One of the more strenuous investing exercises is digging for dividend-growth stocks.
Dividend-growth stars are consistent in how often and how much they raise their quarterly payouts to shareholders. For the income-focused investor, these stocks are a superior breed to those that keep paying the same amount.
But verifying a company’s record for dividend growth requires the online equivalent of digging. How long has a company been increasing its dividend? Has it had to take any breaks, or cut its payout? What’s the latest percentage increase, and how does it compare with previous years? Here are five online resources that can help you find dividend-growth stocks and then verify their consistency in the short and long term:
What does a dividend-paying company have to say about its own record for increasing payouts to shareholders? To find out, head to the investor-relations area of its corporate website.
Some dividend-growth stars really own their reputation for consistently paying more. Take Enbridge Inc. (ENB-T), which includes a chart in the investors area of its website documenting a 26-year record of dividend growth averaging 10 per cent annually (disclosure note: I own some Enbridge shares).
These corporate dividend histories sometimes tell interesting stories about how even dividend-growth stars must sometimes hit the pause button. The dividend history provided by Royal Bank of Canada (RY-T) will remind you how dividend growth at the big banks flatlined for a couple of years after the global financial crisis, and then was put on hold in early 2020 at the insistence of regulators worried about financial fallout from the pandemic.
Power Corp. of Canada (POW-T) offers year-by-year listings of quarterly payouts, where you can see how this onetime dividend-growth machine shifted into neutral for several years after the financial crisis and then resumed increases back in 2015.
The stock screener on Globe Investor (click on Watchlist in the top menu bar) lets you filter stocks in the S&P/TSX Composite Index and other North American indexes by their annualized five-year dividend growth rate. Choose the “Growth” filter and then select 5-Yr Dividend Growth (%) and click on “add filter.” You can then set a range for dividend-growth percentage, say a minimum of 4.1 per cent to sync with the most recent year-over-year inflation rate.
If you select the “Per Share Info” filter, you can also use the screener to look at things like annual dividend payouts, payout ratios, ex-dividend dates and dividend payable dates.
A few other Globe Investor resources for dividend-growth investors:
-Watchlist: Create a list of stocks to follow and then compare them using different views; with the dividend view, you can rank stocks by yield, five-year dividend growth rate and one- and five-year returns; click a column heading to order the stocks from highest to lowest on dividend growth and so forth.
-Number Cruncher: Often focuses on dividend stocks.
-Refinitiv stock reports: These downloadable reports show, among other things, how a stock’s dividend yield compares with peers in the same sector. Globe subscribers can access reports from Refinitiv and other analyses by getting a quote for a stock on the Globe Investor website.
Offered by the stock exchange operator TMX Group, TMX Money offers stock quotes with lots of useful information for dividend-growth investors. Annualized three- and five-year dividend growth is shown, and there’s a chart showing quarter-by-quarter dividend history that in some cases goes back decades.
Use these charts to get a sense of a company’s dividend growth consistency and vulnerability to economic cycles. The page for Suncor Energy Inc. documents how strong dividend growth through the 2010s hit a wall in 2020, when the quarterly payout was slashed as the pandemic hit and oil prices plunged.
TMX Money also offers a stock screener that lets you set parameters for yield plus three- and five-year dividend growth. Twenty common shares came up on a screen for stocks that have increased dividends annually by 4 per cent to 25 per cent annually on average over the past five years, and have a current yield between 4 per cent and 6 per cent.
A drawback of this screener is that it shows price and fundamental data for each stock you get in your final results, but not actual dividend information.
Want to start your search for dividend-growth stocks with companies that have just boosted their payout? The Dividend History website can help. Its front page features a list of U.S. and Canadian stocks that have recently announced dividend hikes. Recently listed companies include Westshore Terminals Investment Corp. (WTE-T) and PrairieSky Royalty Ltd. (PSK-T).
This website also offers quarter-by-quarter data on dividend payouts, but with a handy notation of how much each increase works out to on a percentage basis. This will help you monitor whether a company’s pace of dividend growth is consistent or trending for the better or worse.
The stock screener on this website includes several dividend-related factors, including the dollar amount of dividends, the dividend yield, five-year average yield, payout ratio and dividend growth rate. You could set up a screen of TSX-listed stocks to find those with strong growth, and a yield that is above its five-year average. Rising yields suggest investor skepticism about a stock, but they can also signal a stock is undervalued.
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