{"id":8717,"date":"2025-07-19T18:55:06","date_gmt":"2025-07-19T18:55:06","guid":{"rendered":"https:\/\/www.newsbeep.com\/ca\/8717\/"},"modified":"2025-07-19T18:55:06","modified_gmt":"2025-07-19T18:55:06","slug":"the-4-2-monthly-payer-that-could-fund-your-retirement","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/ca\/8717\/","title":{"rendered":"The 4.2% Monthly Payer That Could Fund Your Retirement"},"content":{"rendered":"\n

Dividend payers on the TSX typically fall into one of four categories: operating companies that pay out earnings, asset-light royalty firms that collect revenue based on others\u2019 sales, real estate investment trusts that distribute rental cash flow, and a less-discussed group: holding companies.<\/p>\n

Unlike the others, holding companies own other businesses outright or in part. They\u2019re underrepresented in many portfolios, but can be powerful income engines. Here\u2019s how they work and one I like that pays monthly income.<\/p>\n

What is a holding company? <\/p>\n

An operating company, like a restaurant or factory, generates income from day-to-day operations. It incurs costs from staff, materials, rent, and maintenance and uses revenues to cover these before declaring dividends. That means operating companies face constant pressure from wage inflation, regulatory changes, commodity prices, and market competition.<\/p>\n

A holding company takes a different approach. Instead of running the business directly, it owns one or more operating companies and collects profits. Its overhead is far lighter: no factory floors, no product lines, no retail outlets. Earnings flow up from subsidiaries, and shareholders receive steady dividends.<\/p>\n

On the balance sheet, holding companies look cleaner. They have diversified assets, consistent cash flow, and often lower debt, since capital isn\u2019t tied up in operations. The model can be ideal for investors who want reliable income without the volatility of direct operational risk. The built-in diversification also helps reduce volatility.<\/p>\n

A monthly income holding company <\/p>\n

Exchange Income Corporation (TSX:EIF<\/a>) stands out as one of the few Canadian holding companies that pays a monthly dividend. It doesn\u2019t get a lot of attention, but it quietly owns a wide range of businesses \u2013 mostly in aerospace and manufacturing \u2013 that generate steady, diversified cash flow.<\/p>\n

These include regional airlines, helicopter operators, aircraft maintenance businesses, and niche industrial manufacturers. Some of its past and present holdings include Calm Air, Perimeter Aviation, Carson Air, Custom Helicopters, and WesTower Communications.<\/p>\n

What makes EIF unique is that, unlike many holding companies that focus on capital appreciation, dividend income has always been a priority. Since its inception in 2004, the company has paid a monthly dividend without interruption. <\/p>\n

Over that time, it has increased its payout 17 times, working out to a compound annual growth rate of 5%. That\u2019s faster than inflation and proof that management has been able to grow both its business and the income it returns to shareholders. <\/p>\n

By the end of 2024, EIF had paid out more than $1 billion in dividends. Today, the company pays $2.64 per share annually, distributed in monthly installments. Based on the current share price, that works out to a yield of approximately 4.2%.<\/p>\n

The Foolish takeaway <\/p>\n

Unlike operating companies that face the day-to-day swings of commodity prices or retail sales, EIF\u2019s cash flow is more insulated. Its subsidiaries manage their own operations, while the holding company focuses on capital allocation and financial oversight.<\/p>\n

This structure gives EIF flexibility. It can reinvest in its best businesses, acquire new ones when opportunities arise, and steadily grow its payout over time. For income investors looking for something outside the usual sectors and a source of monthly income that\u2019s both stable and growing, EIF is worth a look.<\/p>\n","protected":false},"excerpt":{"rendered":"Dividend payers on the TSX typically fall into one of four categories: operating companies that pay out earnings,…\n","protected":false},"author":2,"featured_media":8718,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[14],"tags":[45,49,48,133,131,132,39],"class_list":["post-8717","post","type-post","status-publish","format-standard","has-post-thumbnail","category-personal-finance","tag-business","tag-ca","tag-canada","tag-finance","tag-personal-finance","tag-personalfinance","tag-top-stories"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts\/8717","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/comments?post=8717"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts\/8717\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/media\/8718"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/media?parent=8717"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/categories?post=8717"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/tags?post=8717"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}