New markets position their dividends for growth

Article Excerpt

CAE INC. $27 (Toronto symbol CAE; Conservative Growth Payer Portfolio, Manufacturing & Industry sector; Shares o/s: 267.7 million; Market cap: $7.2 billion; Dividend Yield: 1.3%; Dividend Sustainability Rating: Above Average; www.cae.com) is a leading maker of flight simulators for commercial and military aircraft. It also operates pilot-training schools in over 30 countries and makes mannequins and other medical-simulators for training health professionals. CAE last raised its quarterly dividend by 12.5% with the September 2017 payment; its investors now receive $0.09 a share instead of $0.08. The new annual rate of $0.36 yields 1.3%. In its fiscal 2018 fourth quarter, ended March 31, 2018, the company earned $100.1 million, or $0.37 a share. That’s up 50.1% from $66.7 million, or $0.25, a year earlier. Overall revenue rose 6.3%, to $780.7 million from $734.7 million a year earlier. Sales of flight simulators and pilot-training services to airlines (58% of total revenue) rose 9.0% from the previous year, while sales to military clients (37%) improved 2.7%. Both segments generated…