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

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Includes: AQN, CPXGF, EQGPF, FINGF, FNV, ONEXF, TU, WNGRF
by: Mat Litalien
Summary

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

No All-Stars are expected to raise dividends this week, but last week saw a few surprises.

Eight All-Stars announced an increase to their dividend last week, exceeding expectations.

After last week's high pace of dividend activity, investors are in for a little bit of a breather. Although there are about a dozen All-Stars scheduled to report earnings, none are expected to announce a dividend increase. That being said, we have plenty to cover off from last week. Of note, all figures are in Canadian dollars unless otherwise noted.

Last Week's Results

The good news from last week is that all six All-Stars - George Weston (OTCPK:WNGRF) [TSX:WN], Franco Nevada (FNV) [TSX:FNV], Finning International (OTCPK:FINGF) [TSX:FTT], Telus Corp. (TU) [TSX:T], Algonquin Power & Utilities (AQN) [TSX:AQN] and Onex Corp. (OTCPK:ONEXF) [TSX:ONEX] - came through for investors. Dividend investors were also treated to another dividend raise by Equitable Group (OTC:EQGPF) [TSX:EQB] and Cineplex (OTCPK:CPXGF) [TSX:CGX] announced its annual increase.

EST

DGR

EST

Increase

ACTUAL

DGR

ACTUAL

Increase

NEW

DIV

George Weston

5.83%

$0.04

$0.01

1.94%

$0.525

Franco Nevada*

4.17%

$0.01

$0.01

4.17%

$0.25

Finning International

5.00%

$0.01

$0.005

2.50%

$0.205

Telus

3.67%-5%

$0.02-$0.025

$0.0175

3.21%

$0.5625

Algonquin P&U*

10.06%

$0.0129

$0.0129

9.98%

$0.564

Onex

8.57%

$0.0075

$0.0125

14.29%

$0.10

Equitable Group

N/A

N/A

$0.01

3.00%

$0.31

Cineplex

N/A

N/A

$0.005

3.45%

$0.15

*Franco Nevada and Algonquin Power & Utilities pay out their dividend in U.S. dollars

Let's get started with the disappointing news.

George Weston's penny a share raise was much lower than anticipated. The parent company to Loblaw (OTCPK:LBLCF) broke from historical patterns. The raise is considerably lower than its 5% historical dividend growth rate.

Likewise, Finning International's 2.50% raise was half that of expectations. Last week, I warned investors that Finning had an inconsistent dividend growth rate and, as such, it was difficult to predict. The good news is that it did not keep its dividend steady past four consecutive quarters, as it had a tendency of doing in the past.

Now onto the good news. Franco Nevada, Telus and Algonquin Power & Utilities all delivered dividend raises in line with expectations. For Telus and Algonquin, it was easy to predict as both have a publicly stated dividend growth policy.

Telus is in the last year of a policy that expects 7-10% dividend growth and Algonquin expects to grow dividends by 10% annually through 2022.

Telus raises its dividend twice a year, and its 3.21% raise leads me to believe the total dividend growth for the year will come in near the bottom end of targets. In saying that, I would not be surprised if the company's new dividend growth rate policy targets 5-7% growth moving forward.

Franco Nevada posted blow-out results, beating earnings estimates by double digits. It extends its dividend growth streak to 12 years and remains the most reliable dividend growth play in the precious metals sector.

Although I did not bring it to your attention last week, Cineplex announced its yearly raise this past Thursday. Although it was a rough quarter with disappointing box office numbers and negative growth, the company still managed to eke out a 3% dividend raise.

Let's call it the Avengers: End Game effect. This extends its dividend growth streak to eight years and increases its monthly dividend to $0.15 per share.

Next, let's talk about the great news. Onex Corp. announced a raise that was almost double expectations. Last year, the company posted negative earnings, and management admitted it failed to execute. It appears to be back on track as it posted earnings of $1.92 per share, and management was decidedly more positive. The company's 14.29% raise results in a new quarterly dividend of $0.10 per share.

Finally, Equitable Group once again announced another dividend raise. Its penny-a-share raise is the third consecutive quarter in which it has raised dividends. I've written about Equitable Group before, and it is rapidly becoming one of the most impressive dividend growth stocks on the TSX.

Over the past year, Equitable has increased its dividend by 15 percent. At this point, Equitable's performance is setting the expectation for dividend growth every quarter. Although unrealistic, there is no denying that Equitable, which is posting record results almost quarterly, is firing on all cylinders.

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