One of the most successful investment strategies is to buy and hold stocks with track records of dividend growth; this is because a rising dividend is a sign of a very strong business with excellent cash flows and earnings to support increased payouts, and the dividends themselves really add up over time when you reinvest them.
With this in mind, let’s take a closer look at two stocks that just raised their dividends by 4-9%, so you can determine if you should invest in one of them today.
Granite Real Estate Investment Trust
Granite Real Estate Investment Trust (TSX:GRT.UN)(NYSE:GRP) is one of the world’s largest owners and managers of industrial real estate with over 90 properties that total approximately 32 million square feet.
In its third-quarter earnings release on November 7, Granite announced a 4.6% increase to its monthly distribution to $0.227 per unit, equal to $2.72 per unit on an annualized basis, which brings its yield up to about 5.3% at the time of this writing.
Investors should make the following two notes about Granite’s new distribution.
First, this increase is effective for its December 2017 distribution, which is payable in mid-January 2018.
Second, the company was already on track for 2017 to mark the fifth consecutive year in which it has raised its annual distribution, and this increase puts it on track for 2018 to mark the sixth consecutive year with an increase.
Industrial Alliance Insurance and Financial Services Inc.
Industrial Alliance Insur. & Fin. Ser. (TSX:IAG) is one of Canada’s leading providers of financial products and services, such as life, health, auto, home, and creditor insurance.
In its third-quarter earnings release on November 8, Industrial Alliance announced an 8.6% increase to its quarterly dividend to $0.38 per share, equal to $1.52 per share on an annualized basis, which brings its yield up to about 2.5% at the time of this writing.
Foolish investors should also make the following three notes about Industrial Alliance’s dividend
First, the first payment at the increased rate is payable on December 15 to all common shareholders of record at the close of business on November 24.
Second, the company’s 9.4% dividend hike in February puts it on pace for 2017 to mark the fourth consecutive year in which it has raised its annual dividend payment, and the hike it just announced puts it on track for 2018 to mark the fifth consecutive year with an increase.
Third, Industrial Alliance has a target dividend-payout range of 25-35% of its net earnings, so I think its consistently strong growth, including its 2.3% year-over-year increase to an adjusted $3.61 per share in the first nine months of 2017, will allow its streak of annual dividend increases to continue in 2019 and beyond.