Sun Life Financial Inc. hasn’t been very popular with investors craving dividend growth in their portfolios over the past few years, but the Canadian life insurance giant’s decision to increase its payout for the first time since 2008 is a first step to winning them back.
“This quarter’s dividend increase, along with the repurchase of three million common shares reaffirms our expectation that Sun Life will return a greater share of its earnings to common shareholders for the foreseeable future,” said Peter Routledge, analyst at National Bank Financial, in a note to clients. “We expect regular dividend increases every two or three quarters and recurring common share repurchases.”
Sun Life on Tuesday announced that it is raising its quarterly payout by six per cent to 38 cents per share from 36 cents, a level that had remained unchanged since April 2008.
The increase comes after the company easily beat analysts’ earnings estimates.
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