By Jitendra Parashar at The Motley Fool Canada
Foolish investors always love to hear dividend hike news from stocks they already own. Usually, increasing dividends also shows that management feels good about the company’s earnings, cash flow, and ability to keep growing. Of course, no dividend is guaranteed, but businesses that raise their payouts year after year tend to have a solid financial base and strong fundamentals behind them.
Two well-known Canadian companies recently gave investors another reason to pay attention. National Bank of Canada (TSX:NA) followed strong banking results with a higher quarterly dividend, while Thomson Reuters (TSX:TRI) extended a dividend-growth streak that now stretches beyond three decades.
Let’s take a closer look at both stocks, their financials supporting these latest dividend increases, and why each could still appeal to long-term income investors.
National Bank stock
National Bank of Canada offers investors a great mix of rising income, strong earnings growth, and expanding operations. The bank mainly provides personal and commercial banking, wealth management, capital markets, and international financial services.
Its shares have gained 60% over the last year and 34% year to date to currently trade at $230.99 apiece, giving the bank a market capitalization of about $88.7 billion. At this market price, it has a 2.3% annualized dividend yield.
That strong share-price performance has been backed by National Bank’s improving results. In the second quarter of its fiscal 2026 (ended in April), the bank’s net income rose 38% year-over-year (YoY) to about $1.2 billion, while its adjusted earnings advanced 13% to $3.23 per share. Growth across its business segments helped drive those gains. Lower provisions for credit losses also played a major role, since its quarterly results a year ago included initial provisions tied to acquired Canadian Western Bank loans.
Similarly, National Bank’s wealth management net income climbed 18% YoY to $274 million, while U.S. specialty finance and international net income rose 10% to $186 million.
Following those strong results, National Bank raised its quarterly dividend by 6% to $1.32 per share. Meanwhile, the bank continues to pursue synergies from its Canadian Western Bank acquisition and plans to expand further through transactions involving selected Laurentian Bank portfolios.
With solid capital levels, growing earnings, and another payout increase, National Bank remains an attractive choice for investors seeking dependable dividend growth.
Thomson Reuters stock
For investors looking beyond the banking sector, Thomson Reuters also offers a healthy combination of recurring revenue, artificial intelligence (AI)-linked growth, and rising dividends.
In short, Thomson Reuters provides software, information, and technology to legal, accounting, compliance, and media professionals. Its shares currently trade at $145.55 per share with a market cap of $63.5 billion. The stock has fallen 20% year to date, while its annualized dividend yield stands at 2.6%.
This weakness in TRI stock contrasts with the underlying strength in the company’s operating results. Its first-quarter revenue rose 10% YoY to US$2.1 billion, helped by a 10% rise in recurring revenue and 15% growth in transaction revenue. Meanwhile, its organic revenue grew 8%, while the legal professionals, corporates, and tax, audit, and accounting professionals segments delivered combined organic growth of 9%.
The company’s adjusted earnings also climbed 10% YoY in the latest quarter to US$1.23, and free cash flow jumped 19% to US$332 million. Demand for many of its products, such as Westlaw, CoCounsel, Practical Law, Pagero, and Confirmation, supported growth across its core businesses.
Encouraged by these results, Thomson Reuters raised its annualized dividend by 10% to US$2.62. That marked its 33rd consecutive year of dividend increases and its fifth straight 10% hike. Moreover, the company is continuing to invest in AI, including its acquisition of Noetica.
Its long dividend-growth record, healthy recurring revenue, and continued investment in AI-powered professional tools make Thomson Reuters an appealing stock for long-term investors.
The post 2 Great Canadian Stocks That Just Raised Their Payouts Again appeared first on The Motley Fool Canada.
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Fool contributor Jitendra Parashar has no position in any of the stocks mentioned. The Motley Fool recommends Thomson Reuters. The Motley Fool has a disclosure policy.
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