This Top TSX Stock Just Hiked Its Dividend by 14%

Many companies are cutting or suspending dividend payments as a result of the COVID-19 pandemic.

And that’s why it’s very noticeable when a company not only continues making its dividend payments but also increases them. That’s what Canadian Pacific Railway Limited (TSX:CP)(NYSE:CP) did earlier this month.

On July 21, the Calgary-based railway operator announced that it would be increasing its dividend payments, from $0.83 every quarter to $0.95. That’s an increase of over 14%.

Canadian Pacific’s dividend has come a long way in just a few years. Back in 2017, its quarterly payouts were $0.5625 and they’ve risen by an incredible 69% since then.

With the increase, investors are now earning a dividend yield of about 1% per year. It’s by no means astronomical but it’s a great way to pad your overall returns if you own shares of the company.

Canadian Pacific’s stock is up 11% since the beginning of the year and it’s a great way to invest in the Canadian economy. If the economy’s doing well, then there will be plenty of goods and raw materials transported across the country via railways.

Canadian Pacific released its second-quarter results on July 22 and while revenue declined by 9% year over year, the company still reported a strong profit of $635 million, which was down 12% from the prior-year period.

However, given that this was for the three-month period ending June 30, it’s not a bad result given how many challenges the economy’s faced since the outbreak of the coronavirus.