Growing dividends give you advantages. Continue to seek stocks that regularly raise their dividends. Particularly Key stock ‘dividend aristocrats’ shown below.
At this time of the year, many stocks raise their dividends. This gives you four advantages.
First, 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.
Second, growing dividends make it likely that you’ll earn share price gains over time. As dividends 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.
Third, 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.
Fourth, insisting on dividends keeps you out of most scams. Most scams aim to take your money rather than make any money for you.
13 stocks that raise their dividends
Barrick Gold Corp. now pays US$0.40 a share. That’s up 11.1 per cent from $0.36 a share. In 2015 and 2016, the company cut its dividend twice, from $0.20 a share to $0.08. Since then, however, the dividend has been growing by leaps and bounds. We rate Barrick a buy.
BCE Inc. now pays $3.68 a share. That’s up 5.1 per cent per cent from $3.50 a share. BCE is a Canadian ‘dividend aristocrat’. In the past 10 years, the company has raised its dividend by 5.9 per cent a year. It remains a buy.
Canadian National Railway Co. now pays $2.93 a share. That’s up 19.1 per cent from $2.46 a share. This dividend aristocrat is also buying back its shares. Buy.
Goeasy Ltd. now pays $3.64 a share. That’s up a stellar 37.9 per cent from $2.64 a share. This marks the 8th consecutive year of increasing dividends. Buy this dividend aristocrat.
Imperial Oil Ltd. now pays $1.36 a share. That’s up 25.9 per cent from $1.08 a share, thanks partly to a resurgence of commodity prices. This aristocrat is a buy for growth and some income.
Johnson & Johnson pays US$4.24 a share. That’s up 2.9 per cent from $4.12 a share. The compound annual growth rate of the dividend over the past 10 years is 5.9 per cent. Buy this dividend aristocrat.
Magna International Inc. now pays US$1.80 a share. That’s up 4.7 per cent from $1.72 a share. Magna cut its dividend during the financial crisis of 2009. Since then, it’s been on the rise. Magna is a dividend aristocrat and it’s still a buy.
Metro Inc. now pays $1.10 a share. That’s up 10 per cent from $1.00 a share. This dividend aristocrat remains a buy for long-term growth and some income.
Nutrien Ltd. now pays US$1.92 a share. That’s up 4.3 per cent from $1.84 a share. Nutrien has not been around long enough to be an aristocrat. But it seems like it’s well on its way. Buy.
TC Energy now pays $3.60 a share. That’s up 3.4 per cent from $3.48 a share. This is the 22nd consecutive year this aristocrat has raised its dividend. Buy.
3M Company has increased its dividend 0.7 per cent to $5.96 a share from $5.92 a share. This is the 64th consecutive year that this dividend aristocrat has raised its dividend. Buy.
Toromont Industries Ltd. has increased its dividend 11.4 per cent to $1.56 a share from $1.40 a share. This is the 33rd consecutive year of dividend increases. Buy this dividend aristocrat.
West Fraser Timber Co. Ltd. has increased its dividend a generous 25.0 per cent to US$1.25 a share from $1.00 a share. Even so, we believe this stock is mostly a buy for growth.
This is an edited version of an article that was originally published for subscribers in the March 4, 2022, 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.
133 Richmond St. W., Toronto, On, M5H 3M8, 1-800-804-8846