Dividend Dynasty Stocks CIBC ‘s head of portfolio strategy Ian de Verteuil took an in-depth look at Canadian dividend stocks, with very bullish results,
“Dividends have typically made up one quarter to one third of annual equity returns, though they have been dwarfed by price returns in recent years … The ‘quality’ of S&P/TSX dividends has improved meaningfully. Today, over 70% of total dividends are from more stable sectors compared to 54% in the early 1990s. Furthermore, the yield advantage of Canadian equities over U.S. equities is the largest it has been in over three decades. This argues for Canadian equities over U.S. equities … Today, roughly one third of S&P/TSX members have a five-year track record of consistent dividend increases compared to 20% in the early 2000s. Furthermore, Financials, Utilities, Telecoms and Pipelines (which have a better track record of maintaining dividends) today represent a high proportion of all index dividends … It is … useful to consider the specific securities which we can only describe as “Dividend Dynasties.” These companies have had more than 10 dividend increases, and have not cut their dividend, over the past decade. By and large, the stocks have produced strong compounded growth in dividends.”
The list of Dividend Dynasty’ stocks is ranked by the ten-year compound average growth rate in dividend payouts.
The top 20 on the list (in order) are Restaurant Brands International Inc., Brookfield Asset Management Inc., Enghouse Systems Ltd., Enbridge Inc., CCL Industries Inc., Canadian Natural Resources Ltd., Magna International Inc., Franco-Nevada Corp., Canadian National Railway Co., Metro Inc., Canadian Tire Corp. Ltd., Waste Connections Inc., Cogeco Communications Inc., Equitable Group Inc., ATCO Ltd., Brookfield Infrastructure Partners LP, Algonquin Power and Utilities Corp., Canadian Western Bank, Toronto-Dominion Bank and Brookfield Renewable Partners LP.