Canadian Dividend All-Stars Expected To Announce Dividend Increases - Week Of April 23

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Includes: CSUWF, DLMAF, IMO
by: Mat Litalien
Summary

Thirteen All-Stars are scheduled to report earnings this week.

Only Dollarama and Enercare have announced a dividend raise since the last update.

Imperial Oil is the lone All-Star expected to announce a dividend raise.

It’s been a slow month of April for dividend raises, and this is the first Canadian Dividend All-Star article in a few weeks. Fear not, as with earnings season ramping up, so too will the dividend raises. This week, there are thirteen Canadian Dividend All-Stars scheduled to report earnings. Of those, only one is expected to announce a raise. Before we look ahead, let’s take a look at the results from the past few weeks.

LAST WEEK - RESULTS

Since my last article, only Dollarama Inc. (OTC:DLMAF) (TSX:DOL) and Enercare Inc. (OTCPK:CSUWF)(TSX:ECI) announced dividend increases.

Dollarama’s raise came in slightly below expectations. Its C$0.01/share raise was below its historical double-digit growth rate. The company has a very low payout ratio and such, it was somewhat surprising to see its dividend growth rate dip below 10%. That being said, the company is still expanding and must believe that its capital is better allocated to expanding its retail footprint.

In mid-April, Enercare expanded its dividend growth streak to 8 years with its 4% raise. Much like Dollarama, the raise was below its historical averages. The difference is that Enercare’s payout ratio is above 100%, and a modest raise was a prudent approach. The C$0.0032/share raise results in a new monthly dividend of C$0.0832/share.

EXPECTED INCREASES

Imperial Oil Ltd. (IMO) (TSX: IMO) – Current Streak – 23 YRS, Current Yield – 1.71%

Earnings Release Date: Friday, April 27

What can investors expect: Imperial Oil owns one of Canada’s longest dividend growth streaks in Canada. This integrated oil company is engaged in all the phases of the petroleum industry in Canada. Imperial Oil has maintained a relatively steady dividend growth rate between 5% and 7% over the past 10 years. On forward P/E basis, its payout ratio is a respectable 31% which should enable the company to raise dividends for years to come. Imperial's last couple of raises were C$0.01/share and I expect at minimum a similar raise this coming week. If anything, integrated oil companies have been surprising to the upside with larger than expected dividend raises. A C$0.01/share raise, or 6.25% would result in a new quarterly dividend of C$0.17/share.

Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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