Canadian Dividend All-Stars Set To Announce Dividend Increases The Week Of Feb. 11

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Includes: BAM, BCE, BEP, BIP, BPY, IFCZF, SU, TMTNF, TRP, UFS
by: Mat Litalien
Summary

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

Last week, six of seven All-Stars raised dividends as expected.

This week, there are three All-Stars expected to raise dividends.

Before we get started, I recently returned from a two-week vacation. We took the kids to Florida, and our trip centered around Disney World. It was a first for all of us, and I must say Disney (DIS) is a master at theme parks. The experience was truly memorable, and it makes the majority of theme parks I've been to look like Mickey Mouse operations (pun intended). It just reiterated why I am a Disney shareholder. Disney knows how to squeeze every last penny out of customers!

Now that I am back to the cold, white North, there is plenty to digest from a busy earnings week. This week, there could be three Canadian Dividend All-Stars raising dividends. Of note, all figures are in Canadian dollars unless otherwise noted.

Last Week - Results

Last week was a mixed one for dividend growth investors. Six of the seven companies raised dividends with Domtar (UFS) [TSE:UFS] the exception. Based on its earnings call, it appears a decision on the dividend will not come until its AGM in May. This is not surprising, and I warned that Domtar was the least likely to raise. It has an inconsistent dividend pattern, and it is common for the company to keep its dividend steady for more than four consecutive quarters.

On the flip side, Intact Financial (OTCPK:IFCZF) [TSX:IFC], Suncor Energy (SU) [TSX:SU], BCE, Inc. (BCE) [TSX:BCE], Brookfield Renewable Energy Partners LP (BEP) [TSX:BEP.UN], Brookfield Property Partners LP (BPY) [TSX:BPY.UN], and Brookfield Infrastructure Partners LP (BIP) [TSX:BIP.UN] all came through with dividend raises.

EST

DGR

EST

Increase

ACTUAL

DGR

ACTUAL

Increase

NEW

DIV

Intact Financial

10.00%

$0.07

8.57%

$0.06

$0.76

Suncor

11.11%

$0.04

16.67%

$0.06

$0.42

Domtar

4.60%

$0.02

N/A

N/A

N/A

BCE

5.96%

$0.045

4.97%

$0.0375

$0.7925

Brookfield Renewable

4.08%

$0.02

5.10%

$0.025

$0.5150

Brookfield Property

6.35%

$0.02

4.76%

$0.015

$0.33

Brookfield Infrastructure

6.38%

$0.03

6.91%

$0.0325

$0.5025

*Of note, all Brookfield companies and Domtar pay out their dividends in US funds.

Suncor and Brookfield Renewable both raised dividends by more than expected. Suncor's 16.67% raise was a nice surprise and led to a new quarterly dividend of $0.42 per share. Brookfield Renewable raised dividends by $0.025, slightly more than expected. Its new quarterly dividend is now $0.5150 per share.

Brookfield Infrastructure's dividend bump of $0.0325 was in line with estimates and is reflective of its continued slowing dividend growth. Brookfield Property Partners is also suffering from slowing dividend growth. Its $0.015 per share raise was lower than expected.

Intact Financial continued its streak of $0.06 per share raise. As such, for the first time, its dividend growth rate fell below 9% (8.57%). That being said, it's still a nice raise, and its new quarterly dividend is $0.76 per share.

Once again, BCE raised dividends by 5%, in line with historical averages. BCE has targeted payout ratio between 65% and 75% of free cash flow. According to the company, its new dividend will fall in this range based on 2019 cash flow estimates.

Expected Dividend Raises

Brookfield Asset Management (BAM) [TSX:BAM.A]

  • Current Streak: 7 years
  • Current Yield: 1.37%
  • Earnings: Thursday, February 14

What can investors expect: After last week's trio of Brookfield companies, Brookfield Asset Management rounds out earnings for this group of companies. Given that all three before it raised dividends, investors can expect BAM to follow suit. Of note, BAM pays out its dividend in US funds.

Over the past number of years, Brookfield's dividend growth has been on a slow decline. This is reflective of a steady $0.01 per share raise of the past three years. I don't see any reason for it to deviate this time around.

EST DGR

EST INCR

EST NEW DIV

6.67%

$0.01

$0.16

TransCanada Corp (TRP) [TSX:TRP] - TC PipeLines, LP

  • Current Streak: 18 years
  • Current Yield: 5.00%
  • Earnings: Thursday, February 14

What can investors expect: TransCanada (TC PipeLines) is one of Canada's largest energy infrastructure companies. It has one of the longest dividend growth streaks in the country (12th), and it has an attractive 5% yield. The company has reliably raised dividends along with fourth-quarter and year-end results.

Over the past five years, the company has raised dividends by 8% to 10% annually. This also happens to be its targeted dividend growth rate through 2021. Reliable high-single-digit dividend growth over the next three years from a company yielding 5% is very attractive.

EST DGR

EST INCR

EST NEW DIV

8-10%

$0.055-0.07

$0.745-0.76

Toromont Industries Ltd. (OTCPK:TMTNF) [TSX:TIH]

  • Current Streak: 29 years
  • Current Yield: 1.58%
  • Earnings: Thursday, February 14

What can investors expect: Also reporting earnings on Thursday is Toromont, one of Canada's largest Caterpillar (NYSE:CAT) dealers. According to the All-Star list, Toromont only has a six-year dividend streak. However, the company claims 29 consecutive years of dividend growth. After looking into it, I concur with Toromont's position.

This would give Toromont the third-longest dividend growth streak in the country. Although I have brought it to the author's attention, it has not been updated as of yet.

Toromont's dividend growth rate is difficult to predict. Last year, the company raised dividends by 21%, well above its historical averages. The company has made some strategic acquisitions which has propelled earnings growth. Given this, and estimated earnings growth north of 15% in 2019, I expect double-digit dividend growth in the mid-teens.

EST DGR

EST INCR

EST NEW DIV

13.04%

$0.03

$0.26

Disclosure: I am/we are long DIS, SU. 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.