Canadian Dividend Achievers

Dividend AchieversDividend Achievers are dividend growth stocks with at least 10 years of dividend growth behind them. It’s the first step in building your master stock list and finding a solid dividend growth stocks.

On the US stock market, there are 3 groups distinctly tracked:

  • Dividend Kings with 50+ years of dividend growth
  • Dividend Aristocrats with 25+ years of dividend growth
  • Dividend Achievers with 10+ years of dividend growth

The primary criteria to be on any of those list is increasing dividend annually. The amount of growth is not important with the filter to be included. One cent will keep you going and that’s why you want to look into the companies further after they make it onto these lists.

On the Canadian front, there is only one list officially tracked but I intend to show who is a Canadian Dividend Achiever.

Use the List to Select Stocks

When investing, you have to narrow down your choice to one stock before making a purchase. The best investors such as Warren Buffett have a process to select stocks. These list can be your first step in narrowing down your selection.

  1. Have clear investing rules – see my 7 Investing Rules
  2. Make a list of stocks matching your investing criteria
  3. Identify what your portfolio needs
  4. Pick a few options
  5. Research the few options further to select one

Canadian Dividend Achievers

Below is the list of all the Canadian Dividend Achievers stocks (excluding REITs and small cap stocks). The list presents you with 35 companies. That’s half the Dividend Aristocrats list and just a little more than the 10-10 stock list.

Image courtesy of David Castillo Dominici – FreeDigitalPhotos.net

14 Responses to "Canadian Dividend Achievers"

  1. The one aspect of these dividend lists that I don’t really get is yield.
    CCL.B for example, has a very low yield, relative to most of the rest of the Achievers. Even with regular increases, I doubt many people buy CCL for the dividend. Their payout ratio is so low, the stock is really more about capital appreciation.

    Making the list is somewhat of a merit badge, but even if they raised the dividend every year by 20%, it would take 5 years to get the yield up to 2%, and that would still leave you way behind about 3/4’s of the other Achievers.
    With such a low yield, being on the list isn’t even a great indicator of stability, in my opinion. It’s much less of an achievement to increase a dividend when the payout ratio is a fraction of what others pay.

    Maybe I’m missing an important concept, but to me the list is a tool, to be sure, but one that should be taken with a grain of salt when you’re looking for income primarily from dividends.

    Reply
    1. @Terry

      Great points! It’s a start though and an easy filter but it’s manipulated by some in that they can increase the dividend by 1 cent and the trend continues.

      That’s why I like the 10-10 stocks.
      – 10 years of dividend growth
      – 10% dividend growth average

      There are 26 on the list which I share by subscribing.

      Reply
    2. Not always but if a low yielding stock raises its dividend 10% or more per year, its yield may not raise that fast, but its capital gain may follow the 10% growth. Personally, I prefer med yield with med div growth. Steady Eddie.

      Reply
      1. DE: We consider Medium yield between 2.5% to 4.5%. The companies should have long history of maintaining that yield and have grown the dividend on a regular basis. As the dividend grows so does the price.

      2. @cannew
        I would break it down this way for stocks (not income trusts or REITs).
        Low is under 2% (Stock should appreciate fast as most money is re-invested)
        Medium is until 3.5% (A balance between re-investment and paying shareholders)
        Anything above 3.5% is high yield (You reach utilities here)

      3. DE: There are a few such as BCE, BMO, CM, EMA, and TRP who’s long term average yield is above 4%. I would not consider these as reaching for yield.

    3. Terry,
      Don’t confuse yield with dividends. The dividend yield is stock price/annual dividend and expressed in a percentage. When the dividend is increased the yield does not necessarily go up. It may go up, down or remain the same as the yield is dependent on both the dividend and the stock price. The yield is more likely to increase if the company decides to increase the payout ratio.

      Reply
  2. In your evaluation of CIBC and the other Canadian banks you mention their greatly increased share prices in the past year. Anticipating that there will be a stock split soon, what are the pros and cons of buying before versus after a split?

    Reply
    1. @Jorge
      A stock split means absolutely nothing other than for those that speculate. The only positive is that you may be able to buy more shares with your dividends. The value of a stock is the same at the end pf the day.

      Reply
  3. DE: Stock splits are an interesting topic. I would not buy just because one expects a split, but what does a stock split mean? Are they just trying to lower the price of the shares? Do they believe there will be more interest by investors, because the price is lower, do they feel the higher price will limit further increase or do they just wish their share price to fit a certain price range? Or does it matter?

    For us being fully invested and living off our dividends, at the time of the change there is no difference. We own twice the shares but get half the dividend. Having said that when dividends increase in the future and down the road, having more shares does seem to accelerate the income. I think a stock split does represent growth by the company and will generate more income for those who continue to hold shares of a company that continues to split their shares.

    Reply
  4. I think you’re right about stock splits keeping the price in a certain range.
    It addresses affordability issues for retail investors who usually have limited funds with which to try to achieve some diversification of holdings.
    If you’re only able to invest based on a little you can set aside each month, or even a few thousand here and there, it can take a long time before you can buy shares that go for $100, $200 or higher and any reasonable diversification would be a long way off.
    So for a time, all your eggs are in one basket which can make for more volatility in the value of your holdings.
    That leads people to go for Mutual finds and ETF’s, which can be a problem for small caps especially, since they rely on retail investors much more. A lot of large funds and institutional investors don’t hold or buy significant amounts of smaller companies.
    So keeping individual share prices affordable makes a company’s equity available to the greatest number of investors.

    Reply
  5. An example of the rationale for stock splits – on Feb. 23/17, CCL proposed a 5 for 1 share split. Their stock, after their latest reported earnings, is trading around $290. In the announcement the CEO stated “We believe that the stock split and the resulting increase in the number of shares outstanding will encourage greater market liquidity and wider distribution of its shares among a broader investor base.”

    Reply

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