3 Stocks Set for Dividend Increases This Year

Here are three TSX stocks that are set to increase their dividends later this year.

| More on:
Business success with growing, rising charts and businessman in background

Image source: Getty Images

Wouldn’t it be reassuring to hold a group of stocks that tend to increase their dividends every year? Receiving dividends and increasing income is certainly something to look forward to. Here are three TSX stocks that are set to increase their dividends later this year, with one raising its dividend as soon as next month!

Empire

You might have shopped at Empire’s (TSX:EMP.A) grocery stores this week. Its list of banners includes, but is not limited to, Safeway, Sobeys, Thrifty Foods, IGA, Longo’s, Farm Boy, Lawtons Drugs, etc. Although the dividend stock’s yield is below 2.2%, at $33.74 per share at writing, it is a top dividend-growth stock on the TSX with 29 consecutive years of dividend increases.

For your reference, its 20-year dividend-growth rate is 9.1%, while its last dividend hike was 10.3%. According to its usual dividend increase schedule, investors can look forward to its upcoming dividend hike within a month! The hike should be around 7-10%. At the recent quotation, Empire stock trades at a reasonable price-to-earnings (P/E) ratio of about 12.3.

Fortis

Fortis (TSX:FTS) is a blue-chip stock to buy on meaningful dips for passive investors. It has increased its dividend for half a century, and it’s about to increase its dividend again later this year. The dividend declaration will come sometime in September, according to its usual dividend-hike schedule.

Because of higher interest rates since 2022, the cost of capital has increased, growth is lower, and the valuation of Fortis stock has come down to the current P/E of about 17.4 at $54.43 per share at writing. Normally, it could trade at about 19.4 times. So, one could say it is fairly valued in today’s higher interest rate environment.

At the recent quotation, the utility stock offers a dividend yield of 4.3%. Although growth has slowed, management still expects to increase the dividend by 4-6% per year over the next few years. So, assuming a 4% dividend hike in September, the forward yield is about 4.5%, which is not bad.

Alimentation Couche-Tard

Alimentation Couche-Tard (TSX:ATD) stock has done a wonderful job by making long-term investors richer. For example, in the last five years, it almost doubled investors’ money, delivering higher returns than the Canadian stock market (using iShares S&P/TSX 60 Index ETF as a proxy) and the Canadian consumer staples sector (using iShares S&P/TSX Capped Consumer Staples Index ETF as a proxy), as shown in the YCharts below.

XIU Total Return Level Chart

XIU, XST, and ATD Total Return Level data by YCharts

Although Couche-Tard offers a small dividend yield of about 0.9%, the global convenience store consolidator has been a diligent dividend grower. Its 15-year dividend-growth rate is about 24%, while its last dividend hike was 25%. Investors can look forward to another dividend increase in late November based on its usual dividend-hike schedule.

At $80.55 per share at writing, the consumer staples stock appears to be fairly valued. Notably, Couche-Tard will be reporting its fiscal fourth-quarter and full-year results on June 25. Interested investors could wait for the latest results and outlook to come out before buying shares.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

Fool contributor Kay Ng has positions in Alimentation Couche-Tard and Fortis. The Motley Fool has positions in and recommends Alimentation Couche-Tard. The Motley Fool recommends Fortis. The Motley Fool has a disclosure policy.

More on Dividend Stocks

calculate and analyze stock
Dividend Stocks

4 Fabulous Dividend Stocks to Buy in July

Are you looking for long-term income? These four dividend stocks should not only provide you with value in July but…

Read more »

financial freedom sign
Dividend Stocks

5 Steps to Financial Freedom for Canadian Millennials

Follow these steps and nothing can stop Canadian millennials from achieving their early retirement dreams.

Read more »

Investor wonders if it's safe to buy stocks now
Dividend Stocks

We’re Only Getting Older: A Top TSX Stock That Benefits From an Aging Population

For a bet on the aging population, consider this small-cap stock with growth potential.

Read more »

Growing plant shoots on coins
Dividend Stocks

Yield Today, Growth Tomorrow: 3 Stocks to Keep Building Your Wealth

For investors seeking yield today and growth tomorrow, these top Canadian dividend stocks are certainly worth considering right now.

Read more »

Payday ringed on a calendar
Dividend Stocks

This 10.72% Dividend Stock Pays Cash Every Month

This dividend stock remains a consistent, defensive dividend producer that will give up over 10% in income each and every…

Read more »

Blocks conceptualizing Canada's Tax Free Savings Account
Dividend Stocks

TFSA Investors: 2 Standout Domestic Stocks With 7% Yields

These top dividend-growth stocks look oversold.

Read more »

Dividend Stocks

2 Dividend Stocks to Double Up on Right Now

Despite their recent declines, the long-term growth outlook of these two top dividend stocks remains strong, which could help their…

Read more »

A close up color image of a small green plant sprouting out of a pile of Canadian dollar coins "loonies."
Dividend Stocks

Growth Stocks vs. Value Stocks: Which Should You Choose?

There are growth stocks and value stocks, but there are also growing value stocks that fit into both sides of…

Read more »