Is your portfolio diversified with growth and income-producing stocks? Having a good mix of investments that includes both growth and dividend stocks can make a huge difference over the longer term. Even better is when investors opt to include a dividend stock that pays cash every month.
A prime example of that is Exchange Income Corporation (TSX:EIF), and here’s why this stock, which pays cash every month, should be part of your long-term portfolio.
Meet Exchange
For those unaware of the stock, Exchange is an acquisition-focused company that operates over a dozen subsidiary companies. Those subsidiaries broadly fall under aviation and manufacturing categories.
Somewhat surprisingly, Exchange’s subsidiaries have two unique points in common. First, they all generate cash for the company. This allows Exchange to provide investors with a juicy dividend that pays cash every month (more on that dividend in a moment).
The second key point has to do with the uniqueness of those subsidiaries. In short, they all cater to a specific need, for which there is limited competition, yet stable (if not growing) demand.
By way of example, let’s look at the aviation side of the business. Exchange’s subsidiaries in this segment include providing passenger and freight services to Canada’s remote north regions. That segment also includes flight schools serving the Canadian and U.S. markets.
Turning to the manufacturing segment, Exchange’s unique subsidiaries include a variety of custom manufacturing solutions for different purposes and terrains. The subsidiaries serve a variety of market segments, from agriculture and housing to industrial and military applications.
In short, across both segments, Exchange serves a niche market that allows it to generate cash and invest in growth.
Turning to stock price, Exchange currently trades down just over 5% over the trailing 12-month period. This makes it an ideal time for investors to pick up this long-term stock that pays cash every month.
Let’s talk more about that income
One of the main reasons why investors continue to flock to Exchange is for the company’s lucrative monthly dividend. As of the time of writing, Exchange pays out a handsome 5.6% yield.
This means that investors who drop $40,000 into Exchange can expect a monthly income of just under $19. Even better, prospective investors who aren’t ready to draw on that income yet can reinvest those dividends for further growth.
Speaking of further growth, Exchange is well-known for providing a generous bump to that dividend. In fact, the company has provided 17 increases to that dividend over the past 19 years.
That fact alone makes this stock which pays cash every month a great long-term option to consider buying right now.
Exchange pays cash every month. Will you buy it?
Exchange offers a very juicy dividend that pays cash every month. The company is also a well-diversified option that boasts multiple reliable revenue streams.
This factor alone makes Exchange, in my opinion, a great addition to any well-diversified portfolio.
Buy it, hold it, and watch your investment (and future income) grow.
