If you’re in search of a great dividend stock to add to your portfolio, then this article is for you. I’ve scoured the market and selected three with yields of 3-6%, so let’s take a quick look at each to determine which would fit best in your portfolio.
1. Manulife Financial Corp.
Manulife Financial Corp. (TSX:MFC)(NYSE:MFC) is one of the world’s leading providers of financial products and services. It operates as John Hancock in the United States and Manulife elsewhere, and its offerings include financial advice, insurance, and wealth and asset management solutions for individuals, groups, and institutions.
It pays a quarterly dividend of $0.185 per share, or $0.74 per share annually, which gives its stock a yield of about 3.8% at today’s levels.
It’s also important to make two notes about its dividend.
First, Manulife has raised its annual dividend payment for two consecutive years, and its two hikes since the start of 2015, including its 9.7% hike in May 2015 and its 8.8% hike in February of this year, have it on pace for 2016 to mark the third consecutive year with an increase.
Second, I think the company’s very strong growth of core earnings, including its 13.5% year-over-year increase to $1.68 per share in fiscal 2015 and its 12.8% year-over-year increase to $0.44 per share in the first quarter of 2016, will allow its streak of annual dividend increases to continue for many years to come.
2. Bird Construction Inc.
Bird Construction Inc. (TSX:BDT) is one of Canada’s largest general contractors. Its operational capabilities cater to all stages of the construction process, such as estimating and scheduling, financing, logistics and procurement, building information modeling, sustainable design, and development and construction.
It pays a monthly dividend of $0.0633 per share, or $0.76 per share annually, which gives its stock a yield of about 5.7% at today’s levels.
It’s also important to make two notes about its dividend.
First, Bird Construction has maintained its current annual dividend rate since 2014.
Second, I think the company’s very strong growth of operating cash flow before changes in non-working capital, including its 48.8% year-over-year increase to $15 million in the first quarter of 2016, and its modest dividend payout ratio, including 53.8% of its operating cash flow in the first quarter, will allow it to raise its dividend before the end of the year.
3. Methanex Corporation
Methanex Corporation (TSX:MX)(NASDAQ:MEOH) is the world’s largest producer of methanol. It has production sites in Trinidad, New Zealand, Egypt, Canada, the United States, and Chile, allowing it to be one of the primary suppliers to major international markets in North America, Asia Pacific, Europe, and South America.
It pays a quarterly dividend of US$0.275 per share, or US$1.10 per share annually, which gives its stock a yield of about 3.4% at today’s levels.
It’s also important to make two notes about its dividend.
First, Methanex has raised its annual dividend payment for five consecutive years, and its 10% hike in April 2015 has it on pace for 2016 to mark the sixth consecutive year with an increase.
Second, I think the company’s very strong growth of operating cash flow, including its 89.2% year-over-year increase to US$70 million in the first quarter of 2016, its very low dividend payout ratio, including a mere 35.7% of its operating cash flow in the first quarter, and its ample amount of cash on hand, including US$275 million at the end of the first quarter, will allow its streak of annual dividend increases to continue going forward despite the challenges facing the methanol industry.
