FirstService Declares 11% Increase To Quarterly Cash Dividend

Rhea-AI Summary

FirstService Corporation (FSV) has announced an 11% increase in the quarterly cash dividend on its Common Shares, raising it to US$0.25 per share and US$1.00 on an annualized basis. The dividend growth has exceeded 10% annually, reflecting the company's strong free cash flow and growth-focused business model. The dividend is payable on April 5, 2024, to shareholders of record on March 29, 2024.

Financial Analyst

The announcement of FirstService Corporation's dividend increase is a positive signal to shareholders and the market, reflecting the company's confidence in its financial health and future prospects. An 11% increase in the quarterly cash dividend is a substantial increment, especially when considered against the backdrop of the company's history of consistent dividend growth exceeding 10%. This suggests that FirstService is not only maintaining its commitment to returning value to shareholders but is also experiencing a positive cash flow situation that allows for such financial decisions.

From a financial analysis standpoint, the increase to an annualized dividend of US$1.00, up from US$0.90, indicates a strong balance sheet and a business model that generates robust free cash flow. This is critical for investors looking for stable income streams, particularly in volatile market conditions. Additionally, the mention of maintaining financial flexibility and a conservative balance sheet is reassuring, as it suggests that the company is mindful of not overextending its financial resources, which could compromise its long-term financial stability.

Tax Expert

The classification of the dividend as an 'eligible dividend' for Canadian income tax purposes is a significant detail for investors, particularly those who are tax residents of Canada. Eligible dividends are taxed at a lower rate than ordinary income, which can result in tax efficiency and increased after-tax returns for Canadian investors. This distinction may influence investment decisions, particularly for income-focused portfolios. It's important to note that the tax implications can vary for investors based on their residency and tax status and thus, the impact of this announcement may differ across FirstService's shareholder base.

Market Research Analyst

The strategic decision by FirstService to increase its dividend payout is likely a reflection of its competitive positioning within the industry. By signaling strong financial performance and a commitment to shareholder returns, FirstService may potentially strengthen investor perception and attract dividend-seeking investors. In the broader market context, companies that consistently grow their dividends are often viewed as financially stable and reliable, which can be a differentiator in sectors with varying dividend policies.

It would be beneficial to consider industry norms regarding dividend growth rates and payout ratios to fully assess the impact of FirstService's announcement. If the company's dividend growth rate substantially exceeds that of its peers, it could suggest outperformance and a strong market position. Conversely, if the dividend increase is in line with industry trends, it may simply reflect sector-wide financial stability rather than exceptional company-specific performance.

TORONTO, Feb. 05, 2024 (GLOBE NEWSWIRE) -- FirstService Corporation (TSX: FSV; NASDAQ: FSV) ("FirstService") announced today that its Board of Directors has approved an 11% increase in the quarterly cash dividend on the outstanding Common Shares of the Company over the previous US$0.225 per Common Share and declared a quarterly dividend of US$0.25 per Common Share. The dividend is payable on April 5, 2024 to holders of Common Shares of record at the close of business on March 29, 2024.

The Company’s dividend will be US$1.00 on an annualized basis, up from US$0.90 during the past year. This distribution continues our long-term track record of compounded annual dividend growth exceeding 10%. FirstService’s proven growth-focused business model drives strong free cash flow which also allows us to incrementally return capital to shareholders in the form of these dividends while maintaining financial flexibility and a conservative balance sheet.

The dividend on Common Shares is an "eligible dividend" for Canadian income tax purposes.

About FirstService Corporation

FirstService Corporation is a North American leader in the property services sector, serving its customers through two industry-leading service platforms: FirstService Residential – North America's largest manager of residential communities; and FirstService Brands – one of North America's largest providers of essential property services delivered through individually branded franchise systems and company-owned operations.

FirstService generates approximately US$4.3 billion in annual revenues and has approximately 29,000 employees across North America. With significant insider ownership and an experienced management team, FirstService has a long-term track record of creating value and superior returns for shareholders. The Common Shares of FirstService trade on the NASDAQ and the Toronto Stock Exchange under the symbol "FSV" and are included in the S&P/TSX 60 Index. More information is available at www.firstservice.com.

Forward-looking Statements
This press release includes or may include forward-looking statements. Much of this information can be identified by words such as “expect to,” “expected,” “will,” “estimated” or similar expressions suggesting future outcomes or events. FirstService believes the expectations reflected in such forward-looking statements are reasonable but no assurance can be given that these expectations will prove to be correct and such forward-looking statements should not be unduly relied upon. These statements involve known and unknown risks, uncertainties and other factors which may cause the actual results to be materially different from any future results, performance or achievements contemplated in the forward-looking statements. Such factors include: (i) general economic and business conditions, which will, among other things, impact demand for FirstService’s services and the cost of providing services; (ii) the ability of FirstService to implement its business strategy, including FirstService’s ability to acquire suitable acquisition candidates on acceptable terms and successfully integrate newly acquired businesses with its existing businesses; (iii) changes in or the failure to comply with government regulations; and (iv) other factors which are described in FirstService’s annual information form for the year ended December 31, 2022 under the heading “Risk factors” (a copy of which may be obtained at www.sedarplus.ca) and Annual Report on Form 40-F filed with the United States Securities and Exchange Commission (a copy of which may be obtained at www.sec.gov), and subsequent filings (which factors are adopted herein). Forward-looking statements contained in this press release are made as of the date hereof and are subject to change. All forward-looking statements in this press release are qualified by these cautionary statements. Unless otherwise required by applicable securities laws, we do not intend, nor do we undertake any obligation, to update or revise any forward-looking statements contained in this press release to reflect subsequent information, events, results or circumstances or otherwise.

COMPANY CONTACTS:

D. Scott Patterson
Chief Executive Officer
(416) 960-9566

Jeremy Rakusin
Chief Financial Officer
(416) 960-9566

What is the dividend increase announced by FirstService Corporation (FSV)?

FirstService Corporation (FSV) has announced an 11% increase in the quarterly cash dividend on its Common Shares, raising it to US$0.25 per share and US$1.00 on an annualized basis.

When is the dividend payable to FirstService Corporation (FSV) shareholders?

The dividend is payable on April 5, 2024, to shareholders of record on March 29, 2024.

Is the dividend on Common Shares an 'eligible dividend' for Canadian income tax purposes?

Yes, the dividend on Common Shares is an 'eligible dividend' for Canadian income tax purposes.