Isnt the financial sector supposed to be in dire straits? Maybe they are, but the latest Market Insightpublication from AIC Funds says 76% of their largest 25 financial stocks raised dividends in the past year, 20% had no change, and 4% had a decrease.
Dividends are an important measure of financial strength. Theyre an indication that a company is financially sound and is looking ahead with a positive view to the future, notes the report. If so many are raising their dividends, are things all that bad at least in Canada (where AIC Fund is based)?
Investors have lumped all financials both good and poor performers together under the same category, and have generally stayed away, adds the commentary. During this time, its important to remember that each financial company is different and should be evaluated individually on its own merits.
Solid core financials entering times of market or economic crisis often emerge stronger in the end, obtaining increased market share from weaker performers who fall by the wayside. AIC Funds list of dividend-raising financials might then be a screen of sorts for the latter kind of companies, so lets offer it here.
Dividends were raised at: Bank of New York Mellon Corp., Bank of Nova Scotia, HSBC Holdings, JPMorgan Chase & Co., Lloyds TSB Group, National Bank of Canada, Royal Bank of Canada, Toronto Dominion Bank, American International Group, AGF Management Ltd., CNP/NPM, IGM Financial Inc., Invesco Limited, Investor AB, Power Corporation of Canada, Great-West Lifeco Inc., Manulife Financial Corporation, Power Financial Corp., Sun Life Financial Inc.
Those holding the line on dividends were: CI Financial, Barclays PLC, Royal Bank of Scotland Group plc, Dundee Corporation, Merrill Lynch & Co. Inc. One company cut: The Wharf (Holdings) Limited.