Canadian Dividend All-Stars Expected To Announce Dividend Increases - Week Of Aug 13

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Includes: CAE, CIFAF, EMRAF, FRRPF, HDIUF, KEYUF, LTKBF, RBA, SAPIF
by: Mat Litalien
Summary

8 Canadian Dividend All-Stars are expected to report earnings.

Only 1 All-star is expected to announce a dividend raise.

6 All-Stars raised dividends last week, while one lost its status as a dividend growth company.

There is a noticeable lull in earnings this week before Canada’s banks start reporting earnings. There are eight Canadian Dividend All-Stars scheduled to report earnings, one of which should announce a dividend raise. Before we jump into this coming week, there was plenty to digest from last week.

Of note, all figures are in Canadian dollars unless otherwise noted.

LAST WEEK – RESULTS

Dividend growth investors had lots of dividend news to take in this past week. As expected, Saputo Inc. (OTCPK:SAPIF)[TSX:SAP] and Fiera Capital Corp (OTC:FRRPF)[TSX:FSZ] announced their dividend raises. Hardwood Distribution Inc. (OTC:HDIUF)[TSX:HDI] and Logistec Corp (OTC:LTKBF)[TSX:LGT.B], also didn’t disappoint. Ritchie Bros. Auctioneers (RBA)[TSX:RBA] saved its All-Star status and Keyera Corp (OTC:KEYUF)[TSX:KEY] stopped its streak of dividend stagnation.

We also had one surprise raise as Emera Inc. (OTCPK:EMRAF)[TSX:EMA] raised sooner than expected. On the flip side, we had our first company lose its All-Star status as CI Financial Corp (OTCPK:CIFAF)[TSX:CIX] halved its dividend.

EST

DGR

EST

Increase

ACTUAL

DGR

ACTUAL

Increase

NEW

DIV

Saputo

6.25%

$0.01

3.13%

$0.005

$0.165

Emera Inc.

N/A

N/A

3.98%

$0.0225

$0.5875

Logistec Corp.

9.09%

$0.0075

20.97%

$0.0173

$0.0998

Hardwoods Distribution

13.79%

$0.01

10.34%

$0.0075

$0.08

Ritchie Bros

5.88%

$0.01

5.88%

$0.01

$0.18

Keyera Corp

7.14%

$0.01

7.14%

$0.01

$0.14

Fiera Capital

5.26%

$0.01

5.26%

$0.01

$0.20

CI Financial

2.13%

$0.0025

-48.94%

-$0.69

$0.18

*Of note, Ritchie Bros pays out its dividend in U.S. dollars.

Let’s start with the bad news. CI Financial Corp announced a new capital allocation policy in which the company cuts its dividend. The new policy targets a dividend yield of approximately 3% and changes the payout frequency from monthly to quarterly. The new quarterly dividend will be $0.18 per share, or $0.72 annually, down from an annual payout of $1.41. With the announcement, CI Financial’s eight-year streak is at an end.

Saputo disappointed investors and its shares were halted on the back of poor earnings. Despite this, the company still managed to raise dividends. Unfortunately, the raise was lower than expected and continued its downward trend. Saputo’s $0.005 per share raise was half that of its last dividend two dividend raises.

Hardwoods Distribution also raised slightly lower than expected. The good news is that it still raised by a healthy 10.34%. Hardwoods’ $0.0075 per share bump results in a new quarterly dividend of $0.08 per share.

Fiera Capital once again displayed consistency and came through with an as expected raise. Fiera raised for the second time this year. Along with March’s raise, it has now raised dividends by 11% over 2017. Fiera's new quarterly payout is $0.20 per share.

Ritchie Bros. and Keyera Corp, who were both in danger of losing their All-Star status, finally announced their dividend raises. Both companies raised in-line with expectations and will see their dividend growth streaks live on. Keyera raised by $0.01 per share while Ritchie Bros also raised dividends by a penny.

Logistec came in with a raise much higher than expected. It more than doubled expectations with a C$0.0173 per share raise, good for 21%. Logistec's new quarterly payout is now C$0.0998 per share.

Finally, Emera raised a quarter sooner than I had expected. Its 4% dividend raise came only three quarters after the company’s last raise. That being said, it’s not out of the norm as the company has no discernable dividend raise pattern. With the raise, Emera’s streak has safely been extended to 12 years. Of note, the company also revised dividend growth guidance. It now expects dividends to grow at a compound annual growth rate between four and five per cent through 2021.

EXPECTED RAISES

CAE Inc. (CAE)[TSX: CAE] – Current Streak – 10 YRS, Current Yield – 1.32%

Earnings Release Date: Tuesday, August 14

What can investors expect: CAE Inc. designs and integrates training solutions for the civil aviation, defense and security, and healthcare markets.

Since 2014, CAE has consistently raised dividends along with first quarter results in August. Over the past few years, CAE’s dividend growth rate has hovered around 10%. The company’s last two dividend raise were exactly $0.01 per share.

Although its starting yield may not be appealing, the company is well positioned to continue its double-digit dividend growth. CAE’s payout ratio is a respectable 36% and analysts expect the company’s earnings growth rate to be approximately 10% over the next few years. As such, there is plenty of room for further dividend growth.

EST DGR

EST INCR

EST NEW DIV

11.11%

C$0.01

C$0.10

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.

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.