Dividend stocks are passive income sources for many investors, including retirees. Canada’s primary stock market is home to many dividend growers. The latest income alert or dividend hike comes from three different sectors.
Financial
This year, on Valentine’s Day, Manulife Financial (TSX:MFC) gifted shareholders with a 9.6% increase to the quarterly common dividend. Current investors enjoy an 8.71% year-to-date gain on top of the 5.09% dividend. If you invest today, the share price is $31.44.
Besides the nine consecutive years of dividend increases, the $56.8 billion insurer and financial services company, on a year-over-year basis, has increased the payout by an average of 9.6% annually five times in the last five years. The quarterly dividends are safe and sustainable, given the 55.9% payout ratio.
In 2023, Manulife’s top-line or insurance service results increased 3.7% year over year to $23.9 billion, while net income reached $5.6 billion compared to the nearly $2 billion net loss in 2022. At year-end, the assets under management and administration are $1.4 trillion.
According to Roy Gori, Manulife’s President and CEO, 2023 was a milestone year in the company’s transformational journey. The iconic insurance company has reshaped its portfolio towards lower risk and higher returns.
Early this month, Manulife closed the largest Universal Life reinsurance transaction in Canada’s insurance industry. It will reinsure the low ROE Canadian Universal Life block with the RGA Life Reinsurance Company of Canada.
Technology
TSX’s technology sector has a few dividend gems, and Enghouse Systems Limited (TSX:ENGH) is one of them. At $30.46 per share, the dividend offer is 3.41% following the 18.2% dividend increase announcement on March 14, 2024. While this tech stock is underperforming year to date (-12.66%), it boasts a 16-year dividend growth streak.
Enghouse overcomes the high-interest-rate operating environment because it is debt-free. Also, in Q1 fiscal 2024, revenue and net income rose 13.2% and 6.5% respectively to $120.5 million and $18.1 million compared to Q1 fiscal 2023.
This $1.7 billion company provides mission-critical vertically focused enterprise software solutions. The customer segments that use Enghouse’s core technologies include contact centres, video communications, virtual healthcare, telecommunications networks, public safety, and the transit market.
Management said the debt-free status is a key advantage. Since Enghouse has no external financial constraints, it is uniquely positioned to pursue opportunities in the software market and expand its product offerings.
Consumer staple
The North West Company (TSX:NWC) has become more attractive to risk-averse investors after the 2.6% dividend hike in April. At $38.66 per share (-0.56% year to date), you can partake in the 4.04% dividend. Notably, this consumer staple stock’s annual dividends per share have increased by 3.2% on a compound annual growth basis over the past 10 years.
This $1.8 billion retailer provides food and everyday products and services to rural and hard-to-reach markets in northern Canada, rural Alaska, the South Pacific and the Caribbean. In 2023, sales and net earnings increased 5.1% and 6.7% respectively to $2.5 billion and $134.3 million versus 2022.
While the dividend increase is modest, NWC’s yield is high compared to that of retail and grocery sector peers. Furthermore, you’re investing in a defensive asset.
Safe and secure passive income
Manulife, Enghouse Systems, and the North West Company are compelling investment options for income-focused investors regardless of the economic environment. The three companies will keep investors whole on the quarterly dividends.
