WHAT ARE WE LOOKING FOR?
Today, let's take a look at the stock with the best track records for increasing dividends. More specifically, we'll look at the S&P/TSX Canadian Dividend Aristocrats Index.
MORE ABOUT TODAY'S SCREEN
S&P defines a Canadian dividend aristocrat as a company or trust that has increased cash dividends or distributions annually for at least five years. The security must be listed on the Toronto Stock Exchange and have a minimum market capitalization of $300-million. The index is rebalanced once a year in December. The index is weighted by indicated dividend yield and no stock may be weighted greater than 8 per cent of the index and no trust more than 5 per cent. The Claymore S&P/TSX Canadian Dividend ETF is designed to track this index. It currently has an indicated distribution yield of 4.5 per cent.
The index currently has 56 members. We'll sort the list today by highest yield.
WHAT DID WE FIND?
It hasn't been an easy year for dividend investors. Just six of the top 20 yielding names on the list have risen this year (not including dividend returns), although that doesn't look so bad when you consider that the S&P/TSX composite is up just 1.6 per cent this year. The average price return of the top 20 names is negative 3.8 per cent; fortunately, the average yield is 7.1 per cent.
As with all stocks screen, you should do more research before making a buy or sell decision. High-yielding stocks can be especially dangerous because the market may be anticipating a dividend cut.