2 Canadian Stocks Offer 30%-Plus Annual Dividend Growth Rates and 4%-Plus Yields
By: Ned Piplovic,
Two Canadian companies, a leading media content company and a connectivity provider, offer 4%-plus dividend yields and more than a decade of rising dividends at average growth rates exceeding 30% per year.
Both companies distribute their dividends monthly and one of the companies produced 13% asset appreciation over the past 12 months. The two companies recently reinforced their mutual commitment to local news by announcing a new funding model, which will provide Global News additional resources for supporting coverage and reporting in Vancouver, Calgary and Edmonton.
Both companies will pay dividends at the end of June to all shareholders of record, as of June 13, 2017.
Corus Entertainment, Inc. (OTCBB:CJREF)
Corus Entertainment Inc., operates television networks, as well as television and radio stations in Canada and internationally. The company’s television segment operates 45 specialty television networks and 15 conventional television stations. Additionally, the television segment produces and distributes films and television programs, licenses merchandise, publishes children’s books and distributes animation software. Some of the company’s network brands include OWN: Oprah Winfrey Network Canada, HGTV Canada, Food Network Canada, History, Showcase, National Geographic, Disney Channel Canada and Nickelodeon Canada. The radio segment operates 39 radio stations that offer news-talk and various genre-specific music programming. Founded In 1998, Corus Entertainment has its headquarters in Toronto, Canada.
The monthly dividend of $0.07 USD – $0.095 CAD – is equivalent to a $0.844 annual dividend distribution and an 8.7% yield. The company started paying a dividend in 2003 and has increased its annual payout by an average rate of 29.4% every year for the past 15 consecutive years.
The share price lost 20% from June to the end of October 2016. However, the price recovered most of those losses by the end of December 2016. Since the beginning of 2017, the price rose 3.6% and is trading just slightly below June 2016 levels.
The share price could still be affected by Corus Entertainment Inc.’s recent $2.65 billion acquisition of Shaw Media Inc. However, the new acquisition doubled Corus Entertainment’s television business, which should give the company the scale it needs to compete in Canada’s media industry.
The continuation of the rising dividends record should not be in any danger as the company identified around $70 million in cost savings due to operational efficiencies and elimination of cost redundancies. Additional savings of approximately $25 million will be realized when certain benefit payments to the Canadian Radio-television and Telecommunications Commission (CRTC) relating to another acquisition are eliminated in 2018.
These savings should generate enough additional free cash flow that will enable Corus Entertainment to pay down its debts and continue its rising-dividend policy.
Shaw Communications, Inc (NYSE:SJR)
Shaw Communications Inc. operates as a diversified communications company in Canada and the United States. The company operates through several business segments to provide consumer and business networks, business infrastructure and wireless services. The Consumer segment provides cable telecommunications services, including video, Internet, Wi-Fi, phone and satellite video services. The Business Network Services segment provides data networking, video, voice and internet services through a national fiber-optic backbone network, as well as satellite video and fleet tracking services. The Business Infrastructure Services segment provides data center colocation, cloud and managed services. The Wireless segment provides wireless voice and data communications services. Founded as Shaw Cable systems Ltd. in 1966, the company changed its name to Shaw Communications Inc. in May 1993 and is based in Calgary, Canada.
The monthly $ 0.09875 dividend in local currency – $0.0731 USD equivalent – converts to a $0.877 USD annual distribution and a 4.1% yield. Over the past 14 years, the annual dividend has risen 88-fold because the company boosted the annual distribution amount by an average growth rate of 37.7% every year.
Over the past year, the share price experienced some minor volatility on its way from just under $19 in June 2016 to $21.34 where it closed on June 7. 2017. The current share price is only about 2% below its 52-week high from late January 2017 and 13.1% above last year’s share price from early June 2016.
The company’s April 2017 second-quarter results indicated a 13.3% total revenue increase, a 7.6% improvement in operating income and a 26.7% net income boost. These results should be a solid foundation for continued asset appreciation and distribution of continually rising dividend income.
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Ned Piplovic is the assistant editor of website content at Eagle Financial Publications. He graduated from Columbia University with a Bachelor’s degree in Economics and Philosophy. Prior to joining Eagle, Ned spent 15 years in corporate operations and financial management. Ned writes for www.DividendInvestor.com and www.StockInvestor.com.