I had to fly to Nova Scotia in early September for a family emergency. I was lucky to have witnessed my first hurricane while I was there and learned how much I take electricity for granted. When the power first went out, I wasn't very worried. When we learned the water pump wasn't working, then the panic set in. I'll never forget fighting gale force winds to collect some lake water in an antique jug just to flush the toilet. It took two days to get the power back on because we were in such a remote location, but eventually Emera fixed the problem. While there was no power, I might have thought poorly of Emera a few times but I got over it.
Later that month, the board of directors of Emera increased the dividend by a whopping 15% and now all is forgiven!
"We have committed to grow our common dividend as our earnings increase," said Chris Huskilson, President and Chief Executive Officer of Emera Inc. "This 17 cent annual increase in our common dividend reflects the continuing success of our strategy. We know our dividend is important to our shareholders, and we are pleased to be able to provide for this 15% increase."
Emera was paying a dividend of $1.112 per share, but after the increase, the dividend will be $1.30 per share. This is exactly what I am after in my dividend growth strategy. If the dividends keep growing every year, then my return on my investment will rise accordingly. I bought Emera back in February at $23.90 per share and my yield was 4.65% , and now after the dividend increase the shares are up to $30.35 and my yield is now is 5.44%. My total return on my Emera investment right now is 27% which is pretty darn good, but since markets always fluctuate, I don't really focus on that figure.When was the last time you saw a mutual fund promise to pay you an increasing return each year? I'll be ready to buy more shares of Emera after the market corrects, that's for sure!
Just imagine if all of the stocks I own increase their dividend each year; I'll be one happy camper who can retire early. Until then, I'll be thinking about my retirement one dividend at a time. Have a great weekend.
6 comments:
They also have a 5% discount on DRIP! I don't have them yet but they are on my list. Maybe my future TFSA contribution ...
Great Stuff, I am also a big fan of ever increasing dividends. That's why I align myself with long term strategic companies. Some that have paid a dividend consistently like clockwork for over 132 years. THe medium might be different but the idea similar.
Keep it up!
www.richardcanfield.ca
Passive: I highly recommend buying some shares. Emera is a great company.
Rich: Thanks man! We'll have to go for a beer sometime and catch up.
Good stuff indeed. I'm going to try and buy some EMA when the price dips in the future!
Quote from Robert Kwan of RBC Capital Markets:
Following Emera’s surprise 15% dividend increase, we expect Enbridge to follow with an 18% increase that could be announced with 2011 guidance in early December 2010. We also believe that Fortis could modestly surprise on the upside (we forecast a 7% increase) with an announcement of an increase possibly by the end of the year (and if not then, in Q1/11). The following are expected to deliver their regular annual dividend increases: ATCO, Canadian Utilities and TransCanada (all likely in Q1/11). Although likely to occur later in 2011, we expect AltaGas and Keyera to announce a dividend increase, with an outside chance that Inter Pipeline will do the same.
The sector is not cheap, but we’re far from hitting new highs. Most valuations in the sector are in the upper half of their respective 10-year ranges. However, none of the stocks is trading at all-time highs and, in fact, most are not even close.
Hey TD, thanks for the update. I wish I had a time machine to go back 10 years and start dividend investing in my early 20's... oh well.
P.S. I miss your blog; it was full of so much info! Keep in touch, man!
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