With interest rates expected to fall over the next 12 months, income-seeking investors should consider gaining exposure to quality dividend stocks that offer a tasty yield. Valued at a market cap of almost $3 billion, Exchange Income (TSX:EIF) is one such TSX dividend stock you could own in 2025.
Exchange Income operates in verticals such as aerospace, aviation, and manufacturing. Its aerospace division provides fixed-wing and rotary aircraft services for medevac, passenger, freight, training operations, aircraft modifications, and logistics support. The manufacturing segment produces access solutions, building exteriors, precision components, climate control equipment, and specialized steel products while offering construction services.
The mid-cap TSX stock went public in late 2004 and has returned over 600% to shareholders. However, if we adjust for dividend reinvestments, cumulative returns are closer to 3,570%.
This means a $10,000 investment in EIF stock soon after its initial public offering would be worth almost $370,000 today. As past returns do not reflect future gains, let’s see if Exchange Income is a good stock to own at the current valuation.
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Is this TSX dividend stock a good buy?
Despite its market-beating returns, Exchange Income offers shareholders a tasty dividend yield of 4.5% in May 2025. Moreover, it has a monthly payout, making it all the more attractive to income-focused investors.
A $10,000 investment in EIF stock will help you buy 172 company shares and earn $37.8 in monthly dividends, translating to an annual payout of around $450.
| COMPANY | RECENT PRICE | NUMBER OF SHARES | DIVIDEND | TOTAL PAYOUT | FREQUENCY |
| Exchange Income | $58.18 | 172 | $0.22 | $37.8 | Monthly |
In the first quarter (Q1) of 2025, Exchange Income reported revenue of $668 million with an adjusted EBITDA (earnings before interest, tax, depreciation, and amortization) of $130 million and a free cash flow of $81 million.
Despite a challenging macro environment, Exchange Income reaffirmed its 2025 midpoint EBITDA guidance of $710 million, which excluded the pending Canadian North acquisition. Moreover, the management stated that while some customers temporarily delayed purchasing decisions due to tariff concerns, the company remains largely insulated from direct tariff impacts.
EIF’s Aerospace & Aviation segment generated $382 million in revenue, up 4% year over year, with adjusted EBITDA increasing 8% to $102 million. Strong performance in Essential Air Services and Aircraft Sales & Leasing business lines, medevac operations, and engine leasing drove these gains.
The Manufacturing segment delivered even stronger results, as revenue increased by 23% to $286 million and adjusted EBITDA surged by 50% to $41 million. The Environmental Access Solutions business excelled with robust demand for Spartan’s composite mats, prompting management to indefinitely postpone equipment upgrades and consider building a second manufacturing plant.
EIC also announced an expanded credit facility, increasing availability to $3 billion from $2.2 billion. This gives the company more than $1 billion in liquidity for future acquisitions and growth investments.
Is this TSX stock undervalued?
Analysts tracking the TSX dividend stock expect adjusted earnings to expand from $2.99 per share in 2024 to $5.12 per share in 2027. EIF stock trades at a forward price-to-earnings multiple of 15.9 times today, which is quite reasonable. If it maintains a similar multiple, EIF will trade around $80 per share in early 2027, indicating an upside potential of over 30% from current levels.
Bay Street expects the company’s free cash flow to increase from $200 million in 2024 to $332 million in 2026. This widening cash flow base should help the company increase dividend payouts and target accretive acquisitions in the next two years.
