Earnings season is heating up, 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. With that in mind, let’s take a closer look at two companies that just raised their dividends by 5-11%, so you can determine if you should invest in one of them today.
Richelieu Hardware Ltd. (TSX: RCH)
Richelieu is one of North America’s largest importers, manufacturers, and distributors of specialty hardware and complementary products.
In its fourth-quarter earnings release on January 25, Richelieu announced a 5.8% increase to its quarterly dividend to $0.06 per share, equating to $0.24 per share annually, which brings its yield up to 0.8%.
It’s important to make the following three notes about Richelieu’s dividend.
First, the first quarterly installment at the increased rate is payable on February 22 to shareholders of record on February 8.
Second, 2017 marked the eighth straight year in which the hardware company had raised its annual dividend payment, and the hike it just announced has it positioned for 2018 to mark the ninth straight year with an increase.
Third, I think its consistently strong financial performance, including its 8.3% year-over-year increase in net earnings to $1.17 per share in fiscal 2017, and its ongoing acquisition activity that will fuel future growth, including its two strategic acquisitions in Ohio and Ontario in 2017, will allow its streak of annual dividend increases to easily continue into the 2020s.
Metro, Inc. (TSX: MRU)
Metro is one of Canada’s leading retailers and distributors of food and pharmaceuticals through its network of supermarkets, discount stores, and drug stores. Its banners include Metro, Super C, Food Basics, Drug Basics, Brunet, and Clini Plus.
In its fiscal 2018 first-quarter earnings release on January 30, Metro announced a 10.8% increase to its quarterly dividend to $0.18 per share, equating to $0.72 per share annually, which brings its yield up to about 1.8%.
Foolish investors must also make the following three notes about Metro’s dividend.
First, the first payment at the increased rate will come on March 13 to shareholders of record at the close of business on February 15.
Second, fiscal 2017 marked the 23rd consecutive year in which the company has raised its annual dividend payment, and the hike it just announced puts it on track for fiscal 2018 to mark the 24th consecutive year with an increase.
Third, Metro has a target dividend-payout range of 20-30% of its net earnings from the previous year before extraordinary items, so I think its continued growth, including its 15.5% year-over-year increase to an adjusted $0.67 per share in the first quarter of fiscal 2018, will allow its streak of annual dividend increases to continue for decades.
