin of 15.1%.
Savaria’s total available funds stood at $223.3 million which will be deployed to support working capital organic investments and growth opportunities. Savaria pays shareholders a monthly dividend of $0.043 per share, indicating a forward yield of 3%.
Priced at 21.5 times forward earnings, SIS stock is not too expensive as it is forecast to almost double adjusted earnings from $0.57 per share in 2023 to $1.08 per share in 2025.
