Canadian Dividend All-Stars Review

Posted on May 5, 2021 by Mathieu Litalien
canadian dividend stocks

It was a quiet month for Canadian dividend stocks. That is about to change as the pace of dividend growth is about to ramp up in a big way this month. This week, there are four Canadian Dividend All-Stars on top to raise dividends.

But before we get into that, let's dig into the action from last week. Of note, all figures are in Canadian dollars unless otherwise noted.

Recent dividend updates

Last week unfolded as expected as Imperial Oil (TSX:IMO) announced its annual dividend raise. 



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Actual DGR

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After keeping the dividend steady last year, Imperial Oil rewarded investors with a big dividend raise last week. Friday's announcement for a 22.7% dividend raise to the quarterly dividend was much higher than my expectations.

It is also an indication of the company's confidence in the environment for oil. In the first quarter it generated more than $1B in free cash flow. The cyclicality of the oil industry leads to considerable swings in cash flows and at today's oil prices, Imperial is in a strong position.

Upcoming dividend raises, cuts or suspensions

Loblaw (TSX:L)

Current Streak: 9 years

Current Yield: 1.91%

Earnings: Wednesday, May 5

Loblaw (TSX:L) 5 year total return

Loblaw stock

What can investors expect: Will they or won’t they? We will be playing that guessing game many times over the next few months. Historically, Loblaw has announced its annual dividend raise along with first quarter results.

Last year however, Loblaw (TSX:L) kept the dividend steady and only raised in November. Assuming a return to normal, investors could expect a dividend raise announcement this coming week.  

Over the course of Loblaw’s streak, the grocer has averaged mid, single-digit dividend growth. All things considered, I’d expect much of the same this time around.


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Franco Nevada (TSX:FNV)

Current Streak: 13 years

Current Yield: 0.96%

Earnings: Wednesday, May 5

Franco Nevada (TSX:FNV) 5 year total return

Franco nevada stock

What can investors expect: When it comes to reliability in the mining industry, there is none more reliable than Franco Nevada (TSX:FNV). It was one of the few companies that raised dividends in the middle of the pandemic and owns the longest dividend growth streak among all TSX-listed mining companies.

Like clockwork, Franco Nevada announces its annual raise along with first-quarter results. Of note, Franco-Nevada is dual-listed and pays out its dividend in U.S. dollars.

Since 2015, the company's annual raise has been exactly a penny per share. Not surprisingly, this has led to a declining growth rate. Last year’s 4% raise was the lowest on record during the current streak.

While Franco Nevada is a leading gold streaming company, it also has energy assets that negatively impacted results last year. Given the strong price of gold, and oil’s rebound from pandemic lows, now might be the perfect opportunity to break that declining streak.

I say ‘might’ but the company already telegraphed its raise at FNV's Investor Day a few weeks ago. The company expects to raise the divided by 15% to USD$0.30 per share. If you read the fine print, you’ll see that it will be formally declared in May.

Easiest prediction I’ve ever made!


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Algonquin Power (TSX:AQN)

Current Streak: 10 years

Current Yield: 4.11%

Earnings: Thursday, May 6

Algonquin Power (TSX:AQN) 5 year total return

algonquin power stock

What can investors expect: Algonquin (TSX:AQN) was also one of the rare All-Stars to raise dividends during last year’s pandemic. This leading utility typically raises the dividend along with first quarter results in early May. Of note, Algonquin is also dual-listed and pays out the dividend in U.S. dollars.

What I appreciate about a company like Algonquin, it has a clear and publicly stated dividend policy. The company has a targeted payout ration between 80-90% of adjusted net earnings.

According to its Investor Day in December, this should support another 10% dividend increase in 2021 which is inline with the company’s historical average.


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Hydro One (TSX:H)

Current Streak: 5 years

Current Yield: 3.45%

Earnings: Friday, May 7

Hydro One (TSX:H) 5 year total return

hydro one stock

What can investors expect: Staying in the utility space, Hydro One (TSX:H) is one of the newest All-Stars. Since listing on the TSX Index back in 2016, Hydro One has displayed a commitment to growing the dividend. The announcement always comes along with first quarter results.

How much can investors expect? Last year’s 5.01% raise was right inline with each of the previous four raises and as such, there is no reason to expect any different. It also happens to be inline with the company’s the 5% CAGR in projected earnings and cash flow growth through 2024.

Mid, single-digit growth is all but a guarantee.


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*Mat Litalien is long Algonquin Power.

Disclaimer: The writer of this article or employees of Stocktrades Ltd may have positions in securities listed in this article. Stocktrades Ltd may also be compensated via affiliate links in this post. Stocktrades Ltd will run advertisements on our posts. These advertisements do not represent an endorsement by us.

Mathieu Litalien

About the author

Mathieu is an individual investor and has been investing part-time for the better part of the past 20 years. He is primarily interested in fundamental analysis, focusing on the long-term and his portfolio is composed primarily of dividend-paying equities. Mathieu has a moderate risk profile and also looks for growth and value. His passion for finance and the markets have led him to his MBA and writing for Seeking Alpha and Stocktrades. Mathieu also focuses primarily on stock research and content production for Premium and the Stocktrades blog.