Dividend lovers, rejoice.
Even as stocks have struggled this year – the S&P/TSX Composite Index has slipped about 2.3 per cent year-to-date – many companies are continuing to raise their dividends.
This is great news for a couple of reasons. First, dividend hikes put more money in your pocket, which is always nice. Second, they signal management’s confidence about the future. When a company boosts its dividend, it’s basically telling you that the outlook for the business is positive.
With the strong economy also providing a tailwind, more companies are deciding to share the wealth with investors. Here’s a sample of companies that have raised their dividends in recent days.
Johnson & Johnson (JNJ-N)
- Price: US$122.61
- Annual dividend: US$3.60
- Yield: 2.9 per cent
When the weather turns warm, the birds start chirping and the trees begin to bud, it can only mean one thing: it’s time for Johnson & Johnson to increase its dividend. On April 26, the health-care giant raised its quarterly dividend by 7.1 per cent to 90 US cents a share – marking the 56th consecutive year that J&J has increased its payout to shareholders. I’m going to go way out on a limb and predict that next year will bring another increase.
Pembina Pipeline Corp. (PPL-T)
- Price: $44.27
- Annual dividend: $2.28
- Yield: 5.2 per cent
Thanks to last year’s acquisition of Veresen Inc. and new assets that have recently come into service, Pembina posted record first-quarter results, including a 36-per-cent increase in adjusted cash flow from operations per share. In announcing a 5.6-per-cent dividend increase on May 3 – to 19 cents a month from 18 cents – Pembina chief executive Michael Dilger cited the “ongoing strength of our business” and the “fantastic first-quarter results.” With Pembina having raised its dividend for seven consecutive years, investors are feeling pretty fantastic, too.
Apple Inc. (AAPL-Q)
- Price: US$186.05
- Annual dividend: US$2.92
- Yield: 1.6 per cent
Hard to believe that six years ago Apple paid no dividend at all. Now, it pays more dividends than any other company – and the amount keeps growing: On May 1, the iPhone maker raised its quarterly payout by 16 per cent to 73 US cents a share, which works out to about US$14.8-billion annually, eclipsing second-place Exxon Mobil Corp. by nearly US$1-billion. Apple investors are also enjoying a surging stock price, which hit a record following strong second-quarter results and news that Warren Buffett’s Berkshire Hathaway recently increased its stake in the technology giant.
A&W Revenue Royalties Income Fund (AW.UN-T)
- Price: $31.63
- Annual dividend: $1.656
- Yield: 5.2 per cent
Despite intense competition in the fast-food industry, burger purveyor A&W keeps serving up tasty results. The chain’s same-store sales have grown for 19 of the past 20 quarters – including an increase of 5.3 per cent in the first quarter of 2018 - helped by an emphasis on food quality and menu innovations such as all-day breakfast. With A&W also expanding rapidly, particularly in urban areas, the royalty fund has increased its distribution by about 18 per cent over the past three years, including a 1.5-per-cent hike - to 13.8 cents a month - announced on May 1.
Loblaw Cos. Ltd. (L-T)
- Price: $65.61
- Annual dividend: $1.18
- Yield: 1.8 per cent
PC Optimum points are nice. But most people would probably prefer cash - and grocery and drug giant Loblaw is happy to oblige. The company boosted its payout by 9.3 per cent to 29.5 cents a quarter on May 2 when it announced first-quarter results that included a 2.9-per-cent increase in retail sales (excluding the disposition of gas bar operations) and a 69-per-cent increase in net earnings per share. Loblaw parent George Weston Ltd. is feeling similarly generous: On Tuesday, the company raised its quarterly dividend by 7.7 per cent.
Sleep Country Canada Holdings Inc. (ZZZ-T)
- Price: $32.94
- Annual dividend: 74 cents
- Yield: 2.2 per cent
Some people like to put their money under a mattress. But investing it in mattress retailer Sleep Country Canada has produced much better returns: The company raised its dividend by 12 per cent on Monday - its third increase since going public in 2015 – after posting growth of 8.9 per cent in revenue and 3.7 per cent in earnings per share for the first quarter. Sleep Country’s stock has, well, fallen asleep in the past year, but it’s still produced an annualized total return – including dividends – of more than 33 per cent since its initial public offering.
Disclosure: The author owns units of AW.UN personally and in his model Yield Hog Dividend Growth Portfolio.