When it comes to building wealth in a Tax-Free Savings Account (TFSA), it’s not just about growth. It’s also about consistency: getting reliable returns, especially if you’re aiming for passive income. That’s why Exchange Income (TSX: EIF) stands out. It’s one of the few Canadian companies that pays a strong monthly dividend, currently yielding around 4.6%. If I were starting fresh with my TFSA, I’d seriously consider putting the whole thing into this one dividend stock.
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Why it works
These days, Canadians are watching their finances more closely than ever. A recent June 2025 survey from TD Bank found that 73% of mortgage renewers plan to cut back on spending to handle higher payments. Even prospective buyers are trimming costs, with 55% cutting non-essentials and 31% planning to draw from investments like TFSAs. In a climate like this, a dividend stock that pays out every month becomes even more appealing. You get the benefit of cash flow without selling your shares or touching your principal.
Exchange Income is a bit of a quiet gem. It operates across two main areas: aviation services and manufacturing. On the aviation side, it owns regional airlines that serve remote parts of Canada, including First Nations communities. It also offers medevac services and aircraft leasing. On the manufacturing side, it provides niche industrial products ranging from stainless-steel tanks to telecommunications equipment. These aren’t flashy businesses, but they generate reliable, contracted revenue, and that’s key when you’re counting on income.
The numbers
Let’s look at the most recent earnings. In the first quarter (Q1) of 2025, EIF reported revenue of $668.3 million, up from $602.1 million the year before. Net income came in at $121 million, or $2.56 per share, compared to $18.5 million and $0.45 per share last year. The dividend stock continues to make strategic acquisitions, like the purchase of Northern Mat & Bridge, which added to its infrastructure portfolio. Cash flows from operations were solid, more than covering the dividend.
Speaking of dividends, EIF pays $0.22 per share monthly. That adds up to $2.64 annually, which works out to a yield of around 4.6% at recent prices. If you had $7,000 in your TFSA and invested it all into EIF, you’d earn about $319.44 for the year, or $26.62 each month. That’s more than a high-interest savings account right now. The monthly payout schedule makes it easier to match your income with expenses or re-invest it right away.
| COMPANY | RECENT PRICE | NUMBER OF SHARES | DIVIDEND (annual) | TOTAL PAYOUT | FREQUENCY | TOTAL INVESTMENT |
|---|---|---|---|---|---|---|
| EIF.TO | $57.75 | 121 | $2.64 | $319.44 | Monthly | $6,989.75 |
The dividend has also grown over time. EIF has increased its payout more than a dozen times since its inception, showing a strong commitment to shareholders. While it doesn’t raise it every year, the trend has been upward. That said, the payout ratio does hover in the 80% to 90% range, which is high. However, the dividend stock managed this level for years without cutting. Its steady cash flow, especially from long-term contracts and government-backed services, provides some cushion.
Foolish takeaway
Of course, no stock is risk-free. EIF is exposed to fuel prices, regulatory changes, and economic cycles. If travel demand dips or industrial activity slows, it could face earnings pressure. But its diversification across aviation, manufacturing, and essential services helps balance that risk. Plus, its presence in underserved northern communities gives it a stable base of demand that isn’t as tied to economic booms and busts.
For income-focused investors, especially those using a TFSA, EIF is the kind of stock that checks a lot of boxes. It offers a strong yield, reliable monthly payouts, and a history of steady performance. It also gives you exposure to a variety of sectors, all wrapped into one ticker. You’re not just betting on one industry, and that makes it easier to hold through volatility.
