What we're looking at
The dividend nostalgia trip we began on Thursday with a look at the 1990s continues here with a screen of the top dividend growers of the 2000s.
Morningstar CPMS, an equity research and portfolio analysis firm, has assembled a list of stocks with the highest annualized dividend growth rates between the end of 1999 and Dec. 31, 2009. Note: Stock symbols on our list are as they were at the end of the screening period.
What we found
Carry-over names from the 1990s list of top dividend growers are SNC-Lavalin, Power Financial, Great-West Lifeco, Melcor Developments and Toromont Industries. Elite dividend growers of the present day that made the list include Saputo, BMTC Group, Home Capital, AGF Management, Ensign Energy Services and Canadian National Railway (read my Portfolio Strategy column on today's top dividend growth stocks at tgam.ca/Cb7x).
This week's Number Cruncher series on dividend growth has made a dramatic case for investing in the shares of companies that have a history of increasing quarterly payouts to shareholders on an annual basis. CPMS senior consultant Jamie Hynes noted that the average annualized price gain for the top dividend growth stocks in the last decade was 14.7 per cent, while the S&P/TSX composite total return index (includes dividends) gained just 5.6 per cent. Just one stock on the list had a lower total return than the index.
It's worth noting that the dividend growth stocks delivered more share price appreciation than the index, and more income. The average yield for the dividend growers at the end of the decade was 3.4 per cent, while the index yield was 2.9 per cent.
Want to do your own dividend research? The Watchlist feature on Globeinvestor.com offers a "dividend" view that includes payout ratios, five-year dividend growth rates and five-year total returns. You should also be able to find a dividend history in the investor relations area of a dividend growth stock's website.