Investing $22,000 in the right TSX stocks can generate a steady stream of passive income while providing opportunities for capital appreciation. While many investors focus on large-cap stocks, mid-cap companies often strike a balance between growth and stability. Exchange Income (TSX:EIF) and Gibson Energy (TSX:GEI) are two mid-cap stocks that offer attractive dividend yields and strong fundamentals, making them excellent choices for income-seeking investors.
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EIF
Exchange Income is a diversified acquisition-focused company with operations in aviation, aerospace, and manufacturing. Over the years, it has built a strong reputation for acquiring and managing businesses that provide essential services, allowing it to generate consistent revenue. Its most recent earnings report showed quarterly revenue growth of 3.2% year over year, bringing its total trailing 12 months revenue to $2.63 billion. Net income reached $122.09 million, an impressive 12.8% increase from the previous year. The TSX stock maintains a solid operating margin of 15.83%, and its return on equity stands at 9.68%, reflecting efficient management.
One of the key reasons investors are drawn to Exchange Income is its commitment to dividend payments. It currently offers an annual dividend of $2.64 per share, translating to a forward yield of 4.93%. The company has a history of dividend growth, further reinforcing its appeal to long-term investors looking for steady cash flow.
| COMPANY | RECENT PRICE | NUMBER OF SHARES | DIVIDEND | TOTAL PAYOUT | FREQUENCY | TOTAL INVESTMENT |
| EIF | $53.14 | 207 | $2.64 | $546.48 | monthly | $11,000 |
Gibson
Gibson Energy is another strong mid-cap stock known for its reliable dividend payments. Operating in the midstream oil and gas sector, Gibson focuses on the storage, transportation, and processing of liquids and refined products. Unlike companies involved in oil exploration and production, Gibson Energy benefits from long-term contracts that provide stable cash flows, making it an attractive option for income investors.
Despite a 10.1% decline in revenue year over year, Gibson Energy demonstrated resilience in its most recent earnings report, posting a net income of $211.04 million, an impressive 161% increase. This growth reflects the TSX stock’s operational efficiency and ability to navigate fluctuations in the energy market. The company currently offers an annual dividend of $1.64 per share, with a forward yield of 6.82%. This high yield makes it one of the most attractive dividend stocks in the midstream sector.
| COMPANY | RECENT PRICE | NUMBER OF SHARES | DIVIDEND | TOTAL PAYOUT | FREQUENCY | TOTAL INVESTMENT |
| GEI | $24.21 | 454 | $1.64 | $744.56 | monthly | $11,000 |
Bottom line
Both Exchange Income Corporation and Gibson Energy have shown strong stock performance over time. Combined, the total passive income from these two investments would amount to approximately $1,279 annually or about $106 per month. This level of income provides a meaningful contribution toward covering regular expenses or reinvesting for further growth. Both companies have forward price-to-earnings ratios in the mid-teens, suggesting they are reasonably valued based on future earnings expectations.
While these investments offer compelling passive income opportunities, it is important to consider potential risks. Exchange Income carries a relatively high debt-to-equity ratio of 174.11%, reflecting its reliance on debt for growth. Gibson Energy’s payout ratio of 126.56% indicates that its dividend payments currently exceed its net earnings. This means that the company depends on cash flow from operations rather than just profits to sustain dividends. Despite these concerns, both TSX stocks have demonstrated a commitment to maintaining and growing dividends.
