A return below 3% may not sound exciting. But here’s what most investors miss: The best dividend stocks aren’t just about today’s payout. It is essential to invest in companies that consistently increase their dividends every year while offering potential upside through capital gains.
This combination of income and growth is the real engine of long-term compounding. Exchange Income Corporation (TSX:EIF) has been delivering just that for over two decades, making it one of the most overlooked revenue and growth stories on the TSX.
Is this TSX dividend stock a good buy?
Exchange Income is not an easy company to describe, and that’s what makes it interesting.
Headquartered in Winnipeg, Canada, it operates through two segments.
- The first is aerospace, which includes essential air services, medevac operations, charter and cargo flights, intelligence, surveillance and reconnaissance (ISR) services and aircraft leasing.
- The second is Manufacturing, which includes composite mats, multi-storey window systems, precision parts and specialty equipment for the energy and telecommunications sectors.
The key word here is ‘essential’. Most of what Exchange Income does is not optional. Remote northern communities in Canada rely on their airlines for medical evacuations and basic services. Governments rely on their ISR aircraft for maritime surveillance. Hospitals and construction workers depend on the special production products.
That essential nature is what gives the company its sustainability. CEO Mike Pyle made this clear during the company’s Q3 earnings call. “EIC is built on the concept that not everything is going to be perfect at the same time,” he said.
When aviation was hit hard by COVID-19, the window industry kept the company afloat. When the windows slowed down in 2025, aviation and manufacturing took the slack.
That resilience is rare. And it is the foundation on which the dividend is built.
A strong performance in the third quarter
Exchange Income set quarterly records for revenue, adjusted EBITDA (earnings before interest, taxes, depreciation, and amortization), free cash flow, free cash flow less maintenance capex, net income and adjusted net income, all in the same quarter.
- Sales amounted to $960 million.
- Adjusted EBITDA was $231 million.
- Free cash flow was $171 million, compared to $136 million a year earlier.
- Earnings per share rose to $1.32 from $1.18 in the prior period.
- Adjusted net earnings per share rose from $1.29 to $1.46.
The annual dividend was increased from $2.64 to $2.76 per share, an increase of 5% year over year. It was the 18th dividend increase since 2004. During that same period, Exchange Income has paid out a total of more than $1 billion in cash dividends to shareholders.
At the current price of $2.76 annually, the stock yields about 2.7%. That payout comes every month.
What’s next for EIF shareholders?
Management has projected 2026 adjusted EBITDA of $825 million to $875 million. That alone represents approximately $100 million in growth by 2025.
Here’s the crucial detail: that guidance assumes no new acquisitions occur, no new contract is won, and no significant growth capital is needed beyond what’s already happening.
In other words, the floor has already been laid. Everything else, including a possible Australian maritime surveillance contract, the expansion of Canadian government defense spending, ISR capabilities in Europe and Southeast Asia, and the expansion of a new composite matting facility, are positives that have not been priced in.
Over the past 18 years, the TSX dividend stock has returned more than 3,300% to shareholders, after adjusting for dividend reinvestments. That track record puts it in the top 10 of all TSX stocks based on shareholder returns.
A return of 2.7%, paid monthly, backed by such a growth story, is a combination worth taking seriously.
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