CI Financial Corp. is increasing its monthly dividend by 8.3 per cent to 6.5 cents per share.
It is the third increase since the wealth management firm converted from an income trust to a corporation in January, 2009. At that time, the dividend was pegged at 4 cents per share a month.
The increased dividend will apply for the months of June, July and August, and will be reviewed again.
The move comes after CI Financial reported a 23-per-cent jump in first quarter profit to $74.9-million or 26 cents a share.
"We look at the dividend every quarter," CI Financial chief executive officer Bill Holland told analysts on Tuesday.
"It's a conversation that kind of goes lockstep with share buybacks and debt. Now, we have moved debt to the side and say we don't want to reduce our debt any more. Now it really is, do you buy back shares or increase the dividend?
"For the first four months, we kept buying shares back…Now, the right balance is to have a decent dividend increase."
Undoubtedly, the increased payouts will keep institutional investors happy. Some of them owned CI Financial as an income trust for yield and are getting a good reason to maintain its stock in their portfolios.