A yield beneath 3% may not sound thrilling. However right here’s what most buyers miss: the perfect dividend shares aren’t nearly as we speak’s payout. It’s important to spend money on corporations that elevate their dividends constantly every year whereas additionally providing potential upside through capital positive factors.
This mixture of revenue and development is the actual engine of long-term compounding. Trade Earnings Company (TSX:EIF) has delivered precisely that for over twenty years, making it one of the missed revenue and development tales on the TSX.
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Is that this TSX dividend inventory an excellent purchase?
Trade Earnings is just not a easy firm to explain, and that’s a part of what makes it fascinating.
Headquartered in Winnipeg, Canada, it operates by two segments.
- The primary is Aerospace and Aviation, which incorporates important air companies, medevac operations, constitution and freight flights, intelligence, surveillance, and reconnaissance (ISR) companies, and plane leasing.
- The second is Manufacturing, which covers composite matting, multi-storey window techniques, precision components, and specialty gear for the power and telecommunications sectors.
The key phrase right here is “important.” Most of what Trade Earnings does is just not non-compulsory. Distant northern communities in Canada rely on their airways for medical evacuations and fundamental provides. Governments depend on their ISR plane for maritime surveillance. Hospitals and building crews rely on its specialty manufacturing merchandise.
That important nature is what provides the enterprise its sturdiness. CEO Mike Pyle made the purpose plainly on the corporate’s Q3 earnings name. “EIC was constructed on the idea that not every little thing goes to be excellent on the identical time,” he mentioned.
When aviation was hit laborious by COVID-19, the window enterprise saved the corporate afloat. When home windows slowed in 2025, aviation and manufacturing picked up the slack.
That resilience is uncommon. And it’s the muse on which the dividend has been constructed.
A robust efficiency in Q3
Trade Earnings set all-time quarterly information for income, adjusted EBITDA (earnings earlier than curiosity, tax, depreciation, and amortization), free money movement, free money movement much less upkeep capital expenditures, web earnings, and adjusted web earnings: all in the identical quarter.
- Income got here in at $960 million.
- Adjusted EBITDA hit $231 million.
- Free money movement reached $171 million, up from $136 million a 12 months earlier.
- Earnings per share rose to $1.32 from $1.18 within the prior interval.
- Adjusted web earnings per share climbed to $1.46 from $1.29.
The annual dividend was raised from $2.64 to $2.76 per share, up 5% 12 months over 12 months. It was the 18th dividend enhance since 2004. Over that very same interval, Trade Earnings has distributed greater than $1 billion in whole money dividends to shareholders.
On the present annualized charge of $2.76, the inventory yields roughly 2.7%. That payout comes each single month.
What’s subsequent for EIF shareholders?
Administration guided for 2026 adjusted EBITDA of $825 million to $875 million. That alone represents roughly $100 million of development over 2025.
Right here’s the essential element: that steerage assumes no new acquisitions, no new contract wins, and no important development capital past what’s already underway.
In different phrases, the ground is already set. Every thing else, which features a potential Australian maritime surveillance contract, expanded Canadian authorities defence spending, ISR alternatives in Europe and Southeast Asia, and the ramp-up of a brand new composite mat facility, is upside that isn’t priced in.
Over the previous 18 years, the TSX dividend inventory has returned greater than 3,300% to shareholders after adjusting for dividend reinvestments. That observe file places it within the prime 10 of all TSX shares by shareholder returns.
A 2.7% yield, paid month-to-month, backed by that type of development story, is a mixture price taking critically.