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Canadian banks set for earnings decline but investors optimistic about recovery


InvestorPlace

10 Dividend Stocks Increasing Their Payouts

There are two types of dividend stocks: those that increase their annual dividend payments year after year, often referred to as Dividend Aristocrats, and those that grow their annual dividends by double-digit percentages every year. In early January, Rob Carrick, one of Canada’s best personal finance columnists, wrote an article about dividend stocks that doubled their payouts over the past 10 years. With an assist from Tom Connolly of DividendGrowth.ca, they’ve put together a list of stocks that have delivered 10-year annualized dividend growth of 7.2%. InvestorPlace – Stock Market News, Stock Advice & Trading Tips Why 7.2%? That’s the amount of growth you’d need based on the Rule of 72 — 72 divided by 7.2% equals 10– the number of years growth required to double a company’s dividend payout. Now the names on the list, while excellent businesses, are mostly traded exclusively on the Toronto Stock Exchange. Thus, some of them are only available over-the-counter, through a broker that has access to the TSX, or not at all. Of the 15, eight trade on a U.S. exchange. I’d check them out. Masco (NYSE:MAS) Rollins (NYSE:ROL) Moelis & Company (NYSE:MC) Tractor Supply (NASDAQ:TSCO) Victory Capital (NASDAQ:VCTR) GlaxoSmithKline (NYSE:GSK) T. Rowe Price (NASDAQ:TROW) S&P Global (NYSE:SPGI) Open Text (NASDAQ:OTEX) FirstService (NASDAQ:FSV) 7 Overvalued Stocks Investors Just Don’t Get Tired Of In the meantime, here are 10 dividend stocks that are likely to do the same. Dividend Stocks to Buy: Masco (MAS) Source: Africa Studio / Shutterstock.com Business has been good for the global leader in home improvement and building products whose brands include Behr Paint, Delta faucets, and Endless Pools. On Feb. 9, the Michigan-based company announced that it was increasing its annual dividend by 68% from 56 cents to 94 cents, starting with the Q2 2021 payment. Also, the company announced a new $2 billion share repurchase program effective immediately. “The anticipated dividend increase we’ve announced today, along with the new $2B share repurchase authorization, underscores our strong financial position and the Board’s confidence in our future,” stated Chief Executive Officer Keith Allman. In recent years, Masco has ridden the home improvement boom to deliver a five-year annualized total return of 17.3% through Feb. 12. With a trailing 12-month (TTM) free cash flow (FCF) of $840 million, it has an FCF yield of 5.3% based on an enterprise value of $15.8 billion. Rollins (ROL) Source: Shutterstock I’ve always liked Rollins, one of the world’s largest providers of pest control services. In May 2016, I included ROL in a group of 10 top stocks that ought to be in every retirement portfolio. It’s up 224% since then, and that doesn’t even include the dividends. “Over the long haul, it hasn’t disappointed delivering 18 consecutive years of earnings growth and 14 consecutive years of dividend increases averaging 12%,” I wrote on May 18, 2016. In fiscal 2020, Rollins increased sales and earnings by 7.2% and 13.3%, respectively. Accounting for the 3-for-2 split on Dec. 10, 2020, Rollins’ board announced on Jan. 26 that it would increase its quarterly dividend by 50% over Q4 2020 to 8 cents starting with its February 2021 payment. The company paid out $161 million in dividends in 2020, up from $154 million in 2019. The company repurchases very little of its stock. Between 2017 and 2019, it repurchased just $28 million of its shares, opting to use most of its free cash for dividends and acquisitions. Rollins has a trailing 12-month free cash flow (FCF) of $380 million. That works out to an FCF yield of 2% based on an enterprise value of $18.8 billion. It’s not cheap at current prices, but it will deliver an above-average total return [dividend income plus capital appreciation] over time. 7 Blue-Chip Stocks That Aren’t a Gamble Definitely buy this one on the dips. Moelis & Company (MC) Source: PopTika/ShutterStock.com Moelis & Company is an independent investment bank based in New York City that went public in April 2014 at $25 a share. If you bought some of its initial public offering (IPO) and still hold it today, you’re sitting on a 119% return. There is no question the investment bank has had its ups and downs. In June 2018, it flirted with $70 before falling gradually to its 52-week low of $22.11 during the March 2020 correction. On Feb. 10, 2021, the company reported record Q4 2020 revenues of $422 million, up 89% from a year earlier. On the bottom line, its adjusted net income was $146 million, up considerably from $26 million in Q4 2019. In 2020, the company paid out dividends and executed share repurchases totaling almost $275…



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