Dividend payments can be used to save for retirement, replace a portion of your income, or smooth out significant market losses. Regardless of your goals, all dividend investors want the same thing: the assurance that the company they invest in will not significantly reduce or discontinue its dividend payments. Let’s take a look at two companies you can count on as far as secure dividends are concerned.
Dividend investors will no doubt appreciate the fact that Russel Metals (TSX:RUS) lists providing steady returns to shareholders by way of dividends as one of the company’s primary goals. The Ontario-based metals distribution and processing company stands out as one of the largest in a crowded field in its industry, with operations across both the U.S. and Canada.
Russel Metals’ two largest segments by revenue are its metals service centers and energy products. The company’s financial performance within these sectors is influenced by metal prices, oil prices, and shipping costs (among others), all of which are sensitive to the global economic climate. This can render the company’s profits from one year to the next relatively unpredictable. This cyclicality hasn’t stopped RUS from issuing dividend payouts in 67 straight quarters; that’s almost 17 years of uninterrupted dividend payouts.
Despite a difficult economic environment, Russel Metals’ latest earnings report was strong, The company’s revenues increased by 34% year over year, while earnings before expenses and taxes, net income, and earnings per share grew by 76%, 100%, and 66%, respectively. Russel Metals currently offers a juicy yield of 6.62%.
Great-West Lifeco (TSX:GWO) operates as a holding company with subsidiaries in Canada, the U.S., and Europe. The Ontario-based company provides life and health insurance services, as well as asset management, and investment and retirement savings.
There are no shortages of life and health insurance companies on the stock market, but this industry is not generally known as being particularly generous with its dividend payouts. GWO, on the other hand, currently offers a yield of 5.64%. Unlike many of its competitors, the company has consistently paid dividends throughout the years,
GWO’s latest earnings were good. The company’s top line saw solid improvement year over year, with a 37% in sales (sales growth occurred in every segment). GWO’s net earnings improved by 81%, although adjusted net earnings decreased by 3% due to various changes in tax and accounting measures. These results led the company to approve a 6% increase in dividends.
Overall, GWO’s business growth was evident, and its operations in Europe showed some progress. If GWO can continue growing sales at the same rate while cutting down costs, the company will keep generating enough cash to cover its dividend payments.
The bottom line
Both Russel Metals and Great-West Lifeco have a strong history of paying and raising their dividends, as well as solid sales and revenue growth. Investors can count on these stocks to continue issuing dividends for years to come.
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Fool contributor Prosper Bakiny has no position in the companies mentioned.