Canadian Dividend All-Stars Expected To Announce Dividend Increases - Week Of May 28

|
Includes: BMO, LRCDF, NTIOF
by: Mat Litalien
Summary

There are four Canadian Dividend All-Stars scheduled to report earnings.

No All-Stars announced a dividend raise last week.

Three All-Stars are expected to raise dividends this week.

Bank earnings season got underway last week, with three of the Big Five reporting earnings beats. There are four other banking Canadian Dividend All-Stars scheduled to report this week, three of which are expected to raise dividends. Last week, there was nothing expected and no surprises, so we can jump right into what to expect from the three banks.

EXPECTED INCREASES

Bank of Montreal (BMO) [TSE: BMO] – Current Streak – 6 YRS, Current Yield – 3.67%

Earnings Release Date: Wednesday, May 30

What can investors expect: The Bank of Montreal is the last of Canada’s Big Five banks to report earnings. Since renewing its dividend growth streak, it has consistently raised dividends twice a year. Once along with second quarter earnings, and again in the fourth quarter. The bank broke from its historical patterns last time around with a C$0.03/share raise. Despite the fact it has the second highest payout ratio of the group, at 52% it still has plenty of room to raise dividends. As such, I expect a similar raise this week.

EST DGR

EST INCR

EST NEW DIV

3.23%

C$0.03

C$0.96

National Bank (OTCPK:NTIOF)[TSE: NA] – Current Streak – 8 YRS, Current Yield – 3.84%

Earnings Release Date: Wednesday, May 30

What can investors expect: National Bank, has the same bi-monthly dividend raise pattern as the Bank of Montreal. It was the first of the national banks to begin raising dividends post-financial crisis and is best positioned to raise dividends. Why? Its 43% payout ratio is the lowest among the national banks. The company’s last couple of dividend raises were C$0.02/share and at minimum I expect the same this time around. If anything, it is well positioned to surprise to the upside.

EST DGR

EST INCR

EST NEW DIV

3.33%

C$0.02

C$0.62

Laurentian Bank (OTCPK:LRCDF)[TSE: LB] – Current Streak – 10 YRS, Current Yield – 5.16%

Earnings Release Date: Wednesday, May 30

What can investors expect: As of late, Laurentian Bank has been in the news for all the wrong reasons. The company has been under scrutiny since it first revealed problematic mortgages back in December. It has since estimated it would need to buyback approximately C$392 million worth of bad mortgages. Prior to the announcement, the stock was trading just above C$60 per share and it has been trending downwards ever since. As a result, Laurentian’s yield has skyrocketed and is now the highest among all of Canada’s banks. The company’s last few raises were C$0.01/share and I don’t expect them to deviate from this pattern. Unfortunately, there is a slight risk that they keep their dividend steady in light of the impending mortgage repurchases.

EST DGR

EST INCR

EST NEW DIV

1.59%

C$0.01

C$0.64

Disclosure: I am/we are long BMO. 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.