Canadian Dividend All-Stars

It is a short trading week as the North American stock markets are closed on Monday, February 15. So if you’re looking to buy Canadian stocks, you’ll only have four days this week. There are only a few All Stars on tap to raise dividends this coming week. 

Before we jump into that, let’s take a look at the action from last week’s Canadian dividend stocks results. Of note, all figures are in Canadian dollars unless otherwise noted.

Recent dividend updates

This past week unfolded as expected, with two notable exceptions. I had TC Energy (TSX:TRP) incorrectly listed as reporting last week, when it is only expected to do so this coming week. Investors can expect TC Energy to come through with its raise on Thursday. 

The second, was that Toromont (TSX:TIH), one of the most reliable dividend growth stocks in the country kept the dividend steady. This is a deviation from the norm, and one of the most surprising non-raises in some time. 

That being said, there is no question the company is being impacted by the pandemic as revenue and profitability dropped. It has until end of year to maintain the streak, so the next few quarters will be interesting to watch. 

As for the rest, Restaurant Brands International (TSX:QSR), Brookfield Asset Management (BAM.A), and FirstService (TSX:FSV), they all came through with their annual raise. 

Company	EST DGR	EST Increase	Actual DGR	Actual Increase	New Div
BAM.A	~8%	$0.01	8.33%	$0.01	$0.13
QSR	~2-5%	$0.01-0.02	1.92%	$0.01	$0.53
FSV	~10%	$0.017	10.61%	$0.0175	$0.1825

Brookfield delivered strong results and extended its growth streak to a decade with an 8% raise. The penny raise was inline with expectations and mirrors that of the targeted rate from its subsidiaries. 

For its part, FirstService continues to be an underappreciated dividend stock. It once again delivered a double-digit raise (10.61%) and it is establishing itself as a reliable dividend payer. Of note, the company continues to hit all-time highs on the back of strong results. 

Finally, QSR’s meagre 1.92% raise was to be expected. The pandemic is wrecking havoc on the restaurant industry and the company saw pretty big declines across all its segments last quarter. 

That being said, it is well positioned for a rebound once the economy re-opens and the raise does keep its dividend growth streak alive. 

Upcoming dividend raises, cuts or suspensions

goeasy (TSX:GSY)

Current Streak: 6 years

Current Yield: 1.68%

Earnings: Wednesday, February 17

What can investors expect: goeasy (TSX:GSY) has quietly established itself as a reliable income stock. It has built up a seven-year streak and has always announced the annual dividend raise along with fourth quarter results.

Now, I know what you might be thinking – I thought financials and some Canadian dividend All-stars couldn’t raise dividends because of the OFSI? This is true only of those for which it has oversight.

As an alternative lender, you might think it would but the good news is that it doesn’t. This means, it is likely to become the first financial company to raise the dividend since First National (TSX:FN) did so last October. Much like goeasy, First National does not fall under the scope of the OFSI.

So what can investors expect? Likely a nice double-digit raise. Since goeasy’s dividend growth streak began, it has consistently raised by more than 30% annually. Last year, goeasy delivered a hefty 45.6% raise.

While I don’t expect a raise that high this year, the company is well positioned to raise at least 25% when it announces earnings on Monday.

EST DGR	EST Increase	New Div
25%+	$0.12	$0.57

Magna International (TSX:MG)

Current Streak: 11 years

Current Yield: 2.11%

Earnings: Friday, February 19

What can investors expect: Magna International is a leading auto parts manufacturer and is a global behemoth. The company has consistently raised along with Q4 and year-end results.

Magna (TSX:MG) is an underappreciated dividend stock. As a company that operates in a cyclical industry, the fact it was able to build up an 11-year growth streak is a testament to its ability to deliver.

Historically, the company has managed to average dividend growth in the low-to-mid teens. Last year’s 9.59% raise was the first time the company failed to hit double-digits. Not that this isn’t a healthy raise.

The company’s payout ratio of 83% is inflated due to the impacts of the pandemic and on a forward basis the ratio drops to a mere 23%. Given this, I expect the company’s annual dividend raise to come inline with last year’s.

EST DGR	EST Increase	New Div
10%	$0.04	$044

*Mat Litalien is long GSY