Almost year-end and the end of far from normal year for investors, so time to revisit the Canadian dividend aristocrats.
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 Index, 5 years of consecutive dividend increases are already sufficient, while the minimum requirement is 25 years for the US edition.
Many changes to the Canadian dividend aristocrats
This “5-year dividend ” threshold had a major impact on the Canadian edition. The US dividend aristocrats lost only one member (Ross Stores) in 2020 while the Canadian dividend aristocrats lost far more members due to dividend cuts or suspensions in 2020.
The total constituents dropped to 81 today, losing in a total of 15 members. Here is how the Canadian Dividend Aristocrats Index changed in 2020:
Deleted – Cineplex (CGX)
Deleted – CAE Inc (CAE)
Deleted – Enerflex Ltd (EFX)
Deleted – Inter Pipeline Ltd (IPL)
Deleted – MTY Food Group Inc (MTY)
Deleted – NFI Group Inc (NFI)
Deleted – RCH Richelieu Hardware Ltd (RCH)
Deleted – SES Secure Energy Services Inc (SES)
Deleted – UNS Uni-Select Inc (UNS)
Deleted – Alaris Royalty Corp (AD)
Deleted – Gildan Activewear Inc (GIL)
Deleted – Methanex Corp (MX)
Deleted – Suncor Energy Inc (SU)
Deleted – Sleep Country Canada Holdings Inc. (ZZZ)
Deleted – Laurentian Bank of Canada (LB)
Still a strong performance
The Canadian dividend aristocrats are still showing a strong performance. Based on the annualized total return the Aristocrats are outperforming the benchmark (TSX), 7.32% compared to 5.21% for the TSX. The recovery from the COVID-19 March low has been remarkable.
The indicated average dividend yield is 4.18% for the Canadian dividend aristocrats index, which is quite positive, and as well the average P/E of 16.26.
The table below lists the top-yielding Canadian dividend aristocrats with a current dividend yield above 5%.
Other Sources of Dividend Investment Ideas
There are several lists to quickly screen for businesses that regularly pay rising dividends.
- The Dividend Aristocrats Index is based on 64 companies part of the S&P 500 and with 25+ years of consecutive dividend increases.
- The Dividend Kings List is even more exclusive than the Dividend Aristocrats. It is comprised of less than 20 businesses with 50+ years of consecutive dividend increases.
- The MoneyInvestExpert Defensive Aristocrats is a performance-based top-10 selection of the Dividend Aristocrats to outperform the market in the long-term.
- Portfolio lists like the Berkshire Hathaway Portfolio or Bill Gates’stock portfolio can be a source.
- For the European focused investors, there is also the list of European Dividend Aristocrats.
- Dividend Champions are not necessarily members of the S&P 500 index, have increased their dividend for 25 or more consecutive years.
- 100+ years of dividend, the list of stocks that pay over 100 years of dividend can be a list of inspiration.
- Blue Chips stocks from the US or the European ones.
Next to selecting the right dividend stocks, important principles for successful long-term investing are Disciple, Diversification, Defensive & indeed Dividend. Read more about this in our free e-book.
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