As Foolish investors know, dividend-paying stocks outperform non-dividend-paying stocks over the long term, and the top performers are those that increase their payouts as often as possible. With this in mind, let’s take a look at two industry giants that recently announced dividend increases, so you can decide if you should buy one of them today.
1. Power Financial Corp.
Power Financial Corp. (TSX:PWF) is a diversified management and holding company with interests, directly or indirectly, in companies in the financial services industries around the world.
In its fourth-quarter earnings report on March 23, it announced a 5.4% increase to its dividend to $0.3925 per share quarterly, or $1.57 per share annually, and this gives its stock a yield of about 4.9% at today’s levels.
Investors must also make two notes.
First, this increase puts Power Financial on pace for fiscal 2016 to mark the second consecutive year in which it has raised its annual dividend payment.
Second, I think the company’s record financial performance in fiscal 2015, including its 8.3% year-over-year increase in net earnings to $3.25 per share, will allow its streak of annual dividend increases to continue going forward.
2. Dollarama Inc.
Dollarama Inc. (TSX:DOL) is Canada’s largest owner and operator of dollar stores with 1,030 locations across all 10 provinces.
In its fourth-quarter earnings report on March 30, it announced an 11.1% increase to its dividend to $0.10 per share quarterly, or $0.40 per share annually, and this gives its stock a yield of about 0.4% at today’s levels.
A 0.4% yield is far from impressive, but investors must also make two notes.
First, this increase puts Dollarama on pace for fiscal 2017 to mark the fifth consecutive year in which it has raised its annual dividend payment.
Second, I think the company’s very strong growth of cash flows from operating activities, including its 26.2% year-over-year increase to $449.2 million in fiscal 2016, and its low payout ratio will allow its streak of annual dividend increases to continue for the foreseeable future.
