Hammond Power Declares CAD 0.275 Dividend, Payout Ratio Hits 21%
6h ago|4 min readStandard
Fazen Markets Editorial Desk
Collective editorial team · methodology
dividendhammond-power-solutions
Fazen Markets Editorial Desk
Collective editorial team · methodology
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Hammond Power Solutions Inc. announced a quarterly cash dividend of CAD 0.275 per common share on 29 May 2026. The declaration follows the company's record first-quarter revenue of CAD 205.5 million, reported earlier in May. This dividend represents a 10% increase from the CAD 0.25 per share paid in the prior quarter, signaling confidence in sustained cash flow generation. The payment is scheduled for shareholders of record as of 20 June 2026, with distribution on 28 June 2026, according to the announcement.
Hammond Power Solutions last increased its dividend in February 2026, raising it from CAD 0.20 to CAD 0.25 per share. The company initiated its dividend program in 2023 with a payment of CAD 0.15 per share, making this the fourth increase in three years. The current macro backdrop for industrial manufacturers is characterized by elevated demand for North American electrical infrastructure, driven by reshoring initiatives and data center construction.
The immediate catalyst for the dividend declaration is the company's strong Q1 2026 financial performance. Sales grew 22.4% year-over-year to CAD 205.5 million, while net income reached CAD 22.5 million. This strong earnings report provided the board with the clarity and cash reserves needed to approve a more aggressive shareholder return. The decision also precedes the annual shareholder meeting, aligning capital allocation with demonstrated operational strength.
The CAD 0.275 per share dividend translates to an annualized payout of CAD 1.10 per share. Based on Hammond Power's closing share price of CAD 105.25 on 28 May 2026, the forward dividend yield is approximately 1.04%. The company's payout ratio, using its Q1 2026 annualized net income of CAD 90 million, stands at a conservative 21%. This ratio is below the industrial sector median of approximately 35%.
| Metric | Q1 2026 | Q1 2025 | Change |
|---|---|---|---|
| Revenue | CAD 205.5M | CAD 167.9M | +22.4% |
| Net Income | CAD 22.5M | CAD 18.1M | +24.3% |
| Dividend/Share | CAD 0.275 | CAD 0.20 | +37.5% |
Hammond Power's market capitalization is approximately CAD 1.26 billion. The dividend increase outpaces the TSX Composite Index's year-to-date total return of +4.2%. Peer company Hubbell Incorporated currently yields 1.2%, while ABB Ltd yields 2.1%. Hammond's lower yield reflects its higher growth profile and more recent initiation of a formal dividend policy.
The dividend increase signals a maturation of Hammond Power's business model, shifting from pure reinvestment to a balanced return of capital. This is bullish for income-focused funds that mandate holdings in dividend-paying industrial stocks. Direct beneficiaries include exchange-traded funds like the iShares S&P/TSX Canadian Dividend Aristocrats Index ETF (CDZ), which may see increased eligibility or weighting for Hammond Power.
A key risk is the cyclical nature of the industrial electrical equipment sector. A downturn in commercial construction or manufacturing capex could pressure earnings and make the new dividend level less sustainable despite the low payout ratio. The company's significant exposure to the volatile copper market, a primary raw material, presents a persistent margin risk. Institutional positioning data shows net inflows into Canadian industrial ETFs over the last quarter, with specific interest in companies demonstrating both growth and shareholder returns.
The next major catalyst is Hammond Power Solutions' Q2 2026 earnings report, scheduled for release on 31 July 2026. Analysts will scrutinize order backlog, which stood at CAD 187 million at the end of Q1, for signs of demand sustainability. The company's annual general meeting on 15 July 2026 may provide further commentary on long-term capital allocation strategy beyond dividends.
Key levels to watch include the stock's 50-day moving average at CAD 102.50, which has acted as dynamic support. A sustained break above the CAD 110 resistance level, last tested in April 2026, would confirm bullish momentum post-announcement. Monitoring the Chicago PMI and U.S. industrial production reports for June and July will provide context for sector-wide health. The Bank of Canada's next interest rate decision on 16 July 2026 could influence the discount rate applied to future dividend streams.
The ex-dividend date is typically one business day before the record date. With a record date of 20 June 2026, the ex-dividend date is expected to be 19 June 2026. Investors must purchase shares on or before 18 June 2026 to be eligible for this dividend payment. This timeline is standard for TSX-listed companies and aligns with the T+2 settlement cycle.
Hammond Power's dividend appears secure based on its 21% payout ratio. This is significantly lower than peers like WSP Global, which has a payout ratio near 40%, or Stantec at approximately 35%. The company's debt-to-EBITDA ratio of 0.8x provides ample balance sheet flexibility to maintain the dividend through a moderate downturn, unlike more leveraged competitors in the sector.
Hammond Power Solutions does not currently offer a dividend reinvestment plan (DRIP). Shareholders receive cash dividends directly. The absence of a DRIP is common for mid-cap growth-oriented industrials, as it allows the shareholder base to decide on reinvestment. The company's focus has been on organic growth and strategic acquisitions, with the dividend program representing a newer component of its capital return framework.
The dividend hike reflects operational success and a strategic commitment to shareholder returns, but sustainability hinges on continued industrial capex growth.
Disclaimer: This article is for informational purposes only and does not constitute investment advice. CFD trading carries high risk of capital loss.
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