4 Dividend Growth Stocks For Any Occasion

The financial stocks included in the S&P/TSX 60 index have an “impeccable” record of dividend growth that investors should remember in volatile times like this, says equity strategist George Vasic. Excluding dividends, the financials have risen 17.9% annually since 1995, compared to a 10% gain for the TSX 60, according to UBS Securities.

But there are a handful of other names that have performed exceptionally well in terms of dividend growth in the past decade. As a group, Canadian National Railway Co. (CNI), Enbridge Inc. (ENB), Imperial Oil Ltd. (IMO) and Thomson Corp. (TOC) have outperformed the TSX 60 by 3.9% since 1995, with less volatility.

They “appear attractive for investors who want dividend growers with additional sector diversification,” Mr. Vasic wrote in a note.

While he points to Canadian Tire Corp., Rogers Communications Inc., Shaw Communications Inc. (SJR) and Shoppers Drug Mart Corp. as some consumer names that look like they are establishing a good dividend growth record, Loblaw Cos. Ltd., Magna International Inc. (MGA) and George Weston Ltd. have been removed from his list due to recent dividend cuts or lack of growth.

Mr. Vasic acknowledges that stocks with growing dividends lag when bond yields are rising. But he says they don’t have the absolute declines many investors fear, nor do they do as badly as expected in lackluster markets.