Brett Owens is a leading on income investing; the editor of the industry-leading Contrarian Outlook ...
Love Those Rising Dividends!
05/23/2013 9:45 am EST
Here's a look at two Canadian stocks that are giving their shareholders a little extra these days, writes John Deman of the Money Reporter.
BCE (BCE in New York and Toronto) is expected to make $2.98 per share in fiscal 2013, 6.2% less than the year before. Based on the first quarter, it's well on its way to exceeding that target.
First-quarter earnings were up 12%, not down, to 77 cents per share from 69 cents. In fiscal 2012, BCE made $3.18 per share, so it's already almost one-quarter of the way to matching that. Profit gains are good, and so are dividend increases.
When BCE announced its 2012 results, the company also indicated another dividend increase; it had just raised its payout two updates prior to that, and that in turn was an increase from the update before. The annual payout of $2.33 per share leads to a juicy 4.87% current yield for a safe company.
Higher earnings and higher dividends tend to lead to a higher stock price, and that's the case here. BCE's share price is up 7.41% in three months, and 17.4% in a year. Last update the stock was also up, so now it's two in a row.
And what about growth at this venerable incumbent? BCE now owns one-half of a 75% stake in Maple Leafs Sports and Entertainment for half of $1.3 billion (Rogers bought the other half of the 75% stake, and Larry Tanenbaum owns the other 25%).
The lockout is now over, the Leafs made the playoffs, and the hockey-related revenue is now flowing. And BCE is still pursuing Astral, to give it a bigger footprint in Quebec in particular. BCE is a buy for dividends and further gains.
Also, as income investors we love dividend increases, and this month it's Bank of Nova Scotia's (BNS, also both in NY and Toronto) turn to reward us. Canada's most international bank is now paying $2.40 per share, up from $2.28 annually. So that 's good.
We like earnings too, and BNS is expected to make $5.17 per share this year, 9.6% more than a year ago. Second-quarter earnings come out just days after our press deadline, but in the first quarter, earnings were up 4% to $1.25 per share, so that's a start.
Two updates ago, the bank raised its dividend to $2.28 per share, up from $2.20 annually. And this update, the stock price is up 0.97% in three months, the third increase in a row, and 11.9% from a year ago. BNS is a buy.
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