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1. Company Snapshot

1.a. Company Description

Exchange Income Corporation engages in aerospace and aviation services and equipment, and manufacturing businesses worldwide.It operates in two segments, Aerospace & Aviation, and Manufacturing.The Aerospace & Aviation segment offers scheduled airline, cargo, charter, and emergency medical services to communities located in Manitoba, Ontario, Nunavut, British Columbia, and Alberta, as well as Newfoundland and Labrador, Québec, New Brunswick, and Nova Scotia.


It also provides after-market aircraft, engines, and component parts to regional airline operators; designs, modifies, maintains, and operates custom sensor-equipped aircraft; and offers maritime surveillance and support services in Canada, the Caribbean, and the Middle East.In addition, this segment provides pilot flight training services.The Manufacturing segment manufactures window wall systems primarily used in high-rise multi-family residential projects; stainless steel tanks, vessels, and processing equipment; heavy-duty pressure washing and steam systems, commercial water recycling systems, and custom tanks for the transportation of various products, primarily oil, gasoline, and water products; precision parts and components primarily used in the aerospace, defense, healthcare, and security sectors; electrical and control systems integrator focused on the agricultural material handling; and precision sheet metal and tubular products.


This segment also focuses on the engineering, design, manufacture, and construction of communication infrastructure, as well as wireless and wireline construction and maintenance services; and provision of technical services.Exchange Income Corporation is headquartered in Winnipeg, Canada.

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1.b. Last Insights on EIF

Exchange Income Corporation's recent performance was negatively driven by a 7.0% earnings per share (EPS) miss in its full-year 2024 results, prompting analysts to revise their forecasts. The company reported record revenue of CA$2.66b, a 6.5% increase from FY 2023, but this was not enough to offset the EPS miss. Additionally, the company's Canadian North acquisition, which was highlighted as a strategic benefit, did not seem to have a significant positive impact on the earnings. National Bank of Canada recently increased the company's target to $73.0, citing an outperform rating.

1.c. Company Highlights

2. Exchange Income Corporation's Strong Q3 2025 Earnings: A Closer Look

Exchange Income Corporation (EIC) reported a strong third quarter in 2025, with revenue reaching $960 million, adjusted EBITDA of $231 million, and net earnings of $69 million, all of which were quarterly highs. The adjusted net earnings per share increased to $1.46, beating estimates of $1. Analysts estimate next year's revenue growth at 12.4%. The company's financial performance was driven by its Aerospace and Aviation segment, which saw significant demand signals, particularly in the Northern Aviation space.

Publication Date: Nov -20

📋 Highlights
  • Record Quarterly Performance:: Set all-time highs for revenue ($960M), adjusted EBITDA ($231M), net earnings ($69M), and free cash flow ($171M) in Q3 2025.
  • Acquisition of Canadian North:: Strengthened northern aviation expertise; 25% of its revenue comes from low-margin charter operations, which may be re-evaluated for profitability.
  • 2026 Guidance:: Anticipates adjusted EBITDA of $825–$875M, driven by Aviation segment growth ($100M EBITDA increase) and no incremental M&A or growth CapEx.
  • Dividend Increase:: Raised annual dividend to $2.76/share (+5%), supported by 3.30 free cash flow per share and 1.46 adjusted net earnings per share.
  • Balance Sheet Strength:: Leverage at 2.89x (historic low) with $1.2B liquidity, enabling strategic investments in 737 market expansion, matting super cycle, and ISR services.

Segmental Performance

The Aerospace and Aviation segment had a very strong quarter, driven by load factors returning partway through the third quarter and the underlying business performing well. The acquisition of Canadian North was a significant driver, with the Canadian North operations meeting internal expectations for the third quarter. The company's Aerospace business continues to see significant demand signals, driven by megatrends in Canada, including NATO defense spending targets and Northern sovereignty.

Guidance and Outlook

EIC's 2026 guidance anticipates adjusted EBITDA between $825 million and $875 million, based on its current portfolio of companies and without any new acquisitions or significant contracts. The company has a track record of executing on its strategic initiatives and is confident in the future. The guidance is driven mostly by the Aviation segment, with a significant EBITDA growth of $100 million expected.

Valuation Metrics

To understand what's priced in, we can look at EIC's valuation metrics. The company's P/E Ratio is 30.54, P/B Ratio is 2.77, and EV/EBITDA is 9.46. The Dividend Yield is 3.49%, indicating a relatively stable return for investors. The Net Debt / EBITDA ratio is 3.42, indicating a manageable level of debt. With an ROE of 9.39% and ROIC of 5.79%, EIC demonstrates a reasonable return on equity and invested capital.

Growth Prospects

As Michael Pyle noted, "We're excited about the transformation of our balance sheet and are well-positioned to execute on opportunities." The company's growth prospects are driven by its strong track record of executing on strategic initiatives, a robust pipeline of opportunities, and a favorable government overlay. EIC is well-positioned to benefit from the government's initiatives, particularly in the Northern Canada opportunity, which aligns with the company's goals.

Dividend Increase

The company has increased its dividend from $2.64 per annum to $2.76 per annum, a 5% increase, consistent with its stated commitment to provide stable and growing dividend, driven by increases in profitability and free cash flow.

3. NewsRoom

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Exchange Income Corporation Announces the Completion of Its Redemption of Its 7 Year 5.25% Convertible Unsecured Subordinated Debentures Due January 15, 2029

Dec -02

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3 TSX Stocks Estimated To Be Trading At Discounts Of Up To 48.9%

Nov -25

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Exchange Income (TSE:EIF) Has Announced That It Will Be Increasing Its Dividend To CA$0.23

Nov -20

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Exchange Income Corporation Announces November 2025 Dividend

Nov -17

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Impressive Earnings May Not Tell The Whole Story For Exchange Income (TSE:EIF)

Nov -15

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TSX Value Stocks Including Aya Gold & Silver That May Be Trading Below Estimated Worth

Nov -11

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Exchange Income Corporation Posts All Time Record Results in the Third Quarter Driven by the Diversification of its Business Model and Announces a Dividend Increase

Nov -06

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TSX Value Picks That May Be Trading Below Their Worth In November 2025

Nov -06

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4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (6.20%)

6. Segments

Aerospace and Aviation

Expected Growth: 7%

Strong demand for regional air travel, increasing aircraft utilization, and growing need for maintenance, repair, and overhaul (MRO) services drive growth in Aerospace and Aviation segment. Additionally, investments in fleet modernization, expansion of route networks, and rising demand for air cargo transportation contribute to the 7% growth rate.

Manufacturing

Expected Growth: 5%

Exchange Income Corporation's 5% growth in manufacturing is driven by increasing demand for aviation and aerospace products, strategic acquisitions, and investments in operational efficiency. Additionally, the company's diversified customer base, strong supply chain management, and focus on innovation and R&D also contribute to its growth momentum.

7. Detailed Products

Nassau Aircraft Leasing

Provides aircraft leasing services to airlines and other aviation companies

Regional One

Offers regional airline services, including passenger and cargo transportation

WestJet Encore

Operates as a regional airline, providing passenger services to smaller communities

Calm Air

Provides scheduled and charter air services to remote communities in Northern Canada

Custom Helicopters

Offers helicopter services for charter, medical evacuation, and search and rescue operations

Imperial Parking Canada

Operates parking facilities in urban centers, providing convenient parking solutions

8. Exchange Income Corporation's Porter Forces

Forces Ranking

Threat Of Substitutes

The threat of substitutes for Exchange Income Corporation is moderate, as there are alternative financial services and products available to customers.

Bargaining Power Of Customers

The bargaining power of customers is low, as Exchange Income Corporation has a diversified customer base and provides specialized financial services.

Bargaining Power Of Suppliers

The bargaining power of suppliers is moderate, as Exchange Income Corporation relies on a few key suppliers for its operations.

Threat Of New Entrants

The threat of new entrants is high, as the financial services industry is highly competitive and new entrants can easily enter the market.

Intensity Of Rivalry

The intensity of rivalry is high, as Exchange Income Corporation operates in a highly competitive industry with many established players.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 61.70%
Debt Cost 7.96%
Equity Weight 38.30%
Equity Cost 14.26%
WACC 10.37%
Leverage 161.11%

11. Quality Control: Exchange Income Corporation passed 1 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Stock-Card
EIC

A-Score: 6.6/10

Value: 5.6

Growth: 5.9

Quality: 3.7

Yield: 6.0

Momentum: 8.5

Volatility: 10.0

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Stock-Card
Air Transport Services Group

A-Score: 5.1/10

Value: 6.7

Growth: 4.9

Quality: 4.8

Yield: 0.0

Momentum: 9.0

Volatility: 5.0

1-Year Total Return ->

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Stock-Card
Sun Country Airlines

A-Score: 4.8/10

Value: 7.2

Growth: 6.7

Quality: 5.7

Yield: 0.0

Momentum: 6.5

Volatility: 3.0

1-Year Total Return ->

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Stock-Card
Chorus Aviation

A-Score: 4.7/10

Value: 7.8

Growth: 2.2

Quality: 4.7

Yield: 0.0

Momentum: 6.0

Volatility: 7.7

1-Year Total Return ->

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Stock-Card
Spirit Airlines

A-Score: 3.7/10

Value: 9.8

Growth: 1.6

Quality: 2.9

Yield: 3.0

Momentum: 1.5

Volatility: 3.7

1-Year Total Return ->

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Stock-Card
Allegiant Travel

A-Score: 3.2/10

Value: 6.1

Growth: 3.0

Quality: 1.7

Yield: 0.0

Momentum: 5.5

Volatility: 2.7

1-Year Total Return ->

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

80.27$

Current Price

80.27$

Potential

-0.00%

Expected Cash-Flows