Canadian Dividend All-Stars Set To Announce Dividend Increases The Week Of January 14

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Includes: ACLTF, AMIVF, CDUAF
by: Mat Litalien
Summary

Canadian Dividend All-Stars are companies that have raise dividends for at least 5 consecutive years.

Two All-Stars are expected to announce dividend raises this week.

Last week saw mixed results with raises lower than expected.

There are no Canadian Dividend All-Stars expected to announce earnings next week. However, that doesn’t mean investors won’t be treated to some possible dividend raises. Before we jump into next week, let’s first take a look at what transpired last week. Of note, all figures are in Canadian dollars unless otherwise noted.

LAST WEEK – RESULTS

The year did not get off to a perfect start. Although Canadian Utilities (OTCPK:CDUAF, TSE:CU) and Atco Limited (OTC:ACLTF, TSE:ACO.X) both raised dividends, they were less than expected. Atrium Mortgage Investment Corp (AMIVF,TSX:AI) did not announce its dividend for the month of January. As such, investors can expect an announcement this coming week.

EST

DGR

EST

Increase

ACTUAL

DGR

ACTUAL

Increase

NEW

DIV

Canadian Utilities

10%

$0.0393

7.50%

$0.0294

$0.4227

Atco

15%

$0.0565

7.50%

$0.0282

$0.4048

Canadian Utilities and its parent company Atco, both extended their dividend growth streaks raising dividends by 7.50%. Canadian Utilities is one-step closer to becoming a Dividend King with its 48th consecutive year of dividend growth.

The raises however, were significantly below historical growth rates. Canadian Utilities was usually an automatic for a 10% bump, while Atco had raised dividends by 15% annually over the past five-years.

Expected Dividend Raises

Plaza Retail REIT (No symbol) (TSE: PLZ.UN)

  • Current Streak: 16 years
  • Current Yield: 7.23%
  • Earnings: N/A

What can investors expect: Plaza is a small cap REIT that is a focused on retail properties across Canada. As of end of September, it had interests in 287 properties and boasts an impressive list of tenants including retail giants Canadian Tire, Best Buy, Shoppers and Tim Hortons among others. The company has a reliable history of raising dividends in mid to late January.

Plaza’s dividend growth rate has been on a steady decline. Last year, it raised dividends by 3.56%. This was below its 3YR (3.7%), 5YR (3.8%) and 10YR (4.5%) dividend growth averages.

This is not surprising as the company’s payout ratio been on the rise. Its payout ratio as a percentage of adjusted funds from operation increased from 82.3% in 2017 to 95.1% in 2018.

As such, I don’t expect a raise any higher than 3.5%. If anything, it could be much lower.

EST DGR

EST INCR

EST NEW DIV

<=3.29%

$0.0008

$0.0241

After a year in which its share price dropped by about 8%, Plaza appears to be trading at decent valuations based on Adjusted Funds from Operations (see F.A.S.T. Graphs below). That being said, Plaza isn’t a high-growth play, it is mainly an income stock.

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.