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When you’re selecting a dividend stock to buy and hold, it’s important to prioritize one that increases its payout. Rising dividend income can help offset the effects of inflation and give you an incentive to hang on for the long term. Dividend payments are never a guarantee but a company which has a manageable payout ratio and strong growth prospects can make for an ideal investment to hold in a tax-free savings account.
One stock which recently boosted its dividend payment significantly is Black Diamond Group (TSX:BDI). The industrial services company, which has operations in multiple countries, including Canada and the United States, released its quarterly results on Oct. 31 and they were strong enough to justify a sizeable 17% increase in its dividend. The new quarterly dividend will be $0.035, up from the $0.03. That means that annually, investors will be collecting a yield of around 1.5%.
Despite experiencing a decline in revenue, the company sees a lot of growth potential on the horizon heading into next year. The company’s revenue has grown significantly over the years from just under $180 million in 2020 to close to $394 million in 2023. And with its payout ratio of 32% being fairly light, the company has plenty of room to continue increasing its dividend for the foreseeable future even if it doesn’t generate a ton more growth.
Year to date, shares of Black Diamond Group are up by 11%. The stock trades at 17 times its estimated future profits and could make for a good long-term investment if you’re looking for a solid dividend stock to buy and hold.
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