Tuesday, April 12, 2011

State of My Dividends, Q1 2011

Today, I am updating my spreadsheet on dividends. For all my stocks, I have shown in the “11” (for 2011) column, if a company has actually increased their dividend yet for their current financial year ending in December 2011. In the “div” column preceding, I show the percentage increase in the dividends for the company’s financial year ending in 2011. I have also added columns of “Div” and “12” for two of my stocks that have financial years not ending in December 2011 and they are therefore into their 2012 financial year.

For the first quarter of 2011, I had 10 companies increase their dividends. The first 5 are as follows and I will talk about them today. I will cover the remaining 5 tomorrow.
Canadian National Railway (TSX-CNR);
Enbridge Inc (TSX.ENB);
Fortis Inc (TSX-FTS);
Metro Inc (TSX-MRU.A);
Richelieu Hardware Ltd (TSX-RCH);

The first stock to talk about is Canadian National Railway (TSX-CNR). This stock’s yield is not very high, and the 5 year median dividend is just 1.8%. Since the company usually increases their dividend at the beginning of each year, the increases do not affect the following year. Although this company has a 5 year dividend growth of just over 16.6%, the recent dividend increase was been higher at 20.4%. In good times, this company gives very good dividend increases. You could expect to see an 8% yield on a current investment in 10 years time. See the spreadsheet.

The next company is Enbridge Inc (TSX.ENB). The current dividend increase is very good, coming in at almost 15.3%. This is higher than the 5 year growth per year of 10.4% per year. The last two year’s increases were also healthy at 14.9% and 12.1%. The yield on this stock is also good as the 5 year median yield is 3.3%. After about 10 years of holding this stock, you can expect a return on your original investment around 8.5% per year. See the spreadsheet.

The next stock, Fortis Inc (TSX-FTS), is one of my favorites. This stock has been raising their dividends every year since 1973. That is, they have raised their dividend every year over the past 37 years. The dividends have grown at the rate of 14% per year over the last 5 years. This is because of high growth rates between 2006 and 2008, but these high growth rates may not appear again. Their 10 year growth rate is a lower at 8.7% per year. The dividend increase this year is just 3.6%, and since this is a utility stock, I think that the growth in dividends in the future might be lower than the 5 year rate and may even be lower than the 10 year growth rate. However, the current yield at 3.6% is good. The median yield over the past 5 year is good at 3%. See the spreadsheet.

The next stock to talk about is Metro Inc (TSX-MRU.A). This stock has just increased their dividend by over 13%. This is a good increase, although the yield on this stock is quite low. The yield is currently at 1.65%. For this stock, the 5 and 10 year yearly growth in the dividends has been at 11% and 16.1% per year. Also, the dividend growth rates are much higher than inflation, and if you live off dividends, this is a very good thing. However, since the yield is low, you would be getting a yield on a current investment of only 5% on a current investment after 10 years. See the spreadsheet.

Richelieu Hardware Ltd (TSX-RCH) is another of my stocks with a dividend increase in the first quarter of 2010. This stock has not been paying a dividend very long, as they just started in 2002. The stock’s dividend yields are low, with a 5 year median yield of just over 1.3%. The 5 and 10 year dividend increases are 12.5% and 16 % per year. These are very good increases. The current one is much higher at 22.2%. The dividends on this stock are a bit erratic as there was an 11% decrease in dividends in 2004 and in 2009, there was no increase. Dividend yield is low on this stock and is current at 1.4%. On an investment today, you could be getting a yield of 4.5% in 10 years time. See the spreadsheet.

For the first quarter of 2010, I had 7 companies increase their dividends. They were the first 6 on the above list, plus Alimentation Couche-Tard Inc. B (TSX-ATD.B). However, the ATD stock increased their dividend in March and December in 2010. So far this year, my dividends have increased by 6.4%.

This blog is meant for educational purposes only, and is not to provide investment advice. Before making any investment decision, you should always do your own research or consult an investment professional. See my website for stocks followed and investment notes. Follow me on twitter.

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