Canadian Dividend All-Stars Expected To Announce Dividend Increases - Week Of May 7

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Includes: CIFAF, CPXGF, FNV, KEYUF, LBLCF, LSDAF, ONEXF, OTEX, PBA, TU, WNGRF
by: Mat Litalien
Summary

There are 35 Canadian Dividend All-Stars scheduled to report earnings this week.

It's expected to be the busiest week of the year for dividend raises.

Loblaw, Cineplex and Pembina Pipeline all announced raises last week.

Strap yourselves in, it is going to be a very busy week. It will be one of the busiest weeks of the year as there are 35 Canadian Dividend All-Stars scheduled to report earnings this coming week. The great news is that investors can also expect a slew of dividend raises this week. Before we dive into the coming week, let’s take a look at last week’s results.

LAST WEEK - RESULTS

Last week was a good one for dividend growth investors. Loblaw Companies Limited (OTCPK:LBLCF)(TSX: L) came through with a larger than expected raise, and Cineplex Inc. (OTCPK:CPXGF)(TSX: CGX) also announced a raise despite a rising payout ratio. Finally, Pembina Pipeline Corp (PBA)(TSX: PPL) announced its third increase within the past year.

Loblaw’s broke from historical patterns and raised dividends by 9.26%. This is significantly higher than its most recent dividend growth rates. The company has a low payout ratio and the higher bump may signify a greater appetite to return a higher percentage of earnings to investors via the dividend. The C$0.025 raise results in a new quarterly dividend of C$0.295/share.

The sustainability of Cineplex’s dividend has been in question for some time. It has a very high payout ratio and dividends account for a high percentage of free cash flow. Despite this, management remains confident in the company’s diversification strategy and raised dividends by an as expected C$0.005, or 3.57%, for a new monthly dividend of C$0.145.

Pembina proved once again that it is one of the best pipeline companies in North America. The company surprised with a C$0.01, or 5.56% raise. Pembina’s new monthly dividend is C$0.19/share.

EXPECTED INCREASES

Keyera Corp. (OTC:KEYUF) (TSX: KEY) – Current Streak – 7 YRS, Current Yield – 4.73%

Earnings Release Date: Tuesday, May 8

What can investors expect: Keyera is a midstream energy company with upstream and downstream operations. Although the company has no discernable raise pattern, it last raised dividends in May of last year. The company has 3YR and 5YR dividend growth rates around 9% and it last raised dividends by approximately 6%. Despite the small raise last year, oil and gas companies have been surprising to the upside.

EST DGR

EST INCR

EST NEW DIV

7.14%

C$0.01

C$0.15

George Weston Ltd. (OTCPK:WNGRF) (TSX: WN) – Current Streak – 6 YRS, Current Yield – 1.74%

Earnings Release Date: Tuesday, May 8

What can investors expect: George Weston is a holding company engaged in food processing and distribution and has two operating segments; Weston Foods and Loblaw. Weston owns a controlling stake in fellow All-Star Loblaw. As a result, both of their dividends patterns are very similar. Weston has a historical dividend growth rate that hovers around 3%. Will they break its historical pattern like Loblaw did last week? It is highly possible.

EST DGR

EST INCR

EST NEW DIV

9.89%

C$0.045

C$0.50

Franco Nevada (FNV) (TSX: FNV) – Current Streak –10 YRS, Current Yield – 1.26%

Earnings Release Date: Wednesday, May 9

What can investors expect: Franco Nevada is Canada’s last standing dividend growth gold company. The company pays out its dividends in U.S. funds and since 2015, has consistently raised dividends in the month of May. Its last three raises we $0.01/share and given the pressure that the gold sector is under, I don't expect any more time around.

EST DGR

EST INCR

EST NEW DIV

4.35%

$0.01

$0.24

Open Text Corp. (OTEX) (TSX: OTEX) – Current Streak – 5 YRS, Current Yield – 1.46%

Earnings Release Date: Wednesday, May 9

What can investors expect: Open Text is a new addition to the Canadian Dividend All-Star list. The Company designs, develops, markets and sells Enterprise Information Management software and solutions. Open Text also pays out its dividend in U.S. funds and has announced its raise along with Q3 earnings since its streak began. Despite its less than desirable yield, on average the company has raised dividends by a healthy 15%. With a low payout ratio, there is no reason to expect the company to deviate from its double-digit rate.

EST DGR

EST INCR

EST NEW DIV

15.15%

$0.02

$0.152

CI Financial Corp (OTCPK:CIFAF) (TSX: CI) – Current Streak – 8 YRS, Current Yield – 5.33%

Earnings Release Date: Thursday, May 10

What can investors expect: CI Financial is a wealth management and investment fund company. It pays out a monthly dividend and typically announces its raise for the following three months along with earnings. The company’s dividend growth has been on a steady decline. Its 5YR rate is 8%, 3YR rate is 5.6% and it last raised dividends by 2.2%. Its 72% payout ratio isn’t great, but not terrible either. In 2017, it managed to increase free cash flow by 17%. Will this lead to a greater dividend increase this year? I will err on the side of caution and estimate that the company will announce another low single digit raise.

EST DGR

EST INCR

EST NEW DIV

2.13%

C$0.0025

C$0.12

Telus Corp (TU) (TSX: T) – Current Streak – 14 YRS, Current Yield – 4.38%

Earnings Release Date: Thursday, May 10

What can investors expect: Telus is one Canada’s big three telecommunications firms. Its position as a market leader has benefited dividend growth investors with consistent double-digit dividend raises over the past several years. However, as the wireless market matures and slows, so too is Telus' dividend growth rate. The company has telegraphed future dividend raises with a clear policy through 2019. The company expects to raise dividends between 7% and 10% over this time frame and typically raises twice year. Once in May and again in November.

EST DGR

EST INCR

EST NEW DIV

3.5%-5%

C$0.035-C$0.05

C$0.54-0.555

Onex Corp (OTCPK:ONEXF) (TSX: ONEX) – Current Streak – 5 YRS, Current Yield – 0.32%

Earnings Release Date: Friday, May 111

What can investors expect: Onex is another new addition the Canada’s All-Star list. It is a private equity company with interests in a wide range of sectors. Since the company’s dividend growth streak began, it has consistently raised dividends along with first quarter results. The dividend yield is a paltry 0.32%, one of the lowest on the All-Star list. Unfortunately, its dividend growth rate is not enough to make up for the low yield as it has been trending downwards. Its 5YR rate is 21%, 3YR rate is 18% and it last raised dividends by 9%. Due to the nature of its business, the company often posts negative earnings so its payout ratio is not particularly relevant. The company has massive free cash flow of $15.68 per share and dividends account for miniscule percentage of cash flows. Given this, I expect the company to return to double-digit growth.

EST DGR

EST INCR

EST NEW DIV

10%

$C0.075

$C0.0825

Lassonde Industries (OTC:LSDAF) (TSX: LAS.A) – Current Streak – 10 YRS, Current Yield – 0.92%

Earnings Release Date: Friday, May 11

What can investors expect: Lassonde Industries develops, manufactures and markets a range of ready-to-drink fruit and vegetable juices. The company consistently raises dividends in the month of May along with first quarter results. Despite its low yield, the company has a history of double-digit growth rates. It has a payout ratio in the low 20s, and as such investors should be rewarded with healthy dividend bump. Lassonde's last two raises were exactly C$0.10/share and I expect the company to raise by at least the same amount next week.

EST DGR

EST INCR

EST NEW DIV

16.39%

$0.10

$0.71

Disclosure: I am/we are long TU, PBA. 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.

Editor's Note: This article discusses one or more securities that do not trade on a major U.S. exchange. Please be aware of the risks associated with these stocks.