The holding period of long-term stock investors ranges from 10 to 20 years. You can build wealth and achieve financial goals during the period, provided you own high-quality dividend stocks. Today, you can form a formidable passive-income portfolio with Emera (TSX: EMA) and Exchange Income Corporation (TSX: EIF).
Both companies boast resilient, enduring businesses that can withstand economic cycles. Emera’s growing rate base supports dividend increases, while Exchange Income’s diversified business model sustains the monthly cash payments. Consider taking positions before 2025 and holding them for a decade or more.
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Dedicated to shareholders
Emera started paying dividends in October 1992 and raised them yearly for the next 32 years. Management said the dividend-growth streak reflects the strategic focus on sustainable financial performance and long-term stability and shows its dedication to shareholders.
At $53.79 per share (+13.4% year to date), the dividend yield is 5.41%. The good news to investors is that the $20 billion five-year capital plan over five years will grow Emera’s rate base by 7% to 9% annually through 2029. It also means a 5% to 7% average annual adjusted earnings per share (EPS) growth through 2027.
In the third quarter (Q3) of 2024, adjusted EPS increased 8% year over year to $0.81. Also, adjusted net income rose 16% to $236 million during the quarter compared to Q3 2023. Emera remains on track to fully deploy its $2.9 billion capital plan in 2024, with two-thirds of new rate base investments committed to date.
The $15.76 billion energy and services company invest primarily in regulated electricity generation and transmission and caters to customers in Canada, the U.S., and the Caribbean. Emera’s new capital focuses on grid reliability & infrastructure modernization, technological innovations, and renewables integration.
Emera’s $1 billion investment in automation technology is for advanced distribution infrastructure. The benefits are better, faster service, grid stability, reduced line losses, improved wire-down detection, and predictive maintenance. Management believes the company is competitively positioned to pursue new growth opportunities and meet the evolving demands in the electric and gas utility sectors.
Exciting future
Exchange Income Corporation displays resiliency amid a challenging environment. The $2.8 billion diversified, acquisition-oriented dividend company operates in the airline industry with 19 operating subsidiaries. Its primary focus is to pursue opportunities in aerospace & aviation and manufacturing.
Performance-wise, the industrial stock is up +36.69% year to date. At $58.68 per share, current investors partake in the 4.68% dividend yield and receive monthly cash payouts. The diversified business model is a competitive advantage and a primary driver of revenue and profitability.
In Q3 2024, revenue rose 3% year over year to $710 million, a new record. Free cash flow (FCF) increased 16% to $136.1 million from a year ago. Notably, net income climbed 16% to $55.9 million versus Q3 2023. Its chief executive officer, Mike Pyle, said the quarterly FCF was EIC’s highest and net earnings were the second highest in the company’s history. “We are excited about the future of each of our businesses,” he added.
Rock-solid pair
Income-focused investors would be fortunate to own Emera and Exchange Income. These rock-solid dividend payers will deliver quarterly and monthly income streams for decades.
