The TSX Completion Index, those names not include in the large-cap TSX 60, may not come to mind at first when investors are looking for dividends, but there are a handful of them that have very solid track records of dividend growth since 1995. UBS strategist George Vasic highlights four financials and eight consumer/industrial stocks that make his list of dividend growers. And there are four other financials on their way.
“These mid and small cap selections can be an attractive alternative to those from the TSX 60,” he told clients. “The reason investors need to pay attention to the dividend growers outside the TSX 60 is that they have uniformly outperformed their large cap peers within the 60.”
In the financials group, Great-West Lifeco Inc (OTC:GWLOF) [TSE:GWO]., IGM Financial Inc. [TSE:IGM], Power Corp. of Canada [TSE:POW] and Power Financial Corp. [TSE:PWF] made the cut as a result of very strong dividend growth, increases each year and “still relatively low” payout ratios.
Home Capital Group Inc. (OTC:HMCBF) [TSE:HCG], which has paid and hiked its dividend for 10 years, was added to the list of up-and-coming dividend growers that includes AGF Management Ltd. [TSE: AGF.B], Brookfield Properties Corp. (BPO) [TSE:BPO], Industrial Alliance Insurance and Financial Services Inc. (OTC:IDLLF) [TSE:IAG] and TMX Group Inc. (OTC:TMXGF) [TSE:X].
In the consumer/industrial dividend growers list, the new additions are Reitmans Canada Ltd. (OTC:RTMNF) [TSE: RET] with annual dividend growth of 48.4% since 2003, and Finning International Inc. (OTCPK:FINGF) [TSE:FTT]. They join names like Metro Inc. (OTCPK:MTRAF) [TSE:MRU-A] and CCL Industries [TSE:CCL-A] on the diverse list of eight.
These name adds much-needed sector diversification, since most dividend growers are financials, Mr. Vasic noted.
None of the 14 names he highlighted last year have cut their dividend.