Tuesday, January 29, 2008
S&P/TSX Canadian Dividend Aristocrats Index
In late October of last year, the S&P announced that they were introducing the S&P/TSX Canadian Dividend Aristocrats Index. Similar in nature to the American version, which is entitled the S&P High Yield Dividend Aristocrats, the indices select the most consistent dividend-paying stocks in their respective markets.
However, the criterion used to select them differs widely. Whereas the American list states that companies must have increased dividends every year for at least 25 consecutive years, the Canadian edition only requires that a firm have increased dividends every year for at least seven consecutive years. Conversely, compare this to the Mergent's Dividend Achievers list and the S&P actually requires an extra two years of increased dividends. Does this ensure consistent dividend growth for the corporations on the S&P list in the years to come? Only time will tell.
Even with the much stricter standards, the U.S. list contains 49 companies. The Canadian version only contains 36 as of December 21, 2007. The discrepancy is probably related to the difference in size of the two markets. If Canada used the 25 year criteria then the list would be very short indeed. As it is, both the Mergent’s and S&P lists mirror one another. About half of the companies listed have a Dividend Reinvestment Plan (DRIP) and of those corporations I would say most offer a Share Purchase Plan (SPP) or Optional Cash Purchase Plan (OCP) which allows the user to purchase additional stocks through the company's transfer agent.
The index is weighted heavily (approximately 60%) towards the Financials and the list includes businesses like AGF Management Limited (AGF.B), Manulife Financial (MFC), Royal Bank of Canada (RY) and Sun Life Financial (SLF). The next highest emphasis is Energy and Utilities (about 27%) with AltaGas Income Trust (ALA.UN), Enbridge Incorporated (ENB), Energy Savings Income Fund (SIF.UN) and Imperial Oil (IMO) leading the way.
Although the S&P/TSX Canadian Dividend Aristocrats Index and Mergent's Dividend Achievers list are very similar, the addition of another directory of high dividend paying stocks to the Canadian landscape is a welcome addition for investors looking for solid stocks to invest in.
Great prices on Brand New business books!
However, the criterion used to select them differs widely. Whereas the American list states that companies must have increased dividends every year for at least 25 consecutive years, the Canadian edition only requires that a firm have increased dividends every year for at least seven consecutive years. Conversely, compare this to the Mergent's Dividend Achievers list and the S&P actually requires an extra two years of increased dividends. Does this ensure consistent dividend growth for the corporations on the S&P list in the years to come? Only time will tell.
Even with the much stricter standards, the U.S. list contains 49 companies. The Canadian version only contains 36 as of December 21, 2007. The discrepancy is probably related to the difference in size of the two markets. If Canada used the 25 year criteria then the list would be very short indeed. As it is, both the Mergent’s and S&P lists mirror one another. About half of the companies listed have a Dividend Reinvestment Plan (DRIP) and of those corporations I would say most offer a Share Purchase Plan (SPP) or Optional Cash Purchase Plan (OCP) which allows the user to purchase additional stocks through the company's transfer agent.
The index is weighted heavily (approximately 60%) towards the Financials and the list includes businesses like AGF Management Limited (AGF.B), Manulife Financial (MFC), Royal Bank of Canada (RY) and Sun Life Financial (SLF). The next highest emphasis is Energy and Utilities (about 27%) with AltaGas Income Trust (ALA.UN), Enbridge Incorporated (ENB), Energy Savings Income Fund (SIF.UN) and Imperial Oil (IMO) leading the way.
Although the S&P/TSX Canadian Dividend Aristocrats Index and Mergent's Dividend Achievers list are very similar, the addition of another directory of high dividend paying stocks to the Canadian landscape is a welcome addition for investors looking for solid stocks to invest in.
Great prices on Brand New business books!
Thursday, January 24, 2008
2008 Mergent's Dividend Achievers list
It has been a couple of years since I wrote about the Mergent's Dividend Achievers but in that time the list has grown substantially. The 2008 Canadian version now has 46 constituents, up from the 35 I reported two years ago.
Every year Mergents compiles a list of companies from Canada that have increased their dividends for five consecutive years or more. This is an easy task for most major firms like Banks of Nova Scotia (BNS), Bank of Montreal (BMO), Fortis Incorporated (FTS) and TransCanada Corporation (TRP). However, Income Trusts/Funds and Real Estate Investment Trusts (REITs) have also started popping up on the list. Firms like AltaGas Income Trust (ALA.UN) and Cominar REIT (CUF.UN) have made strong showings of late.
As I stated in my previous post, "Using this criterion for choosing companies that pay an ever increasing dividend is especially important for those investors who are looking to replace their salaries with dividend payments as they get older. A rising dividend will help these people keep pace with inflation. However, don't disregard the importance of a growing dividend for those in their share accumulation period (like moi) as the growing dividend means it will allow me to purchase more shares on a quarterly basis through the DRIP."
The above remains true especially when companies have a high dividend yield with little to no dividend growth. A good example is TransAlta Corporation (TA). The yield sits at a reasonable 3.30% but the company has not raised the dividend since 1999! For an excellent explanation as to why this can be a problem, please see point #9 of Tom Connolly's "Investing Yourself" document. In fact, the whole article is a wonderful primer on DIY investing and I read it often!
Great prices on Brand New business books!
Every year Mergents compiles a list of companies from Canada that have increased their dividends for five consecutive years or more. This is an easy task for most major firms like Banks of Nova Scotia (BNS), Bank of Montreal (BMO), Fortis Incorporated (FTS) and TransCanada Corporation (TRP). However, Income Trusts/Funds and Real Estate Investment Trusts (REITs) have also started popping up on the list. Firms like AltaGas Income Trust (ALA.UN) and Cominar REIT (CUF.UN) have made strong showings of late.
As I stated in my previous post, "Using this criterion for choosing companies that pay an ever increasing dividend is especially important for those investors who are looking to replace their salaries with dividend payments as they get older. A rising dividend will help these people keep pace with inflation. However, don't disregard the importance of a growing dividend for those in their share accumulation period (like moi) as the growing dividend means it will allow me to purchase more shares on a quarterly basis through the DRIP."
The above remains true especially when companies have a high dividend yield with little to no dividend growth. A good example is TransAlta Corporation (TA). The yield sits at a reasonable 3.30% but the company has not raised the dividend since 1999! For an excellent explanation as to why this can be a problem, please see point #9 of Tom Connolly's "Investing Yourself" document. In fact, the whole article is a wonderful primer on DIY investing and I read it often!
Great prices on Brand New business books!
Friday, January 18, 2008
Another New Year, Another New Update!!
I have made some massive changes to the site after being inactive for a while. Please see the lists below for full details.
As well, thank you everyone for patience. I hope that the time between updates will not be so long in future.
I have added the following new plans:
1. Builders Energy Services Trust (BET.UN)
2. Charter REIT (CRH.UN)
3. Deepwell Energy Services Trust (DWL.UN)
4. Enerflex Systems Income Fund (EFX.UN)
5. Energy Savings Income Fund (SIF.UN) – NOTE: 500 shares needed to enroll
6. EnerVest Energy & Oil Sands Total Return Trust (EOS.UN)
7. Extendicare REIT (EXE.UN)
8. Fairway Investment Grade Income Fund (FGF.UN)
9. Fording Canadian Coal Trust (FDG.UN)
10. Huntingdon REIT (HNT.UN)
11. InStorage REIT (IS.UN)
12. Killam Properties (KMP)
13. Long Reserve Life Resource Fund (LRF.UN)
14. Macquarie Power & Infrastructure Fund (MPT.UN)
15. Medical Facilities Corporation (DR.UN)
16. Oil Sands Sector Fund (OSF.UN)
17. Precious Metals and Mining Trust (MMP.UN)
18. Sentry Select China Fund (CHZ.UN)
19. Shaw Communications (SJR.B)
20. Strategic Energy Fund (SEF.UN)
21. Superior Plus Income Fund (SPF.UN)
22. Top 10 Canadian Financial Trust (TCT.UN)
23. Uranium Focused Energy Fund (UF.UN)
24. Westshore Terminals Income Fund (WTE.UN)
I have updated the following plans:
1. Alcan Aluminium Incorporated- firm taken private by Rio Tinto
2. Amalgamated Partnership Income Units - DRIP suspended
3. Bonnett's Energy Services Trust - DRIP suspended
4. Canetic Resources Trust - merged into PrimeWest Energy Trust
5. Cominar Nihon REIT – changed name to Cominar REIT
6. Daylight Energy Trust - name changed to Daylight Resources Trust; Minimum amount changed to $1,000 from $2,000 while the maximum changed to $100,000 per month instead of $100,000 per year
7. Enbridge Incorporated (ENB) - 2% discount added
8. Ipsco Incorporated - firm taken private by SSAB Canada Inc.
9. MCAP Incorporated - name changed to MCAN Mortgage Corporation (MKP)
10. MDS Incorporated - DRIP suspended
11. PrimeWest Energy Trust - firm taken private by the Abu Dhabi National Energy Company, also known as TAQA
That's it for now. As always, if you see any discrepancies please post a comment.
Happing DRIPping,
Ken
Great prices on Brand New business books!
As well, thank you everyone for patience. I hope that the time between updates will not be so long in future.
I have added the following new plans:
1. Builders Energy Services Trust (BET.UN)
2. Charter REIT (CRH.UN)
3. Deepwell Energy Services Trust (DWL.UN)
4. Enerflex Systems Income Fund (EFX.UN)
5. Energy Savings Income Fund (SIF.UN) – NOTE: 500 shares needed to enroll
6. EnerVest Energy & Oil Sands Total Return Trust (EOS.UN)
7. Extendicare REIT (EXE.UN)
8. Fairway Investment Grade Income Fund (FGF.UN)
9. Fording Canadian Coal Trust (FDG.UN)
10. Huntingdon REIT (HNT.UN)
11. InStorage REIT (IS.UN)
12. Killam Properties (KMP)
13. Long Reserve Life Resource Fund (LRF.UN)
14. Macquarie Power & Infrastructure Fund (MPT.UN)
15. Medical Facilities Corporation (DR.UN)
16. Oil Sands Sector Fund (OSF.UN)
17. Precious Metals and Mining Trust (MMP.UN)
18. Sentry Select China Fund (CHZ.UN)
19. Shaw Communications (SJR.B)
20. Strategic Energy Fund (SEF.UN)
21. Superior Plus Income Fund (SPF.UN)
22. Top 10 Canadian Financial Trust (TCT.UN)
23. Uranium Focused Energy Fund (UF.UN)
24. Westshore Terminals Income Fund (WTE.UN)
I have updated the following plans:
1. Alcan Aluminium Incorporated- firm taken private by Rio Tinto
2. Amalgamated Partnership Income Units - DRIP suspended
3. Bonnett's Energy Services Trust - DRIP suspended
4. Canetic Resources Trust - merged into PrimeWest Energy Trust
5. Cominar Nihon REIT – changed name to Cominar REIT
6. Daylight Energy Trust - name changed to Daylight Resources Trust; Minimum amount changed to $1,000 from $2,000 while the maximum changed to $100,000 per month instead of $100,000 per year
7. Enbridge Incorporated (ENB) - 2% discount added
8. Ipsco Incorporated - firm taken private by SSAB Canada Inc.
9. MCAP Incorporated - name changed to MCAN Mortgage Corporation (MKP)
10. MDS Incorporated - DRIP suspended
11. PrimeWest Energy Trust - firm taken private by the Abu Dhabi National Energy Company, also known as TAQA
That's it for now. As always, if you see any discrepancies please post a comment.
Happing DRIPping,
Ken
Great prices on Brand New business books!