New York, NY — Hardwood lumber distribution doesn’t sound like an exciting business, but a sizable dividend hike from this company should get some attention from income investors.
On Monday, July 18, Hardwoods Distribution Inc (TSE:HWD) announced that it has amended its dividend policy to increase its annual dividend to C$0.25 per share. This represents a 13.6% increase from its current payout of C$0.22 per share. The dividend is expected to first apply to the quarterly payout in October, which is yet to be declared. (Source: “Hardwoods Completes Acquisition of Rugby Architectural Building Products and Confirms 14% Dividend Increase,” Hardwoods Distribution Inc, July 18, 2016.)
Along with the dividend hike, Hardwoods Distribution also announced the completion of the acquisition of Rugby Architectural Building Products. Hardwoods Distribution spent $107 million, plus up to another $13.0 million based on future performance for the company. The acquisition closed on Friday, July 15.
“This is a highly strategic business combination,” said Hardwoods’ president and chief executive officer Robert Brown. “With the completion of the Acquisition, Hardwoods is now North America’s largest distributor of hardwood lumber, panel and interior architectural building materials, with a coast-to-coast US presence and significantly increased access to commercial end-markets.” (Source: Ibid.)