January 9

Canadian Dividend All-Stars – Week of Jan 11

Canadian Dividend All-Stars – Week of Jan 11

By Mathieu Litalien

January 9, 2021

**The writer of this article may hold positions in the stocks listed below**


After an eventful year, we start the New Year off with much of the same – considerable uncertainty. Despite the rollout of vaccines, we are still very much in the middle of a pandemic. Cases are at record highs and lockdowns are being extended across the country.

The good news, is that January brings with it some of the most reliable Canadian dividend stocks in the country. Given this, investors should be rewarded with several dividend raises over the next week.  

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


Upcoming dividend raises, cuts or suspensions

Canadian Utilities (TSX:CU)  

  • Current Streak: 49 years
  • Current Yield: 5.57%
  • Earnings: N/A

What can investors expect:

It is fitting that the year kicks off with Canada’s most prestigious dividend growth company. Canadian Utilities (TSE:CU) owns the longest dividend growth streak in Canada and is only one year away from becoming Canada’s first (and only) Dividend King!

For those un-initiated, Kings are companies which have a dividend growth streak of at least 50 consecutive years.

The company typically announces a raise to the dividend independent of earnings in early-to-mid-January. After years of 10% annual dividend growth, Canadian Utilities’ dividend growth has slowed in recent years. Last year’s 3% raise continued this downtrend.

The good news is that after a few years of slowing and negative earnings growth rates, it appears Canadian Utilities may be turning a corner. Analysts expect mid, single-digit growth over the next couple of years.

All this considered, there's almost zero chance this dividend gets cut, and we can expect low-to-mid single digit growth as it attempts to find a new path to higher growth.

EST DGR

EST Increase

 Est New Div

~3-5%

$0.0131-0.0218

$0.4485-0.4572

Atco (TSX:ACO.X)  

  • Current Streak: 27 years
  • Current Yield: 4.76%
  • Earnings: N/A

What can investors expect: The parent company of Canadian Utilities, Atco (TSE:ACO.X) is also a model of consistency. Since 1995, the company has always raised the dividend in January and announces on the same day as Canadian Utilities. 

It owns the fifth-longest dividend growth streak in the country and is one of only 11 companies to have reached the quarter-century mark of dividend growth.

Much like Canadian Utilities, Atco’s pace of dividend growth has slowed –albeit at a much slower rate.

Last year, the company raised the dividend by 7.51%, in line with its raise from 2019 but below Atco’s previous double-digit average.

Atco’s fortunes tend to rise and fall with Canadian Utilities and it is faced similar slowing growth. 


Unlike its subsidiary, Atco is still expected to see negative earnings growth next year. Given this, a raise in the low, mid-single digits is the likely outcome.

EST DGR

EST Increase

 Est New Div

~5%

$0.0248

$0.46

* Mat Litalien has no position in the companies mentioned. Follow me on Twitter @matlitalien to get my latest updates on Canadian dividend stocks.

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.