An assortment of well-known retail banners and retail gasoline outlets offering essential products and services is your route to steady dividend income. Check out these two dividend-paying companies to build your income portfolio.
Canadian Tire
Canadian Tire (TSX: CTC.A) has various retail and gasoline outlets with a prominent profile throughout Canada. Its retail is led by its Canadian Tire stores and gas outlets. Its retail operations also include PartSource, Gas+, Mark’s Work Wearhouse, and FGL Sports, which covers Sport Chek, Hockey Experts, Sports Experts, National Sports, Intersport, Pro Hockey Life, and Atmosphere.
In 2013 it signed a new long-term relationship with its retail dealers. The company is focusing on advanced technology and digital innovations. Its strategy is to improve the efficiency of its business and transform the way it markets its brand. Its aim is to enhance its customers’ experience in-store as well as online.
For Q1 2014, its consolidated revenue was up 3.8% to $2.6 billion and its consolidated net income increased 3.6%. Its retail division revenue increased 3.4%, or $76.2 million, to $2.3 billion. This was driven by strong shipments at Canadian Tire and sales growth at FGL Sports, Mark’s, and Petroleum.
In Q1 2014, Canadian Tire announced a 14.3% dividend increase. It declared a $0.50 per share dividend on each common and Class A Non-Voting share. Its dividend yield is 1.40% and its five-year average dividend yield is 1.30%. The company’s dividend rate is $2.00.
Imperial Oil
Imperial Oil (TSX: IMO)(NYSEMKT: IMO) had earnings of $2.8 billion, or $3.32 per share, in 2013. It has 1,700 retail gas outlets; 470 of them are Imperial-owned. Its marketing brands are Esso and Mobil 1. Imperial Oil has an extensive network across Canada with a concentration in premium markets. Its retail market share is 18%, good for a No. 2 market position.
Esso has the No. 1 position in site contribution, non-fuel margin, and nest site cash cost in the industry. It offers Tim Hortons products in various outlets. Its retail gasoline banners include Esso and On the Run.
Imperial Oil’s annual per-share dividends paid have increased 19 years in a row. In 2013, its total distribution to shareholders — that is, dividend payments and share repurchases — was $407 million. The company recently announced a quarterly dividend of $0.13 per share. Imperial Oil’s current dividend yield is 0.92%. Its five-year average dividend yield is 1% and its dividend rate is $0.52 annualized. Through a combination of share reductions and dividends, Imperial Oil returned $13 billion to shareholders from 2004 to 2013.
You can’t go wrong with companies offering products and services that Canadians use every day. I believe Canadian Tire and Imperial Oil will be around for years to come, consistently providing a solid return to investors.
