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A dozen years ago, dividend stars in the Canadian stock market included SNC-Lavalin, Shaw Communications and Reitmans Canada.

Today, none of these companies appear among the dividend-paying companies with the best rate of growth in their quarterly cash payouts to shareholders. Take a lesson, dividend fans. Never sleep on your holdings.

There are many things to like about focusing on dividend growth as an investor, including inflation protection. Many stocks have a record of increasing dividends by an average annual rate that meets or beats even today’s elevated 6.3 per cent inflation rate. Blue chip dividend payers bring a sense of stability to a portfolio. These companies have been around for ages, and many have steadily paid dividends all along.

But high rates of dividend growth are tricky to maintain. Algonquin Power and Utilities Corp. (AQN-T) is the most recent example – the company recently announced a 40 per cent reduction in a dividend it had regularly increased in recent years.

Back in 2011, I wrote a column summarizing some of the dividend growth stars of the day. A bunch of the listed stocks are still in good shape, including Canadian National Railway (CNR-T), Imperial Oil (IMO-T), and Metro Inc. (MRU-T), Each has increased its dividend by 10 to 12 per cent on an average annual basis over the past five years, according to Globeinvestor.

Others on the 2011 list of dividend stars have faded. Some examples based on Globeinvestor data:

-SNC-Lavalin (SNC-T), which slashed its dividend by 80 per cent a few years back and now has a yield of just 0.3 per cent.

-Reitmans Canada (RET-X), which suspended its dividend in 2020 during the pandemic lockdowns.

-Shaw Communications Inc. (SJR-B-T), which has not increased its dividend in the past five years, according to Globeinvestor.

A few other dividend growth stars of 2011 have decelerated their dividend growth to levels that are lower than they were. An example is Saputo Inc., which had a 13.2-per-cent average annual dividend growth rate in 2011 and now has a five-year growth rate of 4.1 per cent. One more example is AGF Management Ltd. (AGF-B-T), which has gone from a five-year growth rate of 11.3 per cent in 2011 to 4 per cent.

Keep your eye on dividend growth stocks that have a slowing rate of dividend growth or take a pause on dividend growth. Less aggressive dividend hikes might be a sound decision for a business, but a shareholder hungry for income might take a different view.

-- Rob Carrick, personal finance columnist

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Stocks to ponder

CGI Group Inc. (GIB-A-T) For companies that don’t pump oil or supply natural gas, 2022 was probably a tough year. Apart from energy, most TSX sub-indexes lost ground. But some companies are thriving, despite the headwinds of inflation, rising interest rates, fractured supply chains, and the looming possibility of a recession. Quebec-based CGI is one of them. If you haven’t looked at it as an investor, now is the time, says Gordon Pape.

Hydro One Ltd. (H-T) We’ve all been warned that some dividend yields can be too high, signalling that a payout is in danger of being cut. But can a dividend yield be too low? It’s an important question in the case of Hydro One Ltd., the Toronto-based utility whose yield dipped to about 3 per cent – a record low – over the past couple of months as the share price rallied. Why take a chance on Hydro One when one can get a bigger yield on other stocks, guaranteed investment certificates and even money market funds? For David Berman, the bullish case for the utility is still compelling - but not enough to hold the stock right now.

The Rundown

The bulls are back. Here’s why markets are giddy again

The bulls are back in charge. Since the start of the year, stock markets have ripped higher, propelled by growing evidence that the global economy is in better shape than we feared a few months ago. After a stunningly awful 2022, the new outpouring of optimism is a welcome change for investors. But the sheer exuberance of the moves in recent weeks raises the question of whether we’re witnessing a rational repricing of the market outlook or just another manic – and temporary – swerve in sentiment. Ian McGugan looks at the arguments, pro and con.

Also see: Signs of market strength cheer U.S. stocks bulls

Hedge funds caught in bigger squeeze than 2021 meme stock frenzy: Goldman Sachs

Hedge funds betting against stocks globally abandoned those trades last week at the fastest pace since 2015, surpassing the speed of their exodus from the meme stock frenzy two years ago, according to a Goldman Sachs research note.

Bitcoin is up again – should you buy?

It’s been a good month for bitcoin, which has surged some 40 per cent to US$23,000. But is the rally built on real momentum? Is this the shining herald of a new bull market? Probably not, says the Globe’s Ethan Lou.

My model portfolio isn’t dead - it was just resting

One of John Heinzl’s New Year’s resolutions is to not leave a lot of cash sitting around earning nothing. Here’s how he is reinvesting most of the money that has accumulated in his model Yield Hog Dividend Growth Portfolio. And for an update of the entire portfolio, click here.

Others (for subscribers)

The most oversold and overbought stocks on the TSX

The highest-yielding stocks on the TSX, plus risk data

Monday’s analyst upgrades and downgrades

Globe Advisor

Stocks and ETFs to consider this RRSP season

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Ask Globe Investor

Question: Will a TFSA withdrawal in December give you additional contribution room the next year? Or would you simply be back to the same overall limit you would have been at without doing a withdrawal?

Answer: Any withdrawals from your TFSA are added to your contribution room on Jan. 1 of the following year. For example, say you had maxed out your contributions every year, including 2022. You then decided to withdraw $5,000 in December (or any other month last year). As of Jan. 1, your contribution room would increase by $5,000, plus the $6,500 limit that applies to all TFSA holders for 2023, for a total contribution limit of $11,500. If you also had unused contribution room from previous years, you would add this to your 2023 contribution limit as well.

--John Heinzl (E-mail your questions to

What’s up in the days ahead

Looking to squeeze some extra yield from your bond portfolio? Tom Czitron will explain how provincial bonds can do just that.

Click here to see the Globe Investor earnings and economic news calendar.

More Globe Investor coverage

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Compiled by Globe Investor Staff