The market is full of great dividend stocks that can provide investors with a handsome long-term income. A smaller subset of these can provide cash every single month to investors.
Here’s a look at one dividend stock that pays cash every single month to consider adding to your portfolio today.
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Meet Exchange Income Corporation
Few investors may be aware of Exchange Income Corporation (TSX:EIF) and the insane opportunity it holds for investors.
For those unfamiliar with the stock, Exchange is an acquisition-focused company. Exchange owns over a dozen subsidiary companies that are broadly classed into two segments.
Those segments are aviation and manufacturing, and this is where things get intriguing for investors considering this monthly dividend stock.
Despite the broad differences between those segments, Exchange’s subsidiaries all have two shared attributes.
First, they all operate in markets where there is little, if any, competition. Further to this, they offer increasingly necessary services within those niche markets.
By way of example, on the aviation side of the business, those subsidiaries include medevac services as well as passenger and freight services to Canada’s remote north regions.
Turning to the manufacturing segment, examples include cell tower custom manufacturing services as well as fabrication services that serve the defence industry.
The second point to note is that all those subsidiaries generate cash for the company. This makes them contributors and partners to Exchange’s overall growth. This makes Exchange a worthy dividend stock for any investor to consider.
That free cash flow also means that Exchange has more than enough to invest in further growth initiatives while paying out that juicy dividend (more on that in a moment).
Let’s talk results
Exchange is next set to post results for the fourth quarter on February 27. Until then, we can look back at how the company fared in the third quarter.
In that quarter, Exchange posted record revenue of $710 million and a record free cash flow of $136 million.
In total, the company posted earnings of $56 million for the quarter, which makes this a solid option for any investor to consider right now.
Why Exchange is a great dividend stock
One of the main reasons why investors flock to Exchange is for its juicy dividend. As of the time of writing, this dividend stock gem boasts an impressive yield of 5.06%, handily making it one of the better-paying options on the market.
It also means that investors with $35,000 to drop into Exchange (always as part of a larger, well-diversified portfolio) can expect a monthly income of just shy of $150.
That’s not even the best part.
Prospective investors should note that Exchange has provided and is committed to increasing that dividend. The company has so far provided investors with annual bumps in the past 19 years.
Keep in mind that investors who aren’t ready to draw on that income can just choose to reinvest that growing dividend. This will allow it to continue growing, boosting any eventual income stream further.
In other words, this stellar dividend stock is also a great buy-and-forget candidate to consider.
Final thoughts
No stock, even the most defensive, is without some risk. Fortunately, when it comes to Exchange, the company boasts a well-diversified selection of subsidiaries, many of which have their own defensive moat.
Throw in a juicy growing dividend, and you have a superb dividend stock that is just too hard to ignore.
In my opinion, a small position in Exchange is warranted as part of any well-diversified portfolio.
Buy it, hold it, and watch it (and your income) grow.
