Listed here are three dividend shares that raised their dividends this month. From their dividends alone, long-term buyers could make steady returns, no matter what their inventory costs do.

A cyclical dividend inventory with large upside potential

Magna Worldwide (TSX:MG) is a big world provider of auto components that’s concerned within the designing and manufacturing course of. It has about 343 manufacturing operations and 88 product growth, engineering, and gross sales centres that span 29 international locations.

Administration has demonstrated its dedication to its dividend, which it has elevated for 13 consecutive years. Nonetheless, buyers ought to observe that the corporate’s earnings are cyclical. For instance, from the 2020 pandemic 12 months to 2021, it doubled its web earnings. However final 12 months, it misplaced 60% of its earnings 12 months over 12 months. These large ups and downs of its income make the inventory risky and unpredictable. Due to this fact, it tends to keep up a low payout ratio by means of financial cycles to supply a giant buffer for when there are large cuts in its earnings.

It simply raised its dividend by 2.2% this month. Its payout ratio is estimated to be about 40% of earnings this 12 months. At $73.69 per share at writing, it presents a secure yield of about 3.4%. Mixed with potential capital positive aspects, the dividend inventory can probably ship annualized returns of roughly 17% over the following few years.

goeasy inventory

goeasy (TSX:GSY) is a number one non-prime Canadian client lender that has made long-term buyers tremendous rich. For instance, within the final decade, the dividend inventory’s complete return was about 29% per 12 months — nearly a 13-bagger!

Over time, it has expanded its choices such that its client mortgage portfolio consists of unsecured lending, house fairness loans, point-of-sale lending, and automotive financing. One has to marvel the place its subsequent leg of progress may come from.

A Bloomberg article from a 12 months in the past advised that the corporate may very well be exploring worldwide merger and acquisition alternatives in the US and the UK. Regardless, goeasy appears dedicated to rising its dividend. It simply raised its dividend by 5.5% this month and at the moment presents a yield of three.1%, which isn’t dangerous for its progress prospects.

Manulife inventory

Life and medical health insurance firm Manulife (TSX:MFC) simply raised its widespread inventory dividend by 10.6% this month. This very good hike pushed its dividend yield to five.5%, which ought to function a strong basis for complete returns.

At $26.63 per share at writing, the worth inventory trades at an inexpensive price-to-earnings ratio of about 8.5. It additionally trades at near its e-book worth of about $26.49 per share. It means that the market could have low expectations of the inventory. So, it may very well be an excellent alternative for buyers in search of juicy earnings. Its payout ratio is estimated to be sustainable at roughly 44% of earnings this 12 months.

Investor takeaway

Shares which can be in a position to improve their dividends healthily over time usually develop into extra helpful over time. Should you purchase them at good valuations, you possibly can get respectable returns. All three dividend shares launched pay eligible dividends which can be favourably taxed in non-registered accounts. That’s, you’d pay decrease taxes on them versus your job’s earnings.