Tax-Free Savings Account (TFSA) investors have rock-solid income-producing prospects, notwithstanding the TSX’s erratic performance in 2024. Exchange Income Corp. (TSX: EIF), Choice Properties (TSX: CHP.UN), and B2Gold (TSX: BTO) belong to different sectors but have identical 5.8% dividend yields.
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Industrial
Exchange Income Corporation, or EIC, is a screaming buy following the record revenue and free cash flow (FCF) in the first quarter (Q1) of 2024. In the three months ending March 31, 2024, revenue increased 14% year over year to $602 million, while FCF reached $62 million. On May 6, 2024, EIC celebrated its 20th year as a publicly listed company.
This $2.14 billion acquisition-oriented company operates in the Aerospace & Aviation and Manufacturing industries. “Our businesses excelled over the past 20 years, and our diversity continues to weather the current environment of geopolitical and economic uncertainty,” said Mike Pyle, chief executive officer (CEO) of EIC.
Management introduced the theme “Built to Last” in 2023, and EIC recorded several contractual wins throughout the year. Looking for acquisition targets and assessing a number of high-quality opportunities are ongoing concerns. If you invest today ($45.31 per share), you can partake in the generous monthly dividend payouts.
Real estate
Property buyers were sidelined, and real estate market activity was subdued while the Bank of Canada battled persistent inflation. However, a real estate investment trust (REIT) with predominantly retail properties in its portfolio thrived despite massive headwinds.
Choice Properties is the pre-eminent investment choice if you want exposure to the real estate sector. With its $9.4 billion market capitalization, this REIT is Canada’s largest real estate operator. The retail portfolio, mostly necessity-based and grocery-anchored, contributes 79% of net operating income (NOI), followed by industrial (17%) and mixed-use & residential (4%) properties.
The strategic relationship and long-term leases with Loblaw are competitive advantages and cash flow drivers. As expected, Choice Properties reported impressive financial and operational results last year because of its winning retail footprint and strong tenant retention.
Rental revenue, net income, and NOI in 2023 increased 3.5%, 7%, and 4% year over year to $1.3 billion, $796.7 million, and $979.5 million. In Q1 2024, NOI rose 3.11% to $251.6 million versus Q1 2023, while net income dropped 47.5% year over year to $142.3 million due to non-cash fair value adjustments.
According to its president and CEO, Rael Diamond, robust tenant demand for necessity-based properties and significant rental rate lifts on lease renewals occurred during the quarter. CHP.UN trades at $12.97 per share and pays monthly dividends.
Mining
B2Gold is a cheap option for income investors. At only $3.76 per share, you can partake in the highest dividend yield in the gold sector. This $4.88 billion low-cost international senior gold producer operates gold mines in Mali, Namibia, and the Philippines. Another one, the Goose Project, is under construction in northern Canada.
Management’s near-term strategy is to maximize profitable gold production from existing mines and increase mineral reserves and resources. The focus on organic growth should result in a strong cash position and enable significant quarterly dividend payments.
On July 2, 2024, B2Gold announced a strategic investment in Prospector Metals. The latter focuses on district-scale, early-stage exploration of gold and base metal prospects in Ontario, Canada. B2Gold’s 9.99% ownership stake should boost its portfolio.
Ideal holdings
Exchange Income, Choice Properties, and B2Gold are ideal holdings in a TFSA. They are outstanding and reliable dividend payers in their respective sectors.
