Earnings season is in full swing, and not only is it a great time to see the most up-to-date financials of the world’s largest companies, but it’s also the most popular time for companies to raise their dividends. Let’s take a look at two companies that did just that to the tune of 2-5%, so you can determine if you should invest in one of them today.
Finning International Inc.
Finning International Inc. (TSX:FTT) is the world’s largest Caterpillar dealer. It sells, rents, and provides parts and services for equipment and engines to customers in Canada, Chile, Argentina, Bolivia, the U.K., and Ireland.
In its second-quarter earnings release on August 9, Finning announced a 4.1% increase to its quarterly dividend to $0.19 per share, equal to $0.76 per share on an annualized basis, which brings its yield up to about 2.7% today.
Investors must also make the following two notes about Finning’s new dividend.
First, the first quarterly installment at the increased rate will come on September 7 to shareholders of record at the close of business on August 24.
Second, Finning has raised its annual dividend payment for 15 consecutive years, and this hike puts it on track for 2017 to mark the 16th consecutive year with an increase.
Smart REIT (TSX:SRU.UN) is one of Canada’s largest owners and managers of commercial real estate. As of June 30, its portfolio consisted of 152 properties totaling about 32 million square feet of gross leasable area.
In its second-quarter earnings release on August 9, Smart REIT announced a 2.9% increase to its monthly distribution to $0.145833 per unit, equal to $1.75 per unit annually, which brings its yield up to about 5.8% today.
It’s also very important to make the following two notes about Smart REIT’s new distribution.
First, this increase is effective for its October 2017 distribution, which means unitholders will continue to receive monthly distributions of $0.14167 per unit for the months of August and September before it’s raised to $0.145833 per unit in October.
Second, Smart REIT was already on pace for 2017 to mark the fourth consecutive year in which it has raised its annual distribution, and the hike it just announced puts it on pace for 2018 to mark the fifth consecutive year with an increase.
Should you buy one of these dividend growers today?
I think Finning International and Smart REIT represent very attractive long-term investment opportunities, so take a closer look at each and consider adding one of them to your portfolio today.