Sunday, March 24, 2019

17 Monthly Paying Canadian Dividend Growers for 2019

Last Sunday for lunch, we did something very Quebecois, feasting on a deliciously sweet meal, taking a horse drawn sleigh ride, and finishing of with maple taffy on the snow at a sugar shack. Even though it was a tad expensive at about $25 per adult, I definitely got my money's worth in bacon and maple syrup (which is a great sugar substitute in coffee). While my father-in-law was making small talk with a former student of his who works as a waitress, I overheard her explaining that March is a critical month for maple syrup producers in Quebec. With the maple sap running when the temperature climbs above freezing and this coinciding with the only four weeks most shacks are open for meals all year, it's make or break for producers. How stressful it must be to have so much of your financial well being dependent on weather during one single month that has notoriously unpredictable weather. 

The visit to the "cabane à sucre" got me thinking that it was time to post the list of Canadian companies that pay growing monthly dividends for 2019. This has traditionally been one of my most read posts in 20182017 and 2016. Using the Canadian Dividend All-Star list from February, 2019, I determined the monthly dividend growers for 2019.   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 23 companies before I removed five organizations that had not raised their payout in the last 12-months.  I then removed Boyd Group Income Fund due to their unimpressive 0.4% dividend yield. The 17 monthly dividend growers for 2019 were consistent with the number in 2018, down from 20 in 2017, but higher than only 12 in 2016.

The resulting 17 companies included eight 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 monthly dividend payers are included below.



Here are some quick comparisons between the monthly dividend payers and the complete list of Canadian Dividend All-Stars:

- 23 of the 104 Canadian Dividend All-Stars at February 28, 2019 pay dividends monthly.
- Although the average yield of all Canadian Dividend All-Stars of 3.71% is considerably less than the seventeen monthly payers listed above (5.14%), the 1-year average dividend growth rate of 9.13% is significantly greater than that of the monthly payers (5.77%). 
- The average 3, 5, and 10-year dividend growth rates of the Canadian Dividend All-Stars of 9.62%, 11.95% and 8.74% are much greater than the comparable growth rates of the monthly payers 6.23%, 9.04%, and 5.27%. 

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 77.26%, although the trailing average P/E of 15.5X looks downright reasonable. As indicated on my Investment Holdings tab, I currently own two monthly paying Canadian Dividend All-Stars (Granite REIT and Canadian Apartment Properties). Of the remaining fifteen companies, Savaria is jumping off the page for me to conduct further research, and I'd also consider a deeper dive into Global Water Resources based on their industry and the fact they pay their dividend in US dollars. 

If your retirement savings happen to be as concentrated or weather dependent as owning a sugar shack in Quebec, I think you could do worse than diversifying into some of the names above to smooth out your cashflows to have funds trickling in each month. The psychological boost I get from holding a couple monthly dividend payers in my portfolio helps me on the 15th and last day of each month to be a proud dividend growth investor!

Do you hold or are you interested in purchasing any of the 17 monthly payers?

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