The Toronto Stock Exchange (TSX) continues to push to new highs, a sharp contrast to the volatility and fear that gripped markets just a short while ago. From inflation jitters to tariff concerns, it wasn’t long ago that investors were hesitant to step back in. But now, with resilience returning to Canadian equities, some opportunities are still hard to ignore.
If I had an extra $2,800 to invest in the TSX today, here’s one stock that interests me – Exchange Income Corporation (TSX: EIF).
Source: Getty Images
Riding the volatility with a winning stock
Exchange Income Corp. is no stranger to market swings, but its long-term story is one of strength and stability. The stock began 2025 at around $58 per share, only to correct sharply to $45 in April – a drop of over 20%. Yet in true EIF fashion, it rallied all the way back to its previous highs. Investors who timed that dip perfectly pocketed nearly 30% in gains. But even without perfect timing, the stock has rewarded patient holders.
So what’s driving this recovery? It comes down to execution. Exchange Income recently reported record-breaking first-quarter (Q1) results and reaffirmed its 2025 guidance — a strong sign of momentum. Some key Q1 numbers include:
- Revenue up 11% to $668 million
- Adjusted EBITDA (a proxy for cash flow) up 17% to $130 million
- Free cash flow per share up 23%
- A healthy payout ratio of 63%, indicating the dividend remains safe
A dividend you can count on
Historically, much of stock returns come from dividends. And Exchange Income’s dividend is one you can count on. Exchange Income is a dividend machine. Since 2004, it has paid out over $1 billion in monthly dividends. It hasn’t just been consistent – it has grown that payout over time, building a loyal base of income investors. Currently, the stock yields about 4.5%, offering a solid stream of passive income that’s hard to ignore in today’s market.
Even better, analysts see more room to run. The average price target implies a 12-month upside of over 20%, while even the most conservative estimates still forecast around 13% upside. That means for long-term investors who can stomach short-term volatility, this is one of the more attractive setups on the TSX right now.
A business built for the long haul
What makes Exchange Income especially compelling is the diversification and resilience of its business model. The company focuses on two key sectors: aerospace and aviation, and manufacturing. Through its 19 subsidiaries, EIF provides essential services like medevac flights, passenger and freight transport, and even specialized manufacturing for infrastructure and engineering.
Its acquisition strategy targets niche, cash-generating businesses that operate with steady demand and strong management teams. This model has not only fueled growth but also provided a buffer during tougher market conditions.
The Foolish investor takeaway
If I were putting $2,800 to work in the TSX today, I’d be looking for a mix of resilience, income, and upside potential. Exchange Income Corporation checks all those boxes. It’s reasonably valued, pays a growing dividend, and has shown time and again that it can navigate volatility and come out stronger.
I’d start with a position today – and leave room to buy on dips if the market hands me a better price in a market correction.
