One of the most coveted elements of investing is receiving a dividend. That being said, not all stocks pay a dividend, and fewer can pay their dividends on a monthly cadence. Fortunately, there is one TSX dividend stock that pays a monthly dividend to consider right now.
That stock is Exchange Income Corporation (TSX:EIF) and here’s why you should invest in Exchange right now.
Meet Exchange Income Corporation
Most investors aren’t aware of Exchange or more specifically, how lucrative an investment Exchange is. For those unfamiliar with the stock, Exchange is an acquisition-focused company with over a dozen subsidiary companies.
Those subsidiaries are broadly classified into two segments comprising aviation and manufacturing. Both segments have two key features in common that are worth mentioning to prospective investors.
First, all of those subsidiaries generate free cash for the company. This is important because it allows Exchange to invest in growth initiatives while also paying out a juicy monthly dividend.
The second point to note is that the subsidiaries provide a necessary service across the niche markets they serve. Often, these have no or extremely limited competition, which provides an element of appeal.
This not only provides a defensive moat for the company, but can be a lucrative source of revenue
By way of example, let’s look at the aviation segment. Exchange’s subsidiaries there provide passenger, cargo, and medevac service to the remote regions of Canada’s north. Turning to the manufacturing segment, examples include custom manufacturing services for the defence market as well as cell tower fabrication services.
Why you need Exchange in your portfolio
One of the main reasons why investors flock to Exchange is for that lucrative monthly payout. As of the time of writing, Exchange offers a juicy 5.5% yield. This makes the TSX dividend stock one of the better-paying options to consider right now.
That tasty yield also means that investors with $30,000 to invest can expect to earn $125 every month from Exchange. Even better, investors who aren’t ready to draw on that income yet can choose to reinvest that dividend. This allows it to grow further over a longer period of time.
Speaking of growth, Exchange continues to provide annual generous upticks to that dividend. In fact, the company has provided increases to that monthly cash dividend for 17 of the last 19 years.
That fact alone makes Exchange a great buy-and-forget TSX dividend stock to consider for your portfolio.
Buy a TSX dividend stock that pays monthly
No stock even the most defensive is not without some risk, and that includes Exchange. Fortunately, Exchange is a well-diversified option that can provide years of opportunity for growth and income-seeking investors alike.
In my opinion, Exchange should be a core holding as part of any long-term well-diversified portfolio.
Buy this TSX dividend stock today, hold it, and watch it (and your future income) grow.
