The Toronto Stock Exchange (TSX) keeps reaching higher peaks, which starkly contrasts with volatility And the apprehension that recently seized financial markets has subsided. With worries about inflation and tariffs causing hesitation among investors not too long ago, many were reluctant to reengage. However, as resiliency returns to the Canadian equity market, certain prospects remain difficult to overlook.
If I could allocate an additional CAD 2,800 into the Toronto Stock Exchange right now, there's one equity that catches my attention – Exchange Income Corporation ( TSX:EIF ).
Navigating the fluctuations with a profitable share
Exchange Income Corporation is well-versed in dealing with market fluctuations; however, its enduring narrative reflects resilience and steadiness. At the beginning of 2025, the stock was trading around $58 per share before experiencing a significant downturn to $45 in April—a decline exceeding 20%. Nonetheless, adhering to its customary pattern, the company managed to recover entirely, returning to earlier peak levels. Those investors who seized this opportunity saw returns nearing 30%. Even for those not blessed with impeccable timing, holding onto their shares paid off handsomely.
What's behind this recovery? The answer lies in execution. Recently, Exchange Income announced unprecedented first-quarter (Q1) results and confirmed its 2025 projections — a clear indicator of positive momentum. Notable figures from the Q1 report consist of:
- Revenues increased by 11% to $668 million.
- Adjusted EBITDA (a measure of cash flow) increased by 17% to $130 million.
- Free cash flow per share increased by 23%
- A robust payout ratio of 63% suggests that the dividend stays secure.
A reliable dividend you can depend on
Traditionally, a significant portion of stock gains originates from dividends. At Exchange Income, this aspect is particularly reliable. The company operates as a veritable 'dividend factory.' Since 2004, they have distributed more than $1 billion through their monthly dividends. This distribution isn’t merely steady; it has progressively increased, attracting a dedicated group of income-focused shareholders. Presently, the share offers an approximate yield of 4.5%, providing a substantial source of passive revenue that stands out in current financial conditions.
Furthermore, experts believe there’s potential for further growth. According to average price targets, there could be an upward movement of more than 20% within twelve months, with even the least optimistic projections predicting at least a 13% increase. This makes it one of the more appealing opportunities on the Toronto Stock Exchange for those long-term investors willing to handle brief market fluctuations.
A company designed for enduring success
The aspect of Exchange Income that stands out particularly is the diversification and robustness of its corporate strategy. This firm concentrates on two major industries: aerospace and aviation, along with manufacturing. Leveraging its network of 19 affiliates, EIF delivers crucial services including emergency medical flights, as well as transportation of passengers and goods, alongside niche manufacturing for construction and engineering projects.
Their approach focuses on acquiring specialized companies that generate consistent cash flow, have stable demand, and possess robust leadership. This strategy has not only driven expansion but also offered protection during challenging economic times.
The Foolish investor takeaway
If I had $2,800 to invest in the TSX right now, I would seek a combination of resilience, income, and growth potential. Exchange Income Corporation fits this profile perfectly as it offers fair valuation, increasing dividends, and consistent demonstrated ability to thrive despite market turbulence and emerge even stronger.
I would initiate a position today – and keep some flexibility to purchase more on pullbacks if the market offers me a more favorable price later. market correction .
The post Where I Would Put $2,800 in the TSX Right Now appeared first on The Motley Fool Canada .
Is it wise to put $1,000 into Exchange Income Corporation at this moment?
Before purchasing shares in Exchange Income Corporation, keep these points in mind:
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More reading
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Fool contributor Kay Ng holds stakes in Exchange Income Corporation. The Motley Fool does not have any holdings in the mentioned stocks. The Motley Fool has a disclosure policy .
