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Toromont Industries Ltd. (TSX:TIH) and Bank of Nova Scotia (TSX:BNS)(NYSE:BNS) just made their shareholders very happy when they announced dividend increases of up to 21.1%. Let’s take a closer look at each company and their new dividends, so you can determine if you should add one of them to your portfolio today.

Toromont Industries Ltd.  

Toromont Industries Ltd. operates through two business segments: The Equipment Group and CIMCO. The Equipment Group is one of Canada’s largest Caterpillar dealerships by revenue and geographic territory, and CIMCO is one of North America’s leading providers of industrial and recreational refrigeration systems.

In its fiscal 2017 fourth-quarter and full-year earnings release on February 22, Toromont announced a 21.1% increase to its quarterly dividend to $0.23 per share, equating to $0.92 per share on an annualized basis, which brings its yield up to about 1.6%.

Foolish investors should make three additional notes about the new dividend.

First, the first quarterly payment at the increased rate will come on April 2 to shareholders of record on March 9.

Second, this dividend hike puts Toromont on track for 2018 to mark the sixth straight year in which it has raised its annual dividend payment.

Third, I think the company’s very strong financial performance, including its 38.5% year-over-year increase in operating cash flow to $261.51 million and its 11.6% year-over-year increase in earnings to $2.22 per share in 2017, will allow it to continue to deliver dividend growth to its shareholders for another six years at least.

Bank of Nova Scotia

Bank of Nova Scotia is the third-largest bank in Canada as measured by assets with approximately $923.15 billion as of January 31.

In its fiscal 2018 first-quarter earnings release on February 27, Bank of Nova Scotia announced a 3.8% increase to its quarterly dividend to $0.82 per share, equating to $3.28 per share on an annualized basis, which brings its yield up to about 4.1%.

It’s important to make three additional notes about the new dividend.

First, the first installment at the increased rate will come on April 26 to shareholders of record at the close of business on April 3.

Second, Bank of Nova Scotia was already on pace for fiscal 2018 to mark the eighth consecutive year in which it has raised its annual dividend payment, and this hike puts in on pace for fiscal 2019 to mark the ninth consecutive year with an increase.

Third, the company has a target dividend-payout range of 40-50% of its adjusted net income attributable to common shareholders, so I think its continually strong growth, including its 18.4% year-over-year increase to $1.87 per share in the first quarter of fiscal 2018, will allow it to continue to grow its dividend in fiscal 2020 and beyond.

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More reading

• Dividend Investors: 3 Cheap Stocks to Buy Today and Hold for Decades
• Latest Results Highlight Why This Bank Should Be in Every Portfolio
• Why Bank of Nova Scotia’s Q1 Results Show Significant Potential
• 2 Top Reasons to Keep Dividend-Growth Stocks in Your TFSA
• It’s Time to Ride Toromont Industries Ltd. to $100

Fool contributor Joseph Solitro has no position in any of the stocks mentioned.

from The Motley Fool Canada http://ift.tt/2FdALnt