Earnings season is the most popular time for companies to raise their dividends, and this season has been another highly active time. Let’s take a closer look at two companies that raised their dividends by more than 5% last week, so you can stay informed and decide if you should buy one of them today.
Boralex Inc.
Boralex Inc. (TSX:BLX) is one of the world’s largest owners, operators, and developers of renewable power-generation facilities. Its portfolio consists of over 60 wind, hydroelectric, thermal, and solar power-generation facilities located across Canada, France, and the United States.
On February 1, Boralex announced a 7.1% increase to its quarterly dividend to $0.15 per share, representing $0.60 per share on an annualized basis, and this brings its yield up to about 3% at today’s levels. The first quarterly installment at this increased rate is payable on March 15 to shareholders of record at the close of business on February 28.
Investors should also make the following two notes about Boralex’s dividend.
First, the 7.1% hike it just announced has it positioned for 2017 to mark the second consecutive year in which it has raised its annual dividend payment.
Second, I think its strong financial performance, including its 23.4% year-over-year increase in operating cash flow to an adjusted $107.85 million in its nine-month period ended on September 30, 2016, and its ongoing expansion efforts that will help fuel future growth, including its $232.4 million acquisition of Niagara Region Wind Farm that closed last month, will allow its streak of annual dividend increases to continue in 2018 and beyond.
Brookfield Property Partners LP
Brookfield Property Partners LP (TSX:BPY.UN)(NYSE:BPY) is one of the world’s largest commercial real estate companies with approximately US$65 billion in total assets. Its portfolio includes over 140 office properties and more than 120 retail malls as well as multifamily, triple net lease, industrial, hospitality, self-storage, and student-housing assets, which are located across more than 30 countries around the globe.
In its fourth-quarter earnings release on February 3, Brookfield announced a 5.4% increase to its quarterly distribution to US$0.295 per unit, representing US$1.18 per unit on an annualized basis, and this brings its yield up to about 5.15% today. The first quarterly payment at this increased rate will come on March 31 to unitholders of record at the close of business on February 28.
Investors must also make the following two notes about Brookfield’s dividend.
First, it has raised its annual dividend payment each of the last two years, and the hike it just announced has it on pace for 2017 to mark the third consecutive year with an increase.
Second, the company has a long-term distribution-growth target of 5-8% annually, so I think its consistently strong growth of funds from operations, including its 6.3% year-over-year increase to US$1.18 per unit in 2015 and its 15.3% year-over-year increase to US$1.36 per unit in 2016, will allow it to achieve this growth target through 2025 at the very least.
Which is the better buy right now?
I think both Boralex and Brookfield Property Partners represent attractive long-term investment opportunities, but if I had to choose just one to invest in today, I’d go with Brookfield, because it has a much higher yield and a defined long-term distribution-growth target.
