Recent dividend hikes - Manulife & Kinder Morgan

snoopy dance

As a dividend growth investor, I always jump up and down and giggle like a little girl when I read news about companies raising their dividends. Dividend hike is like music to my ears. Taking McDonald's slogan... I'm loving it! (OK I don't giggle like a little girl but I do get VERY excited).

Dividend hike means that my money is working even harder for me. It also means that the dividend that I am receiving is keeping up with inflation and the real purchasing power is increasing.

This is why I was so excited to hear that Manulife (MFC) is increasing dividend for the first time since 2009. Manulife, the largest life insurer in Canada, has surprised investors by increasing the dividend by 19%! Most investors like myself are expecting a dividend hike in 2015 but certainly not in 2014. The announcement means the company is doing much better than expected. I believe that once the interest rates start going up in the near future, the life insurance sector will be booming!

Manulife is one of the first stocks that I purchased circa 2008, just before the financial crisis. I didn't know much about dividend investing back then so I did not realize that the payout ratio was too high. What the payout ratio hinted came true and Manulife cut the dividend by half in 2009. I won't lie, it has been tough holding Manulife over the last 5 years. Fortunately,I did consider the 3 key questions prior to purchasing MFC shares. I knew I didn't need the money any time soon and I could live with the potential downside. Furthermore I was OK collecting the dividends while waiting for the stock price to recover. I guess my patience has finally paid off. 🙂

Kinder Morgan Inc. (KMI) also announced that it's merging all its master limited partnerships (MLP) to one entity. Personally I didn't really care about this news until I read that KMI will increase its dividend to $2.00 annually per share in 2015. A 16.3% dividend increase! The market took the merger news very well today and KMI stock price jumped as high as $42.49 and closed at $39.37, or an increase of 9%.

A good start to the week for dividend growth investors.

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  • Reply
    August 12, 2014 at 5:42 am

    Always great news when there are dividend increase announcements.

    I dont have any insurance companies in my portfolio and its something that ive been thinking about lately. Might be a good candidate to add.

    Enjoy your raises

  • Reply
    August 12, 2014 at 1:59 pm

    Dividend increases are the gravy every dividend growth investor wants. All this just helps the compounding work that much faster. Thanks for sharing.

    • Reply
      August 12, 2014 at 2:58 pm

      Compounding is a very powerful tool, that's why we're enrolled in DRIP whenever possible. 🙂

  • Reply
    Dividend Family Guy
    August 13, 2014 at 7:50 pm

    I am behind on the much going on in life right now. I will defineltely have to take a peak at KMI now.

  • Reply
    Finance Journey
    August 15, 2014 at 6:07 pm

    Always great to see growing income. I am thinking to add Manulife in my portfolio.

    I could imagine how hard to hold a stock when its drop value by more than 50%, but glad that you didn't sell the MFC at single digit.

    Best wishes,

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