Growing dividends give you advantages. Continue to seek stocks that regularly raise their dividends. Particularly the nine ‘dividend aristocrats’ shown below.
Growing dividends lead to capital gains too. More and more retirees need growing income and will bid up the price of dividend-growing stocks.
At this time of the year, many stocks raise their dividends. During March, 11 of our Key stocks have raised their dividends. Rising dividends give you four advantages:
1. Growing dividends let you beat inflation. As your streams of dividends rise, you’ll find it easier to keep up with the higher cost of living.
2. Growing dividends make it likely that you’ll earn share price gains over time. As they go up, so will their yield. That gives you either an increasing yield, or share price gains or, most likely, some combination of the two. The fact is, more and more retirees need income. That’s why they’ll bid up the price of your dividend-growing stocks. Even in stock market setbacks, dividends usually go on and on, regardless of share prices.
3. Many dividends still yield more than government bonds. Remember, too, that Canadian dividends benefit from the dividend tax credit. Interest, by contrast, is fully taxed.
4. Insisting on dividends keeps you out of most scams. Most scams aim to take your money rather than make any money for you.
11 Key Stocks that have raised their dividend
■ Alimentation Couche-Tard Inc. (TSX—ATD.B) now pays $0.50 a share. That’s up by a healthy 25.0 per cent from $0.40 a share. Couche-Tard is a Canadian ‘dividend aristocrat’ as it has raised its dividend five years in a row. It remains a buy.
■ CCL Industries Inc. (TSX—CCL.B) now pays $0.68 a share. That’s up a stellar 30.8 per cent from $0.52 a share. CCL is not a Canadian ‘dividend aristocrat’ as it has not raised its dividend for five years in a row. Nonetheless, it’s still a buy for growth and some income.
■ Encana Corp. (TSX—ECA) now pays US$0.0752 a share. That’s up 25.3 per cent from US$0.06 a share. This increase is encouraging as Encana had to cut its dividend back in 2016 due to low energy prices.
■ Gildan Activewear Inc. (TSX—GIL) now pays US$0.536 a share. That’s up by a pleasing 19.6 per cent from US$0.448 a share. Buy this dividend aristocrat.
■ Magna International Inc. (TSX—MG) now pays US$1.46 a share. That’s up 10.6 per cent from US$1.32 a share. Buy this dividend aristocrat.
■ NFI Group Inc. (TSX—NFI) now pays $1.70 a share. That’s up by a pleasing 13.3 per cent from $1.50 a share. This dividend aristocrat remains a buy.
■ Royal Bank of Canada (TSX—RY) now pays $4.08 a share. That’s up 4.1 per cent from $3.92 a share. Buy this high-quality dividend aristocrat.
■ Scotiabank (TSX—BNS) now pays $3.48 a share. That’s up 2.4 per cent from $3.40 a share. It’s a dividend aristocrat and it’s still a buy.
■ Stantec Inc. (TSX—STN) now pays $0.58 a share. That’s up by a somewhat modest 5.5 per cent from $0.55 a share. This dividend aristocrat remains a buy for long-term growth and some income.
■ Stella-Jones Inc. (TSX—SJ) now pays $0.56 a share. That’s up by a generous 16.7 per cent from $0.48 a share. Buy this dividend aristocrat.
■ The Toronto-Dominion Bank (TSX—TD) now pays $2.96 a share. That’s up an impressive 10.4 per cent from $2.68 a share. This dividend aristocrat has led the banks in dividend and earnings per share growth in recent years. Buy.
This is an edited version of an article that was originally published for subscribers in the April 5, 2019, issue of The Investment Reporter. You can profit from the award-winning advice subscribers receive regularly in The Investment Reporter.
The Investment Reporter, MPL Communications Inc.
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The Investment Reporter •7/13/19 •