Investors tend to pigeon-hole themselves, with a tendency to focus exclusively on stocks domiciled in the United States. Some may be wary of diversifying their equity holdings internationally, due to a slew of geopolitical headline risks that seem to resurface every few months or so.
Fortunately for investors, you don’t need to buy stocks from across the world that you’ve never heard of, nor do you need to take outsized risk in order to diversify internationally. In fact, many highly profitable stocks located in Canada offer investors high dividend growth, and are difficult to ignore in this low-rate investing environment.
Go north and prosper
For the most part, income investors prefer stocks that pay dividend yields that exceed the yield on the broader market, which currently stands at about 2% annualized as measured by the yield on the S&P 500 Index.
Even better are companies that have such high levels of financial success that they can afford to increase their payouts at high rates, meaning investors can compound their wealth even faster over time.
There are many Canadian dividend stocks, with dividend growth rates that should excite income investors. For starters, integrated energy company Suncor Energy Inc. (USA) (NYSE:SU) has taken huge steps to bump up its shareholder distribution.
The company reported solid fiscal first-quarter results, in which Suncor Energy Inc. (USA) (NYSE:SU) recorded strong operating earnings of $1.36 billion ($0.90 per common share), compared to $1.31 billion ($0.84 per common share) for the first quarter of 2012. This 7% increase in profitability was realized through a combination of efforts, including record quarterly production of more than 357,000 barrels per day and a 9% decrease in cash operating costs per barrel from their oil sands operations.
Suncor Energy Inc. (USA) (NYSE:SU) is doing a great job of funneling their operating success through to their shareholders. Along with the company’s first-quarter report, Suncor Energy Inc. (USA) (NYSE:SU) increased its dividend by a gigantic 54%, to its current yield of 2.5% annualized. Suncor Energy Inc. (USA) (NYSE:SU) also announced it would repurchase up to an additional $2 billion of its own shares. Clearly, Suncor Energy Inc. (USA) (NYSE:SU) takes the subject of shareholder rewards very seriously.
Another Canadian company that rewards it shareholders is fertilizer giant Potash Corp./Saskatchewan (USA) (NYSE:POT), which recently announced an impressive 25% increase in its payout. Dividend increases are no stranger to Potash Corp./Saskatchewan (USA) (NYSE:POT), which has now increased its dividend four times since the beginning of 2012. These aren’t token increases, either: the company’s new $0.35 quarterly payout is five times greater than the first-quarter 2012 distribution of $0.07 per share. PotashCorp now yields more than 3.2% to investors at recent prices.
Of course, no company can increase its dividend at such high growth rates without growth from underlying fundamentals. Potash Corp./Saskatchewan (USA) (NYSE:POT) succeeds on that front as well, announcing first-quarter earnings that were 13% higher than first-quarter earnings from one year ago.
Last but not least, investors could consider Kinross Gold Corporation (USA) (NYSE:KGC), a $6.6 billion miner of gold and silver. The company recently reported solid first-quarter results in what has been a tough environment for gold pricing. Kinross Gold Corporation (USA) (NYSE:KGC) grew its revenues by more than 5% year over year during the quarter, and rewards its shareholders with a solid 3% dividend yield.
Kinross Gold Corporation (USA) (NYSE:KGC) also grows its dividend at a high rate. Its semi-annual payout is double what it was four years ago.
The Foolish bottom line
Investors may tend to overlook Canadian stocks, usually thinking that there are better alternatives in the United States. That would be a mistake, as Canadian stocks such as the ones presented here are highly profitable and provide their investors with huge dividend growth that is much better than many American stocks can offer.
If you’re an income investor and starved for yield in today’s investing environment of historically low interest rates, you can take meaningful steps to boost your portfolio’s yield with these stocks. Even better, these stocks provide your portfolio inflation protection (and then some) by growing their distributions at huge rates that far exceed current inflation projections. Do yourself a favor and add these stocks to your watch lists.
The article Looking for High Dividend Growth Stocks? Head North originally appeared on Fool.com is written by Robert Ciura.
Robert Ciura has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Robert is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.
Copyright © 1995 – 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.
Looking for High Dividend Growth Stocks? Head North
Robert is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.
Investors tend to pigeon-hole themselves, with a tendency to focus exclusively on stocks domiciled in the United States. Some may be wary of diversifying their equity holdings internationally, due to a slew of geopolitical headline risks that seem to resurface every few months or so.
Fortunately for investors, you don’t need to buy stocks from across the world that you’ve never heard of, nor do you need to take outsized risk in order to diversify internationally. In fact, many highly profitable stocks located in Canada offer investors high dividend growth, and are difficult to ignore in this low-rate investing environment.
Go north and prosper
For the most part, income investors prefer stocks that pay dividend yields that exceed the yield on the broader market, which currently stands at about 2% annualized as measured by the yield on the S&P 500 Index.
Even better are companies that have such high levels of financial success that they can afford to increase their payouts at high rates, meaning investors can compound their wealth even faster over time.
There are many Canadian dividend stocks, with dividend growth rates that should excite income investors. For starters, integrated energy company Suncor Energy (NYSE: SU) has taken huge steps to bump up its shareholder distribution.
The company reported solid fiscal first-quarter results, in which Suncor recorded strong operating earnings of $1.36 billion ($0.90 per common share), compared to $1.31 billion ($0.84 per common share) for the first quarter of 2012. This 7% increase in profitability was realized through a combination of efforts, including record quarterly production of more than 357,000 barrels per day and a 9% decrease in cash operating costs per barrel from their oil sands operations.
Suncor is doing a great job of funneling their operating success through to their shareholders. Along with the company’s first-quarter report, Suncor increased its dividend by a gigantic 54%, to its current yield of 2.5% annualized. Suncor also announced it would repurchase up to an additional $2 billion of its own shares. Clearly, Suncor takes the subject of shareholder rewards very seriously.
Another Canadian company that rewards it shareholders is fertilizer giant PotashCorp (NYSE: POT), which recently announced an impressive 25% increase in its payout. Dividend increases are no stranger to PotashCorp, which has now increased its dividend four times since the beginning of 2012. These aren’t token increases, either: the company’s new $0.35 quarterly payout is five times greater than the first-quarter 2012 distribution of $0.07 per share. PotashCorp now yields more than 3.2% to investors at recent prices.
Of course, no company can increase its dividend at such high growth rates without growth from underlying fundamentals. PotashCorp succeeds on that front as well, announcing first-quarter earnings that were 13% higher than first-quarter earnings from one year ago.
Last but not least, investors could consider Kinross Gold (NYSE: KGC), a $6.6 billion miner of gold and silver. The company recently reported solid first-quarter results in what has been a tough environment for gold pricing. Kinross grew its revenues by more than 5% year over year during the quarter, and rewards its shareholders with a solid 3% dividend yield.
Kinross also grows its dividend at a high rate. Its semi-annual payout is double what it was four years ago.
The Foolish bottom line
Investors may tend to overlook Canadian stocks, usually thinking that there are better alternatives in the United States. That would be a mistake, as Canadian stocks such as the ones presented here are highly profitable and provide their investors with huge dividend growth that is much better than many American stocks can offer.
If you’re an income investor and starved for yield in today’s investing environment of historically low interest rates, you can take meaningful steps to boost your portfolio’s yield with these stocks. Even better, these stocks provide your portfolio inflation protection (and then some) by growing their distributions at huge rates that far exceed current inflation projections. Do yourself a favor and add these stocks to your watch lists.
If you’re an investor who prefers returns to rhetoric, you’ll want to read The Motley Fool’s new free report “5 Dividend Myths… Busted!” In it, you’ll learn which stocks provide premium growth and whether bigger dividends are better. Click here to keep reading.
Robert Ciura has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned.
