Of note, this e-mail today will replace our Sunday e-mail this week. So, do not expect an e-mail Sunday.
This e-mail will be short and sweet, as most of the content will be inside the report of our brand new Dividend Bull List addition.
Long-standing members will know we’ve been big fans of Exchange Income Corporation, with it being on and off of our lists prior. However, exceptional performance over the last year has led us to add it to the list again.
Let’s get into it.
We’ve added Exchange Income Corporation (TSE:EIF) to the Dividend Bull List
Exchange Income Corporation was previously added to the Bull List during the pandemic. However, we removed the company when valuations had exceeded levels we were comfortable with.
In hindsight, we were much better off “letting winners win,” as we speak about here. However, the company has executed so well over the last year that we feel valuations are now on a level we would consider attractive yet again.
Exchange Income Corp is a unique blend of income and growth for investors looking for the best of both worlds. Don’t make the mistake many do and cast this company aside because it is in the airline industry.
First, it has many other operations outside the airline sector that diversify its revenue base. Secondly, this is not a traditional airline like Air Canada. Although it does provide charter and passenger flights to the more remote regions in Canada, for the most part, it deals with things like medivac services, pilot training, surveillance, and aircraft parts. Outside the aerospace segment, its manufacturing segment contains operations like bridge and mat construction to allow customers to operate machinery in difficult-to-access or environmentally sensitive areas.
In addition to this, the company also runs multiple subsidiaries that take care of high-rise window installation and maintenance. Finally, the precision manufacturing segment deals with constructing and maintaining wireless and wireline infrastructure, stainless tanks and vessels, and much more.
The company pays a high-yielding, well-covered dividend. This company scores relatively weak inside our dividend screener because the standardized payout ratios are not the right way to evaluate this dividend. We dive deeper into that in the dividend section of our report.
The company recently made the prudent move to enter fixed-rate agreements on most (66%) of its debt. With the Bank of Canada going back on its rate pause, this move has proven to be wise. The company states that the move will reduce interest on its $540M in fixed-rate debt by up to 1.5%. This works out to be around $8.1M annually.
You can read our full report on Exchange Income Corporation here
