The list of Canadian companies that pay growing monthly dividends was one of my most read posts in 2017 and 2016. Using the Canadian Dividend All-Star list from December 31, 2017, I determined the list of monthly dividend growers for 2018. To be included, companies had to pay a monthly dividend, increase their distribution at least once in the last 12 months, and have a minimum 5-year history of annually increasing their payouts. The initial screen this year yielded 21 companies before I removed three organizations that had not raised their payout in the last 12-months (Exchange Income Corporation, Atrium Mortgage Investment Corporation and Pizza Pizza Royalty Corp). I also removed Boyd Group Income Fund due to their unimpressive 0.5% dividend yield. Although the 17 monthly dividend growers for 2018 fell from 20 last year, it still remains higher than the 12 companies in 2016.
The resulting 17 companies included six real estate investment trusts (REITs). As the payout ratios and valuations of REITs are usually calculated based on funds from operations (FFO) or adjusted funds from operations (AFFO), I decided to separate the resulting list in two so as not to confuse any casual readers. For your browsing pleasure, the resulting lists are included below.
Here are some quick comparisons between the monthly dividend payers and the complete list of Canadian Dividend All-Stars:
- 21 of the 101 Canadian Dividend All-Stars at December 31, 2017 pay dividends monthly.
- Although the average yield of all Canadian Dividend All-Stars of 3.13% is considerably less than the seventeen monthly payers listed above (5.25%), the 1-year average dividend growth rate of 9.07% is significantly greater than that of the monthly payers (5.12%).
- The average 3, 5, and 10-year dividend growth rates of the Canadian Dividend All-Stars of 10.08%, 11.90% and 8.55% are much greater than the comparable growth rates of the monthly payers 6.08%, 6.26%, and 3.15%.
As with any other screen, the above list is simply a starting point for further research. Clearly, a deeper dive is required given the average EPS payout ratio of 292% and the high average trailing P/E of 47.3X valuation (partly due to nonsensical values for TransAlta Renewables). As indicated on my Investment Holdings tab, I currently own four monthly paying Canadian Dividend All-Stars (Granite REIT, Canadian Apartment Properties REIT, Enbridge Income Fund Holdings and Enercare Inc.). Of the remaining thirteen companies, I have owned Inter Pipeline in the past, and have included Altagas, First National and Cineplex on past watch lists.
Do you hold or are you interested in purchasing any of the 20 monthly payers?