Canadian Dividend All-Stars – Week of Aug 3

Posted on August 4, 2021 by Mathieu Litalien

Earnings season is starting to ramp up and that means we are going to see more dividend growth announcements in the coming weeks. This week, there are three Canadian dividend stocks All-Stars which are on tap to raise dividends.

Before we take a look at that, let’s recap the action from last week.

Of note, all figures are in Canadian dollars unless otherwise noted.

Recent dividend updates

Last week unfolded as expected. There were no surprises as the lone All-Star scheduled to raise - Capital Power (TSE:CPX) – came through for investors.

Company

EST DGR

EST Increase

Actual DGR

Actual Increase

New Div

CPX

~7%

$0.035

6.83%

$0.035

$0.5475





This past week’s 6.83% raise should come as no surprise. I realize that last week, I incorrectly stated that Capital Power had a 5% targeted dividend growth rate when in fact, it was 7% for Fiscal 2021 and 5% for Fiscal 2022.

The company once again re-iterated these targets as it posted very strong cash flows which are now expected to come in above expectations. This led to an upwards revision in guidance by the company. 

The company delivered and effectively extended its dividend growth streak to eight years.

Upcoming dividend raises, cuts or suspensions

Stingray Group (TSX:RAY.A)

Current Streak: 6 years

Current Yield: 3.85%

Earnings: Tuesday, August 3

What can investors expect: Stingray Group Inc (TSE:RAY.A) is a music, media, and technology company. The company provides curated direct-to-consumer and B2B services, including audio television channels, radio stations, SVOD content, 4K UHD television channels, karaoke products, digital signage, in-store music, and music apps.

With a dividend growth streak of only six years, it is one of the newest All-Stars. Unfortunately, it is on the verge of losing its status only a couple of short years after achieving this milestone.

Typically, the company announces its annual raise along with Q1 results in August. However, last year the company chose to keep the dividend steady given the uncertainty related to the pandemic. Will the company raise this week? I’m not so sure as the company is still being impacted. Stingray has seen YoY revenue declines in each of the past 5 quarters.

While it may have easier comparables this time around, can it achieve 2019 levels? Not likely given the economy has yet to fully re-open.

If the company does decide to raise, expect it to be in the single digits. While this is below Stingray’s double-digit historical average, caution is likely to be exercised.

EST DGR

EST Increase

New Div

6.67%

$0.005

$0.08

Ritchie Bros Auctioneers (TSX:RBA)

Current Streak: 18 years

Current Yield: 1.44%

Earnings: Thursday, August 5

What can investors expect: Ritchie Bros. (TSE:RBA) operates the world's leading marketplace for heavy equipment with operations in more than 12 countries. The company does have a spotty record in terms of dividend growth announcements. However, the last few times it came along with second quarter results. Of note, the company pays out in US dollars.

Ritchie Bros dividend growth rate averaged in the mid-to-high single digits for the past decade. That was until last year the company surprised to the upside with a $0.02 per share (10%) raise.

What can investors expect this coming week? It would not surprise me to see another 2-cent raise. The company has been posting record results throughout the pandemic and is performing quite well.

The company’s dividend is also well covered as it accounts for only 53% of earnings and 24% of free cash flow. This leaves plenty of opportunity for growth.

EST DGR

EST Increase

New Div

9.52%

$0.02

$0.23

Saputo (TSX:SAP)

Current Streak: 23 years

Current Yield: 1.94%

Earnings: Thursday, Aug 6

What can investors expect: Saputo (TSE:SAP) is a leading global dairy processor and cheese producer. The company is one of the most reliable dividend growth stocks, and historically, has raised the dividend along with first quarter results.

Despite a challenging year, Saputo still rewarded investors with a modest raise (3%) last year. This was not all that surprising since the company has the 12th longest dividend growth streak in the country.

While Fiscal 2021 was yet another difficult year, I believe the company will keep the dividend growth streak alive with another modest raise. The company’s earnings and cash payout ratios sit at a respectable ~32% and as such, there is plenty of flexibility to keep the dividend growth streak alive.

Over the past couple of years, the raise came in at $0.005 per share. I’d expect similar this coming week.

EST DGR

EST Increase

New Div

2.86%

$0.005

$0.18

Moving on, check out the details for more Canadian dividend stocks, All-stars for the week of August 9th.

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 the post below.

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 Stocktrades.ca Premium and the Stocktrades blog.