Valued at a market cap of $3.4 billion, Exchange Income (TSX:EIF) is a monthly dividend stock that offers you a tasty yield of 4.1%. In the last decade, the TSX stock has returned 211% to shareholders. However, after adjusting for dividend reinvestments, cumulative returns are closer to 466%.
Let’s see why Exchange Income is a top dividend stock to own right now.
Is this TSX dividend stock still a good buy?
Exchange Income delivered another exceptional quarter in the first quarter (Q1), setting records across all key financial metrics despite navigating economic and geopolitical uncertainty.
The diversified aviation and manufacturing company reported revenue of $668 million, up 11% year over year, while adjusted EBITDA (earnings before interest, tax, depreciation, and amortization) surged 17% to $130 million, both first-quarter highs in the company’s history.
CEO Mike Pyle emphasized EIC’s resilience, noting it remains “a beacon of resilience and stability” while others have downgraded or eliminated guidance entirely. Exchange Income confidently reaffirmed its fiscal 2025 adjusted EBITDA guidance of $690-730 million, excluding the pending Canadian North acquisition.
The Aerospace & Aviation segment grew revenue 4% to $382 million, driven by strong performance in Essential Air Services and Aircraft Sales & Leasing.
Notable growth drivers included continued expansion of medevac operations under BC and Manitoba contracts, improved load factors, and robust demand in the leasing business. The segment benefited from previous organic growth investments and the full deployment of Q400 aircraft for Air Canada services.
Manufacturing segment revenue jumped 23% to $286 million, with adjusted EBITDA rising 50% to $41 million. The star performer was Environmental Access Solutions, where Spartan’s composite mats experienced such strong demand that the company indefinitely delayed a planned plant shutdown and is actively evaluating the possibility of a second facility. Management noted that the secular trend toward composite mats over traditional wood mats continues to accelerate.
EIC’s financial foundation remains robust, with over $1 billion in available liquidity following the expansion of its credit facility to $3 billion. It successfully called $78 million in convertible debentures while maintaining conservative leverage ratios. Free cash flow reached $81 million, with free cash flow less maintenance capital expenditures (CapEx) hitting $26 million, both quarterly records.
Looking ahead, EIC faces temporary headwinds, including conversion delays in manufacturing due to tariff uncertainty and transitions in aerospace training contracts. However, management remains optimistic about the pipeline of opportunities, particularly with Canada’s new government focusing on northern infrastructure development and defence spending. The pending Canadian North acquisition, once approved, will provide comprehensive northern coverage and significant synergies with existing operations.
Exchange Income’s diversified business model, spanning essential services, continues to prove its worth, generating consistent cash flows and maintaining its streak of over 20 years of dividend payments while positioning itself for future growth through strategic acquisitions and organic expansion.
Is this TSX dividend stock a good buy right now?
Analysts tracking Exchange Income expect adjusted earnings to grow from $2.99 per share in 2024 to $4.95 per share in 2029. Its free cash flow is forecast to increase from $200 million to $325 million in this period.
Exchange Income pays shareholders an annual dividend of $2.68 in 2025, up from $2.64 in 2024. Given its outstanding share count, the annual dividend expense for the TSX stock is approximately $140 million, indicating a payout ratio of 58%, which is considered sustainable.
The TSX dividend stock trades at a forward earnings multiple of 18.4 times, above the three-year average of 14 times. If the dividend stock is priced at 16 times forward earnings, it will trade around $80 in early 2029, indicating an upside potential of 25% from current levels. If we adjust for dividends, cumulative returns could be closer to 30% in this period.
