Saturday, December 4, 2021

Sixteen companies delivering value to their shareholders

A dividend increase shows a commitment to enhancing total shareholder returns through both strong business performance and returning cash to shareholders.

It is a testament to a diligent capital allocation and management framework, and it reinforces our commitment to deliver value for our shareholders. The increase in the dividend highlights the board of directors confidence in the company’s overall financial condition and its increasing earnings capacity. It usually shows that they are allocating capital with the best interest of shareholders in mind.

During the past week, there were several companies with established track records that rewarded their shareholders with a dividend increase. The companies include:

This is a list of companies for further review. Most seem attractive as businesses, but that doesn’t mean that they should be invested in at any price, regardless of valuation.

The next step is to check each business, in order to determine if it is worth further review. I would look at ten year trends in earnings per share, dividends per share, payout ratios, shares outstanding. I would try to understand what the business does, and make an assessment if the good times would continue, so that I can expect higher earnings, dividends and intrinsic values over time. I would look at the valuation relative to earnings and dividend growth, in order to determine if the business is fairly valued, if it looks promising too. For a sample analysis of McCormick from 2018, check this article.

I wanted to add that Christmas has come early this year for Canadian Bank Stock Investors. The six largest Canadian banks all raised dividends last week. They haven't ALL raised dividends for a decade, but they are widely-held from many Dividend Growth Investors.

I have listed the raises below. Please note, the currency is in Canadian Dollars. 

Bank of Montreal (BMO) increased its quarterly dividend by 25.50% to $1.33/share. 

Bank of Nova Scotia (BNS) increased quarterly dividends by 11% to $1/share.

Toronto-Dominion Bank (TD) raised quarterly dividends by 12.70% to $0.89/share. The bank has raised annual dividends since 2011.

Canadian Imperial Bank (CM) raised quarterly dividends by 10.30% to $1.61/share. The bank has raised annual dividends since 2011.

Royal Bank of Canada (RY) raised quarterly dividends by 11% to $1.20/share. The bank has raised annual dividends since 2011.

National Bank of Canada (NA) raised its quarterly dividend by 22.50% to $0.87/share. Please note this is the ticker in Canada. In the US, it trades OTC under (NTIOF)

Companies listed in this post include: AES, AMGN, AXS, ECL, EGP, EMN, GGG, MA, MKC, MORN, MRK, NUE, RGCO, SLG, UHT, WEC, BNS, BMO, TD, NA, CM, RY

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