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Exchange Income Corporation (EIFZF)

Other OTC - Other OTC Delayed Price. Currency in USD
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33.37+0.15 (+0.46%)
At close: 01:47PM EDT
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  • z
  • j
    Globe and Mail - May 17, 2022 - Tuesday’s analyst upgrades and downgrades
    Good story on RBC upgrade of EIF
    ----------------------- start -------------------
    RBC Dominion Securities analyst James McGarragle sees Exchange Income Corp. ( EIF-T +4.48%increase
    ) “proven resiliency and upside from investment” creating a “compelling” investment opportunity.

    Following a recent site tour in Winnipeg and meetings with senior management, he reiterated the firm’s “positive view” on the company’s shares upon assuming coverage with an “outperform” recommendation, calling it a “rare opportunity to own both a value and a growth story.”

    Mr. McGarragle thinks Exchange Income’s “demonstrated resilience” in Aviation remains underappreciated by investors following “an exceptionally challenging pandemic.”

    “EBITDA held in better when compared to airline peers,” he said. “EBITDA at EIF was down 28 per cent in Q2/20, vs. down 190 per cent at [Air Canada] for example. We point to the Aviation segment’s revenue mix with medevac, freight, maritime surveillance, as all providing meaningful diversification - a key driver of EIF’s resiliency in our view. EIF also recovered to 2019 EBITDA levels by 2021 (AC still down 140 per cent). We believe this resilience and recovery demonstrated over the past two years will translate into higher valuation due to the inherently reduced risk profile.”

    He also emphasized its “significant” investment during the pandemic “sets the stage for growth.”

    “While the airline industry as a whole was meaningfully affected by COVID-19, EIF capitalized and invested heavily in its Aviation segment via M&A and aircraft purchases,” he said. “Our view is the uncertainty associated with the pandemic created attractive buying opportunities. Moreover, EIF completed last week its largest ever acquisition, of Northern Mat, which is a leader in temporary access solutions. Overall, we view recent investments as providing an important platform for growth.”

    With that view, Mr. McGarragle increased the firm’s estimates for Exchange Income “substantially,” projecting EBITDA for 2022 of $424-million (from $380-million). His 2023 forecast jumped to $527-million from $433-million, above the $512-million consensus on the Street and bear the top of the company’s guidance of $500-million to $530-million.

    Accordingly, his target for Exchange Income shares increased to $62 from $52, exceeding the $58.50 average.

    “Shares of EIF sold-off significantly during the pandemic, and while the shares have largely recovered (now only down 7 per cent from Nov 2019), the valuation in our view underestimates the resiliency of the company’s Aviation revenue (proven out by the pandemic) and the new investments made in capex and M&A during the pandemic,” he said. “Key is that despite this resiliency, EIF shares trade at a 9-per-cent FCF yield (CFO – maintenance capex) and 5-per-cent dividend yield, which we believe presents an attractive opportunity for investors looking for value and yield. In addition, the shares provide a meaningful opportunity for investors looking for growth – we are modelling for mid-20-per-cent EBITDA growth in 2022 and 2023 on the back of reopening, recent organic investments and the acquisition of Northern Mat.”
  • d
    great results....divy to .20
  • z
    What’s going on today ! Again manipulation !
  • S
    Really strong quarterly! Love the divi raise!
  • J
    I've watched this company from afar for quite sometime but have never bought because in my mind there was always another better opportunity. Today I see this as a good entry point with a stable and growing dividend and a safe place to park some of my hard earned money for the recession to come. It produces income every month and that's also great moving forward over the next couple of years. Lot more upside I feel but if it goes lateral for a bit I am OK with that as well. I will add depending on what happens. I love reading peoples thoughts on this platform so with luck other will chirp up...good or bad we need to hear what folks think other than the analysts.
  • C
    This is the most important quote in the annual report:

    “From a financial perspective, the Corporation generated sufficient cash flow since the onset of the pandemic to cover its Maintenance Capital Expenditures, invest in the future through Growth Capital Expenditures and complete the acquisition of Window Installation Specialists Inc. ("WIS"), pay its dividend and reduce its debt, net of cash."
  • j
    As per Globe and Mail May 13 (behind paywall):
    "Exchange Income Corp. (EIF-T) said its first-quarter revenue grew 3 per cent to $307-million year-over-year. Analysts were expecting revenue of $326.6-million.
    Its net loss was $5.3-million, or 15 cents per share, versus a profit of $7.5-million, or 24 cents per share, a year earlier. Adjusted earnings were $2.1-million, or 6 cents, versus $12.7-million, or 41 cents, a year ago.
    The company said its Alberta operations have been heavily impacted by both the COVID-19 pandemic and record low oil prices, "which have caused many companies to delay or cancel large capital projects." As a result, the corporation recorded a $6.1-million impairment charge against intangible assets related to the Alberta operations during the quarter."
  • E
    Trailing Twelve Month Free Cash Flow less Maintenance Capital Expenditures payout ratio4 improved to 58% from 71%.

    are we going to get a dividend raise soon?
  • C
    Government of Canada just announced up to $174 million in funding for the next year in support of small Northern air carriers. This is good news for this company and it’s subsidiaries.
  • j
    I thought it would be good to place something here regarding EIF dividend payout ratio.
    Some lazy sites often calculate payout ratio incorrectly using earnings instead of cash flow, stupidly making the dividend look like it's on shaky ground. You have to know where the dividend is coming from.
    EIF's current 62% Payout Ratio is pretty healthy.

    This is from the 'CEO's Message' preamble of the Exchange Income Corp.'s First Quarter Report for the three months ended March 31, 2021. The report is up there on their site easily accessible.
    ---------------------- start of blurb -------------------------------
    Highlights from EIC’s first quarter financial performance include:
    • EBITDA of $64 million, an increase of 12% over the prior period
    • Revenue of $301 million, a decrease of 2% from the prior period
    • Adjusted Net Earnings of $11 million or $0.30 per basic share, an increase of 413% and 400%, respectively, over the prior period
    • Free Cash Flow of $42 million or $1.17 per basic share, an increase of 7% and 4%, respectively, over the prior period
    • Free Cash Flow less Maintenance Capital expenditures improved to $0.55 per basic share, from $0.07 in the prior period
    • Free Cash Flow less Maintenance Capital Expenditures payout ratio strengthens to 62% on a trailing twelve-month basis, improving from 68% at March 31, 2020
    EIC’s payout ratio on a Free Cash Flow less Maintenance Capital Expenditures basis is a strong indicator of our ability to navigate the
    pandemic and manage cash flow. The Company has maintained a healthy 62% payout ratio, stronger than the 68% recorded in the twelve
    months ending March 31, 2020, despite a full year of operation in the pandemic environment.
    ---------------------- end of blurb -------------------------------
  • C
    Market expected .35/share, here we have .59/share. Should be a nice bump tomorrow. Huge cash flow on the quarter as well. It's hard to believe a company in the aerospace sector primarily is this well managed and performing this well under pressure. Hats off to the management team. If there was anyone left nervous about their ability to fund the dividend they should sleep easy.
  • K
    What an amazing earning. Revenue & EPS beat, record high net income & revenue. Free cash flow looking good.
  • G
    Just started a small position of 100 shares. Maybe bad time to join since it has been steadily climbing. Will start doing more intensive DD. Just wanted to get in before end of month.
  • N
    I bought today. Company is in good condition and with this type of management at the helm, their u drawn capital may be used to make an acquisition. Even in 2008, they increased their dividends. I wouldn't bet against this team pulling something off here! Besides, their northern airlines are deemed essential. So while travel may have stalled, supply movement becomes essential!
  • A
    A different J
    I'm doing a little window shopping here. Looking to save a touch of time. Would someone care to address the listed 200% payout ratio with EIF. Thank you in advance of your response.
  • P
    Got only 200 shares on this puppy, wished I bought more months back!
  • R
    I appreciate the reply to my earlier comment on dividends. I am reading more about EIF to see if it's safe as the dividend is quite high. Analysts tracked by Refinitiv give it a 1 year target of 44.70, that's a more than 10% potential gain from here. Do you wish to share your own experience with this stock over the years, i.e. surprises good and bad, disappointment, whatever with me and others who may be reading this post? Thanks again!
  • R
    Is there some news that explains the stock high volume and outperformance today?
  • H
    I am looking to purchase this stock for long term.
    Any concern of the negative cash flow?