2016 Canadian Dividend Aristocrats…

Over the years, I have become found of the dividend aristocrats. The US Dividend Aristocrats have the requirements of 25 years of consecutive dividend increases while the Canadian Dividend Aristocrats have 5 years with some other rules as outlined below. 5 years is not much compared with 25 years but it’s a start.

When investing, it can be overwhelming to pick your first stock. Where do you start when there are thousands of stocks? The dividend aristocrats list give you a start by saying these companies have consistency over the others that pay dividends. If you wish to go further, you can look at blue chip stocks with 10 years of dividend growth or any numbers that matters to you. I have settled on 10 years and you can get the list by subscribing to the mailing list.

My hypothesis on the 5 year requirements is that you need a certain number of stocks to generate an index, which is what the dividend aristocrat lisy becomes. It is managed by the Standard & Poor and ETFs are setup to follow it. In order to have an index, you need a certain number of stocks as ETFs will start buying shares of the companies listed. If you raise the requirements to 10 years, the amount of stocks in the list is cut by over 65% and the amount of exposure to each stock in the index becomes greater. Not only that, the sector representation becomes ineffective. In fact, back in 2009, the requirements changed to allow one year of no increase to retain the banks in the list.

November 2016 Update

The last update has removed AutoCanada (TSE:ACQ) after they dropped their dividends.

February 2016 Update

The Canadian Dividend Aristocrats gets a full refresh at the end of February and I am pleased to provide the update.

Canadian Dividend Aristocrats Additions

• GIBSON ENERGY INC
• RUSSEL METALS INC
• AIMIA INC
• GRANITE REIT
• CANADIAN IMPERIAL BANK OF COMMERCE
• NEVSUN RESOURCES LTD
• ENERCARE INC
• ALGONQUIN POWER & UTILITIES CORP
• ROYAL BANK OF CANADA
• AUTOCANADA INC
• AGRIUM INC
• TRANSFORCE INC
• ENERFLEX LTD
• GILDAN ACTIVEWEAR INC
• UNI-SELECT INC
• DOLLARAMA INC

Canadian Dividend Aristocrats Removals

• CANADIAN PACIFIC RAILWAY
• RESTAURANTS BRANDS INTERNATIONAL
• H&R REIT
• CENTERRA GOLD INC
• MULLEN GROUP LTD
• DOREL INDUSTRIES B
• Wi LAN INC
• NEWALTA CORPORATION

Canadian Dividend Aristocrats Requirements

1. The company’s security is a common stock or income trust listed on the Toronto Stock Exchange and a constituent of the S&P Canada BMI. .
2. The security has increased ordinary cash dividends every year for five years, but can maintain the same dividend for a maximum of two consecutive years within that five year period.
3. The float-adjusted market capitalization of the security, at the time of the review, must be at least C$ 300 million.
4. For index additions, the company must have increased dividend in the first year of the prior five years of review for dividend growth. This rule does not apply for current index constituents.

For more details on the index, see the S&P Dow Jones Indices by McGraw Hill Financial.

Canadian Dividend Aristocrats Performance

IF you are not yet ready to buy individual stocks, you can buy into the index ETF tracking the Canandian the dividend aristocrats. CDZ is the ETF ticker representing the ISHARES SP TSX CDN DIVIDEND IDX FD (a.k.a Claymore S&P/TSX Canadian Dividend ETF). It’s a good pick for a RESP investment as well since it’s hard to grow that account really fast.

Related: RESP Investment Planning

If you like ETFs, you should know that Questrade offers free ETF transactions. That’s perfect for investing small amount at a time when you get started.

Canadian Dividend Aristocrats List

Below is the list for 2016 sorted by market capitalization – data taken from the March 10, 2016 update. While I try to keep it updated, the Canadian Dividend Aristocrats list is subject to change during the year and goes through monthly updates.

By the sector, the list looks as follow.

Through the Canadian Dividend Performance List, you can get many data points for comparative analysis.

Disclaimer: I do own some of the companies listed in the list. See my Stock Holdings for my list of holdings.

“Image courtesy of cooldesign – FreeDigitalPhotos.net”.