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Canadian Dividend All-Stars – Week of September 13

Posted on September 16, 2021 by Mathieu Litalien

It has been a few weeks since our last update regarding Canadian dividend stocks. The end of August is typically a time when Canada’s banks announce one of their bi-annual dividend raises. However, for reasons we’ve discussed many times, the OFSI has yet to lift caps on dividend raises.

When will that come? I continue to believe that the most logical timeframe is post October 31, which is when the Domestic Stability Buffer (DSB) returns to normal. Unfortunately, I can't say with certainty since COVID-19 variants continue to wreck havoc and threaten further shutdowns. If this happens, then we may not see dividend raises from the banks until the new year. 

As a result of the inactivity surrounding banks, the end of August came and went with little surprise. This coming week, we should once again see dividend growth ramp up as there is one Canadian Dividend All Star scheduled to raise dividends and a couple of others are expected to follow suit by the end of the month. Worth noting that September is not a busy month for annual dividend growth announcements. 

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

Recent dividend updates

In our last update, there was only one company that was on tap to raise dividends. Unfortunately, Exchange Income Corp (TSE:EIF) chose to keep the dividend steady.

The lack of dividend raise was not all that surprising. As we spoke about last time, Exchange Income Corp has been significantly impacted by the pandemic.

The good news is that the company is still performing quite well all things considered and there has been no dividend cut. A notable achievement as an aerospace company given the current environment.

Unless the company raises next quarter, Exchange Income Corp will effectively lose its status as an All Star. Given the aforementioned threats of further lockdowns due to the variants, it is unlikely that Exchange Income Corp raises the dividend in 2021. 

Upcoming dividend raises, cuts or suspensions

Savaria (TSX:SIS)

Current Streak: 8 years

Current Yield: 2.19%

Earnings: N/A

What can investors expect: Savaria (TSE:SIS) is a mid-cap health care company which manufactures and distributes mobility devices and equipment. Typically, the company announces their annual dividend raise in mid-September independent of earnings.

Over the course of its streak, Savaria has averaged around 10% dividend growth. However, last  year’s 4.3% raise was much lower than average. Not surprising considering we were in the midst of a pandemic.

While we are still dealing with the pandemic, companies have a much better handle on how operations are being impacted. For its part, Savaria has performed quite well and is on pace to grow earnings per share by 20% this year.

Savaria also made a major purchase earlier this year which effectively doubled the company’s size. While there is a risk that Savaria keeps the dividend steady as it integrates the Handicare acquisition, I think the company is likely to extend its dividend streak with a mid, single-digit raise.

EST DGR

EST Increase

New Div

5.00%

$0.002

$0.042

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.