Cash-rich Canadian companies embrace dividend strategy
* Dividend hikes prevalent across the business spectrum
* Companies seek to boost their share prices
* Economic outlook makes payouts preferable to investing
* Trend seen continuing as cash stays on sidelines
By Andrea Hopkins
TORONTO, Feb 28 (Reuters) - Canadian companies of nearly every stripe have announced big dividend increases this year, aiming to dole out mountains of cash on a bet that shareholders prefer sweeter payouts to their throwing money at investments in an uncertain economy.
Bank of Montreal - Canada's No. 4 lender and the first of the big five banks out of the gate this year with quarterly financial results - set the tone for the lenders early this week with a surprise dividend increase.
But in the days before that, a swath of Canada's biggest names had already jumped on the dividend bandwagon. In telecoms, BCE Inc and Rogers Communications Inc raised payouts; in pipelines, TransCanada Corp and Enbridge Inc, and in retailing, Metro Inc and Tim Hortons Inc.
A host of others - Magna International Inc, Suncor Energy Inc and Telus Corp, to name three - are likely to raise their payouts or dividend targets or both sometime this year. Continued...