Canadian Dividend Aristocrats list

For global dividend growth investors, the Canadian dividend aristocrats list can be a source of investment ideas. Like the US Dividend Aristocrats, the “Canadian” version is also created and maintained by S&P. The major difference is the number of consecutive years of dividend increases. To become a member of the Canadian dividend aristocrats list, 5 years of consecutive dividend increases are already sufficient, while the minimum requirement is 25 years for the US stocks.

Difference Canadian and US Dividend Aristocrats

The S&P 500 applies the following criteria to construct the US Dividend Aristocrats list:

• must be members of the S&P 500
• must have increased dividends every year for at least 25 consecutive years
• Market Cap at least USD 3 billion
• Liquidity at least USD 5 million (average daily value traded)
• Diversification, at least 40 constituents and not sector allocation above 30%

The Canadian Dividend Aristocrats are based on Canadian companies within the S&P Canada BMI traded at the Toronto Stock Exchange (TSX) and a managed dividends policy of increasing dividends for at least 5 consecutive years. Furthermore, their market cap should be at least CAD 300 million.

When looking at the fundamentals, the average dividend yield of 4.2% is almost double the 2.3% of the US Dividend Aristocrats. Also, the P/E ratio is lower, 25.61 (US) versus 16.5 (Canadian).

Historical Performance

Higher total returns with lower volatility is the perception of investors in the Dividend Aristocrats. So, what about the Canadian dividend aristocrats and their historical performance? The annualized total return over the last 10 years is 9.72% for the Canadian dividend aristocrats while the benchmark returned 7.68%. The performance chart below clearly shows what the effect is of this annual outperformance of +2%  in the long run.

Looking at the details on a year to year basis, one will note that higher total returns with lower volatility is not the case of the Canadian dividend aristocrats. Also, the standard deviation, a risk indicator, is also hovering around the value of the benchmark.

Sector overview of the Canadian Dividend Aristocrats

As you can see below, the Financial sector accounts for 22.8% of the index. The IT-sector is on the other end of the spectrum at 1.1%. For comparison, the largest US dividend aristocrats sector is Consumer staples.

 

Canadian Dividend Aristocrats List

Below are the 96 companies which are currently (Feb-2020) part of the index and meeting the index criteria as defined by S&P.

The top-10 holdings in the Canadian Dividend Aristocrats are listed in the table below:

All constituents are listed below and group by sector.

Utilities

Real Estate

Materials
IT

Industrials

Health Care

Financials

Energy

Consumer Staples

Consumer Discretionary
CommunicationsTracking all the Canadian dividend aristocrats is simple, BlackRock offers the ISHARES SP TSX CDN DIVIDEND IDX FD (TSE:CDZ), which is an ETF tracking this S&P index. Please be aware that convenience comes with a cost. This ETF has a management expense ratio of 0.66%.