Canadian Dividend All-Stars – Week of Feb 1

Posted on January 31, 2021 by Mathieu Litalien

The markets are once again in unprecedented territory.

In 2020, it was the pandemic that sent the markets crashing and into considerable volatility. In 2021? It is WallStreetBets vs the hedge funds.

The battle is having an impact on the broader markets as retail investors are beating notable short sellers at their own game. How it ends, no one knows but volatility has returned.

The good news for dividend growth investors?

This time, dividend growth is unlikely to be impacted. February is the busiest month of the year for dividend growth in Canada has ~25% of All-Stars announced their annual raise in February last year.

Before we jump into that, let’s first take a look at the action from popular Canadian dividend stocks last week.

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

Recent dividend all-star updates

Last week, two of the most reliable dividend stocks in the country came through for investors. Canadian National Railway (TSX:CNR) and Metro (TSX:MRU) both announced their annual raises.

Company

EST DGR

EST Increase

Actual DGR

Actual Increase

New Div

CNR

~7%

$0.04

6.96%

$0.04

$0.615

MRU

11.11%

$0.025

11.11%

$0.025

$0.25

First up, we have CN Rail which raised the quarterly dividend inline with expectations. The 7% quarterly bump was the same as last year’s raise and reflective of a more cautious tone.

The company also disappointed with guidance so it is not surprised to see the company take a more tempered approach to dividend growth.

As for Metro, it too raised inline with my expectations. The attractive 11.11% is a reflection of Metro’s low payout ratio and its status as a defensive option in these times of uncertainty.

Despite its low yield, it remains a premier dividend growth stock.

Upcoming dividend raises, cuts or suspensions

BCE (TSX:BCE)

Current Streak: 12 years

Current Yield: 6.08%

Earnings: February 4, 2021

What can investors expect: Canada's largest telecommunications company is expected to extend its dividend growth streak this coming Thursday.

Like clockwork, BCE announces an annual dividend raise along with fourth quarter results.

Consistency and reliability - this is what you get with BCE. It won't wow investors with double-digit growth, but it is one of the more reliable blue-chip companies on the TSX Index.

It doesn't hurt that the company is one of three that form an oligopoly in the telecommunications market.

Here is a fun fact that you may not be aware of – BCE’s 12-year streak would likely be longer if not for a failed takeover attempt by a group led by the Ontario Teacher’s Plan back in 2008.

During that time, BCE kept the dividend steady which caused its dividend growth streak to reset.

Over the past three and five-year time periods, BCE has raised the dividend by ~5%. Last year, the company raised by 5.05% and there is no reason to expect anything different in 2021.

EST DGR

EST Increase

EST New Div

~5%

$0.042

$0.8745

Brookfield Infrastructure Partners (TSX:BIP.UN)

Current Streak: 13 years

Current Yield: 1.55%

Earnings: Wednesday, February 3

What can investors expect: It is that time of the year when Brookfield family of companies start to announce their annual dividend raise. It is also worth noting that all of the Brookfield stocks pay out in USD. First up this year is Brookfield Infrastructure.

Worth noting, that since BIP and BIPC are economically equivalent, the dividend raise and total dividend per share applies to both share classes.

BIP is one of the fastest growing in the Brookfield family and at 13-years, owns the longest dividend growth streak of the bunch.

Although its dividend growth rate isn’t as robust as it once was, investors can count on stable mid-to-high single digit growth.

Over the last 3 and five year periods, it has averaged 7.4% and 8.8% dividend growth. Last year’s raise came in at 7.24%.

This year? Expect much of the same as it has a targeted dividend growth rate between 5-9% annually. This is a strong utility company, one that has provided investors with exceptional returns.

EST DGR

EST Increase

EST New Div

~7%

$0.038

$0.5755

Brookfield Renewable Partners (TSX:BEP.UN)

Current Streak: 11 years

Current Yield: 2.40%

Earnings: Wednesday, February 3

What can investors expect: On the same day as Brookfield Infrastructure, Brookfield Renewable Partners is also expected to release quarterly results. Last year, the company announced a raise independent of earnings as it coincided with the closing of its TerraForm acquisition.

This year, I’d expect the raise to once again come along with earnings.

Much like BIP, Brookfield Renewable also spun out a corporation. The same rules apply – it is intended to be economically equivalent, so the dividend increase will apply to both types of shares.

Much like BIP, Brookfield Renewable has a pretty consistent dividend growth history. Over its streak, the company has typically raised the dividend by approximately 5% annually.

Once again, no reason to expect anything different this year.

EST DGR

EST Increase

EST New Div

~5.36%

$0.04

$0.59

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.