Sunday, February 15, 2015

Recent Dividend Increases

 


     When you work at a job, you look forward to a raise, regardless of why.  These raises can come to just yourself or to every one in the form of a cost of living increase.  Psychologically, a raise that only yourself gets is a lot better.
    As an investor in a dividend growth stock, an investor can receive a raise in the form of a dividend increase. A dividend growth stock usually has a low yield due to a lot of investors buy shares in the so-called stable company that has a history of raising dividends.  Investors like to buy these stocks for the long term, so the price of the stock increases due to demand of buyers.

Recent Dividend Increases

       Four companies that have ownership in recently announced dividend increases. The 4 companies are Emera (EMA), Rogers Communications -  Class B shares (RCI.B), Shaw (SJR.B) and Bell Canada (BCE) .
        Emera recently raised its dividend from  $1.55 to $1.60 per share.  This represents a increase of 3.2% to the annual dividend.  I currently own 100 shares of EMA, so this represents a $5.00 increase to my annual dividend income. Although this is a rather small amount, every little bit helps. Emera also announced a dividend increase back in Sept 2014 from $1.45 to $1.55 per share.  So these increases represent roughly a 10.3 % of increases during the last 12 months.  Emera will pay a dividend this month, but the May dividend payment will be the first dividend payment under the new dividend rate.
         Rogers Communications has recently raised its dividend from $1.83 to $1.92, which represents an increase of 4.92% increase.  I currently own 100 shares of RCI.B , so this represents a $9.00 increase to my annual dividend income. The first dividend payment will be April 1.
         Shaw Communications has recently increased its monthly dividend  from  $0.091667 to $0.09875 per share.   I currently own 200 shares of SJR.B, so this represents $17.00 increase to my annual dividend income. The first monthly dividend payment of the increased amount will be near the end of March.
           Bell Canada Enterprises (BCE) recently released its quarterly earnings and stated that the company has seen an increased in profits of nearly 10% for the fourth quarter.  BCE also announced they will be increasing their annual dividend by 5.3% from $2.47 to $2.60.  I currently own 100 shares so this dividend increase adds $52.00 to my annual dividend income.

Conclusion

     I did not have to do any extra work to get these dividend increases. The companies continued to serve their customers and provide services to their customers to go about living their daily lives.  My annual dividend income increased $83.00 by doing absolutely nothing after the original research prior to starting the investment.

NOTE: All the stocks above were purchased on the Toronto Stock Exchange in Canada, as that is the country I reside in. Some of the stocks listed above are listed on the NYSE also but may not have the same ticker symbol.

Disclosure : Long EMA, RCI.B, BCE, SJR.B

Photo Credit : www.bornrich.com

DISCLAIMER:

     I am not a financial planner, financial advisor, accountant or tax attorney. The information on this blog represents my own thoughts and opinions and should NOT be taken as investment or business advice.  Every individual should do their due diligence to make their own financial decisions based on their financial situation and tolerance for risk

4 comments:

  1. Always happy to read about dividend increases even though I don't own any of the names mentioned in this article it's still a validation for strong businesses as dividends can't be faked. Thanks for sharing.

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    1. DivHut,

      Yes, dividends are a strong validation for profitable businesses. When a company announces they will pay a dividend in the coming weeks or month, it sends a signal to investors that the company wants to share in the profits of the company with its investors. The rest of the earnings are used to growth company and these earnings are known as retained earnings.
      If a company has to borrow money to pay its dividend is when paying a dividend is not good at all. This is usually indicated with a dividend payout ratio near or over 100%. If the dividend payout ration is over 90% it is definitely a sign the company is in financial trouble at the current time. There are exceptions like REITs and BDCs which FFO and NII instead of EPS and must pay out 90% of their profits by law.

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  2. Yay for dividend hikes. I'm long RCI.B and BCE. The telecom industry in this country will continue to grow because of population growth. It's debatable whether more immigration is good or bad for Canada, but from an investment point of view having more people should be beneficial to capital markets. :)

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    Replies
    1. Liquid Independence,

      Immigrants are a benefit to these companies for sure. THe more people the come and stay here the more demand there are to use the products and services of these companies. This means more profits and more dividends. What is there not to like about that?

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