Investors tend to pigeon-hole themselves, with a tendency to focus exclusively on stocks domiciled in the United States. Some may be wary of diversifying their equity holdings internationally, due to a slew of geopolitical headline risks that seem to resurface every few months or so.
Fortunately for investors, you don’t need to buy stocks from across the world that you’ve never heard of, nor do you need to take outsized risk in order to diversify internationally. In fact, many highly profitable stocks located in Canada offer investors high dividend growth, and are difficult to ignore in this low-rate investing environment.
Go north and prosper
For the most part, income investors prefer stocks that pay dividend yields that exceed the yield on the broader market, which currently stands at about 2% annualized as measured by the yield on the S&P 500 Index.
Even better are companies that have such high levels of financial success that they can afford to increase their payouts at high rates, meaning investors can compound their wealth even faster over time.
There are many Canadian dividend stocks, with dividend growth rates that should excite income investors. For starters, integrated energy company Suncor Energy Inc. (USA) (NYSE:SU) has taken huge steps to bump up its shareholder distribution.
The company reported solid fiscal first-quarter results, in which Suncor Energy Inc. (USA) (NYSE:SU) recorded strong operating earnings of $1.36 billion ($0.90 per common share), compared to $1.31 billion ($0.84 per common share) for the first quarter of 2012. This 7% increase in profitability was realized through a combination of efforts, including record quarterly production of more than 357,000 barrels per day and a 9% decrease in cash operating costs per barrel from their oil sands operations.
Suncor Energy Inc. (USA) (NYSE:SU) is doing a great job of funneling their operating success through to their shareholders. Along with the company’s first-quarter report, Suncor Energy Inc. (USA) (NYSE:SU) increased its dividend by a gigantic 54%, to its current yield of 2.5% annualized. Suncor Energy Inc. (USA) (NYSE:SU) also announced it would repurchase up to an additional $2 billion of its own shares. Clearly, Suncor Energy Inc. (USA) (NYSE:SU) takes the subject of shareholder rewards very seriously.
Another Canadian company that rewards it shareholders is fertilizer giant Potash Corp./Saskatchewan (USA) (NYSE:POT), which recently announced an impressive 25% increase in its payout. Dividend increases are no stranger to Potash Corp./Saskatchewan (USA) (NYSE:POT), which has now increased its dividend four times since the beginning of 2012. These aren’t token increases, either: the company’s new $0.35 quarterly payout is five times greater than the first-quarter 2012 distribution of $0.07 per share. PotashCorp now yields more than 3.2% to investors at recent prices.