While plenty of Canadian companies pay dividends, just a handful are positioned to deliver market-beating returns over time. One such TSX dividend stock that offers a monthly payout is Exchange Income (TSX:EIF).
Valued at a market cap of $4.2 billion, Exchange Income has returned 190% to shareholders in the past decade. If we adjust for dividend reinvestments, cumulative returns are closer to 415%.
Despite these outsized gains, Exchange Income stock provides you with an attractive yield of 3.5%, given an annual dividend per share of $2.66 in 2025.
Let’s see if you should own this mid-cap dividend stock right now.
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A strong performance in Q3 2025
In Q3 2025, Exchange Income Corporation reported record revenue of $960 million and adjusted EBITDA (earnings before interest, tax, depreciation, and amortization) of $231 million. These record numbers allowed management to raise the annual dividend by 5% year over year, indicating confidence in its underlying business despite a sluggish macro environment.
It was the first quarter following the acquisition of Canadian North, which cemented Exchange Income as a dominant player in the North American aviation segment. The integration is on track, and the company expects profitability to ramp throughout 2026 as maintenance capital expenditures normalize and operating efficiencies materialize.
The acquisition includes a lower-margin charter operation flying 737 aircraft on paved runways, which management is evaluating for future returns, though most contracts will expire naturally with little financial impact.
Exchange Income’s Aerospace and Aviation segment reported revenue of $680 million, an increase of 57%, while adjusted EBITDA rose 30% to $202 million.
Regional One continued its strong trajectory with improved leasing activity and robust parts demand. However, large aircraft and engine sales during the quarter came at lower margins than the traditional parts business.
Management highlighted significant opportunities emerging from the Canadian government’s focus on northern defence spending and infrastructure development, positioning Exchange Income uniquely to provide ISR (Intelligence, Surveillance, and Reconnaissance) services and support nation-building initiatives across the Arctic.
The manufacturing segment faced headwinds primarily from the struggling Multi-Storey Window Solutions business, which continues to be affected by aluminum tariffs, project deferrals, and excess capacity.
However, management remains bullish on long-term fundamentals driven by acute affordable housing shortages across North America. Notably, Spartan’s composite matting business, which has sold out production capacity through 2026, has attracted a $60 million investment in a second state-of-the-art manufacturing facility expected to come online within 18 to 24 months.
What is the stock price target for EIF?
The company ended the quarter with historically low leverage of 2.9 times and approximately $1.2 billion in available capital for deployment. For 2025, Exchange Income forecasts adjusted EBITDA of $850 million at the midpoint, based on existing operations, which should enhance its liquidity position.
Analysts tracking the TSX dividend stock forecast revenue to increase from $2.7 billion in 2024 to $5.3 billion in 2029. In this period, adjusted earnings are forecast to expand from $2.99 per share to $7.13 per share.
Today, EIF stock trades at a forward price to earnings multiple of 21.2 times, which is higher than its five-year average of 15 times. If the TSX stock is priced at 20 times earnings, it should trade around $142 in late 2028, indicating an upside potential of almost 100% from current levels. If we adjust for dividends, cumulative returns should be closer to 112%.
EIF has raised its annual dividend from $2 per share in 2016 to $2.64 per share in 2024 and is forecast to increase it to $3 per share in 2029, enhancing the yield at cost by 50% over 13 years.
