Many new investors focus on high-yield dividend stocks as they tend to offer a stable and regular income stream. While it is tempting to chase the highest dividend yields in the market, experienced investors know that dividend growth is equally important. Dividend growth indicates a company’s ability to generate consistent and increasing cash flows, which can support future payouts and capital appreciation.
In this article, I’ll reveal two incredible dividend growers that you should buy hand over fist in July 2024 and give you reasons why you should buy them hand over fist in July 2024 before they become even more expensive.
Manulife Financial stock
Manulife Financial (TSX: MFC) is currently one of the most attractive dividend growers in Canada. This Toronto-headquartered financial services firm has raised its dividend per share by around 181% over the last decade (between 2013 and 2023). It currently has a market cap of $64.4 billion, as MFC stock trades at $35.99 per share after rallying by 22.3% so far in 2024. With this, the stock is continuing to outperform the broader market by a wide margin, as the TSX Composite benchmark is currently up 8.9% year to date.
This global firm provides a wide range of financial products, including insurance, wealth management, and retirement solutions, to customers in Asia, Canada, and the United States. In the last four quarters ended in March 2024, Manulife’s revenue went up 7.9% YoY (year over year) to $25 billion. More importantly, the company’s adjusted earnings during these 12 months jumped by 15.7% YoY to $3.61 per share, partly due to steady business expansion and higher fee income in its global wealth and asset management operations.
Overall, Manulife’s solid capital position and focus on optimizing its portfolio through reinsurance transactions ensure its long-term growth prospects remain intact. In addition, gradually declining interest rates in Canada could help it post stronger growth in the years to come.
Scotiabank stock
Bank of Nova Scotia (TSX: BNS), or Scotiabank, could turn out to be another big winner in the coming years as the Bank of Canada’s decision to continue slashing interest rates is likely to boost its lending and deposit activities. Scotiabank is one of the most diversified Canadian banks, with a strong presence in high-growth international markets.
BNS stock currently trades at $63.56 per share with a market cap of $78.2 billion after surging by 12.2% over the last nine months. At this market price, it has an attractive 6.7% annualized dividend yield, which might not remain this attractive for long if the stock continues its upward trajectory. Over the past decade, Scotiabank has consistently increased its dividend, with a total growth of about 76% between 2013 and 2023, reflecting its robust financial health and commitment to returning value to shareholders.
In the last four quarters ended in April 2024, Scotiabank’s revenue grew by 5.9% YoY to $33.3 billion. Although higher provisions for credit losses due to the challenging macroeconomic environment affected its profitability, I expect its earnings growth to improve significantly in the coming years as the lower interest rate environment continues to stimulate borrowing and spending. This, combined with the bank’s strategic investments in digital banking and expansion in high-growth markets, should help it continue growing dividends in the long run.
