Dividend growth investing may not be for everyone, but I am a fan. I like the idea of receiving tax efficient payments from long established companies with an established track record of annually increasing their payments to shareholders. While I also believe in the merits of passive index investing, I also enjoy the active nature of dividend investing. I use the passive indexing approach for our famly RESP, my wife’s RRSP, and the international portion of my own RRSP. I use the dividend strategy for my leveraged portfolio, a significant portion of my RRSP, and our corporate portfolio. We currently collect around $18,000/year in dividends, you can follow my dividend progress here.
In the past, I’ve written a number of articles on dividend growth stocks, I’ve never properly categorized them.
- A Dividend Achiever is a company that has increased their dividend at least 10 years in a row;
- A Dividend Aristocrat is a company that has increased their dviidend at least 25 years in a row; and,
- A Dividend King is a company that has increased their dividend at least 50 years in a row. The true cream of the crop.
Here in Canada, we have a relatively small market, and an even smaller list of quality dividend stocks. In a previous article about the top Canadian dividend growth stocks, you will see a number of dividend achievers, but only a couple dividend aristocrats (FTS and CU), and no dividend kings in Canada.
As of November 9, 2015
Company Symbol Years of Dividend Growth 5 year avg Dividend Growth Rate Payout Ratio Current Yield Canadian Utilities CU 43 9.72% 71% 3.4% Fortis Inc. FTS 41 4.99% 79% 3.6% Canadian Western Bank CWB 23 14.43% 28% 3.5% Atco Ltd ACO.X 21 11.46% 42% 2.6% Thomson Reuters TRI 21 3.04% 55% 2.5%(USD) Empire Company Ltd EMP.A 21 8.17% 34% 1.5% Ensign Energy Services ESI 20 6.56% 1,200% 5.5% Imperial Oil IMO 20 4.79% 26% 1.3% Metro Inc MRU 20 14% 30% 1.3% Canadian National Railway CNR 19 17.49% 36% 1.6% Enbridge Inc ENB 19 16.4% 1,000% 3.6% Home Capital Group HCG 16 10% 24% 2.6% Saputo Inc SAP 15 17% 43% 1.7% Canadian Natural Resources CNQ 14 29.4% 80% 2.7% SNC Lavalin SNC 14 8.6% 14% 2.4% Transcanada Corp TRP 14 5.25% 90% 4.8%
So where do we find these elusive dividend kings? You’ll have to look at the biggest market in the world – the US! In the US, there are 18 dividend kings that have increased their dividend at least 50 years in a row.
The only issue is that right now US markets are making all time highs, which means prices are generally high with most yields relatively low. However, there is confidence that there will be an annual dividend increase.
The Dividend Kings List
|Company||Symbol||Years of Dividend Growth||Current Yield|
|American States Water||AWR||61||2.04%|
|Genuine Parts and Company||GPC||60||2.63%|
|Northwest Natural Gas||NWN||60||2.86%|
|Proctor & Gamble||PG||60||3.12%|
|Johnson & Johnson||JNJ||53||2.56%|
|Farmers & Merchants Bancorp||FMCB||50||2.19%|
As you can see from the list, some of these names are very recognizable with global brand awareness and long term competitive advantage. Names such as Proctor & Gamble, Coke, Johnson & Johnson, 3M, Colgate, and Lowe’s. All of these I would purchase if/when their price/valuation is reasonable.
As a disclaimer, I hold the following dividend kings within my RRSP: Proctor & Gamble; Emerson Electric; Coca-Cola; and, Johnson & Johnson. Also, this post is not meant to provide recommendations for your portfolio, but a starting point for your research.
More Dividend Stock Investing Info:
- How to buy dividend stocks
- When to buy dividend stocks
- How to create a stock watchlist
- Top Canadian stock screeners