Cervus Equipment (TSX:CERV) and Rocky Mountain Dealerships (TSX:RME), western Canada’s largest farm equipment dealers are electing to pay a dividend to shareholders. Both dealership groups are headquartered in Calgary, Alb.

Cervus Equipment, John Deere’s largest dealership group in Prairie Provinces, reports that the Cervus Board of Directors has approved a cash dividend to Cervus shareholders of $0.015 per share for the third quarter of 2020. Payment will be made on or about October 15, 2020 to shareholders of record as of the close of business on Sept. 30, 2020.

On June 10, 2020, the company announced the intention to reallocate the mix of shareholder distributions between cash dividends and share repurchases under the company’s Normal Course Issuer Bid. At that time, cash dividends were reduced from the previous quarterly $0.11 per share to the current quarterly $0.015 per share and reallocated to share repurchases. Subsequent to this announcement, Cervus has repurchased 286,360 shares at a total cost of $2.1 million and an average cost of $7.33 per share. 

Rocky Mountain Dealerships, Canada's largest Case IH agriculture equipment dealer, said that on Sept. 10, 2020, its Board of Directors declared a quarterly dividend of $0.015 per common share on RME’s outstanding common shares. The common share dividend is payable on Sept. 30, 2020, to shareholders of record at the close of business on Sept. 21, 2020. Based on the Sep. 10, 2020 closing price of $5.60 for RME's common shares, the current annual dividend reflects a yield of 1.1%.

This dividend is designated by RME to be an “eligible dividend” for the purposes of the Income Tax Act (Canada) and any similar provincial or territorial legislation. An enhanced dividend tax credit applies to “eligible dividends” paid to Canadian residents.

Both companies cautioned shareholders that that quarterly dividends are subject to approval from the each company’s Board of Directors and may be increased, decreased or suspended by the Board at any time.