The dry spell in bank dividends in Canada is officially over. Although Laurentian had raised its dividend shortly after the worst of the crisis was over, it’s not usually considered one of the Big 5 or even Big 6, the members of which are heavily owned by a majority of Canadians through pension plans, RRSPs and personal investments.
TD (TD Bank Financial Group) (TSX: TD) was the first to reinstate a dividend hike – bringing the quarterly amount up to 66 cents from 61 cents. The new dividend was paid on April 30, 2011.
But now the Bank of Nova Scotia (TSX: BNS) quickly followed suit, pushing its quarterly dividend up to 52 cents from the 49 previously. This hike was also for the second quarter of 2011 and was paid on April 27th.
BMO (TSX: BMO), CIBC (TSX: CM) and Royal (TSX: RY) have not yet declared dividend increases, but they are expected to before the end of the year. Interestingly, Bank of Montreal is the longest consistent dividend-paying corporation in Canada. Then there is BCE (TSX: BCE) – not a bank, but it sure is acting like one if you take a look at its dividend history. BCE has raised its dividend SIX times since the 2008 crash. It would be difficult to find anyone who hasn’t made their money back in spades on that investment.
With the recent news that the Bank of Canada will not be hiking its own rates at least until September 2011, these hikes are welcome in what is still a fairly low-yield environment (checked your Money Market funds lately?).
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