Gildan Activewear Inc. (TSX:GIL)(NYSE:GIL) and Snc-Lavalin Group Inc. (TSX:SNC) rewarded their shareholders last Thursday by raising their dividends by 5-20%, extending their streaks of annual increases. Let’s take a closer look at each company, their new dividends, and their track records of dividend growth, so you can determine if you should invest in one of them today.
Gildan Activewear Inc.
Gildan is one of world’s largest manufacturers and distributors of apparel, including T-shirts, fleece, sport shirts, underwear, and socks. Its family of brands include Gildan, Gold Toe, American Apparel, Secret, and Kushyfoot.
In its fiscal 2017 fourth-quarter and full-year earnings release on February 22, Gildan announced a 19.8% increase to its quarterly dividend to US$0.112 per share, equating to US$0.448 per share on an annualized basis, which brings the yield on its NYSE-listed shares up to about 1.5%.
Foolish investors should make three additional notes about the new dividend.
First, the first payment at the increased rate will come on April 2 to shareholders of record on March 8.
Second, this dividend hike puts Gildan on track for 2018 to mark the sixth straight year in which it has raised its annual dividend payment.
Third, I think the apparel giant’s consistently strong financial performance, including its 30.3% year-over-year increase in free cash flow to US$519.2 million and its 13.9% year-over-year increase in earnings to an adjusted US$1.72 per share in fiscal 2017, will allow it to continue to deliver dividend growth to its shareholders for the foreseeable future.
Snc-Lavalin Group Inc.
Snc-Lavalin is one of the world’s largest fully integrated professional services and project-management companies. It provides end-to-end project solutions, including capital investment, consulting, design, engineering, construction, operations, and maintenance, to clients in multiple industries around the globe.
In its fiscal 2017 fourth-quarter and full-year earnings release on February 22, Snc-Lavalin announced a 5.1% increase to its quarterly dividend to $0.287 per share, equating to $1.148 per share on an annualized basis, which brings its yield up to about 2%.
It’s important to make the following three notes about the new dividend.
First, the first quarterly installment at the increased rate will be made on March 22 to shareholders of record at the close of business on March 8.
Second, this dividend hike puts it on pace for fiscal 2018 to mark the 17th consecutive year in which it has raised its annual dividend payment.
Third, I think Snc-Lavalin’s very strong earnings growth, including its 24% year-over-year increase to an adjusted $3.20 per share in 2017 and its projected 12-21% growth to $3.60-$3.85 in fiscal 2018, and its long-term growth potential given the huge infrastructure spending plans of Canada and the United States, will allow its streak of annual dividend increases to easily continue into the 2020s.
