Dividend aristocrats are companies with a policy of consistently increasing dividends every year for a specific period of time. In Canada, the time frame to reach dividend aristocrat status is 5 consecutive years of dividend increases. These companies are tracked by the S&P/TSX Canadian Dividend Aristocrats Index.
In the U.S., the period of time to become a dividend aristocrat is considerably longer. It takes at least 25 consecutive years of increasing dividends for a company to qualify for the S&P 500 Dividend Aristocrats Index.
Recent History For Dividend Aristocrats
The dividend aristocrat list lost 20 per cent of its members back in 2009, dropping from 70 companies to just 56. The financial crisis of the previous year led to some high-profile dividend cuts and caused many other consistent dividend growers to put their increases on hold while they dug-in for the recession.
In 2010, the dividend aristocrat list became even more exclusive when it dropped another 16 companies from the index, reducing the list to just 40 members. By 2011, there were only 38 dividend aristocrats remaining in the index.
Dividend increases were hard to come by during these three lean years and many solid companies were dropped from the index, including some of Canada’s largest banks, insurance companies, and REIT’s.
2012 Canadian Dividend Aristocrats
Most of the big banks increased their dividends in 2011 for the first time in three or four years. In addition to the banks, many other Canadian companies were able to weather the storm during the global recession and reward their shareholders with consecutive years of dividend increases.
The 2012 version of the Canadian dividend aristocrats has increased to 58 members after adding 21 new companies while deleting just two (North West Company and Toromont Industries) from the list.
Here is the complete list of 2012 Canadian dividend aristocrats:
|Constituent Name||Symbol||Constituent Name||Symbol|
|AGF Management Ltd B Nvtg||AGF.B||Fairfax Financial Hldgs||FFH|
|Ag Growth International Inc||AFN||Finning Intl Inc||FTT|
|Atco Ltd I Nvtg||ACO.X||Fortis Inc||FTS|
|Atlantic Power Corporation||ATP||Home Capital Group Inc||HCG|
|Bank of Nova Scotia||BNS||IGM Financial Inc||IGM|
|Barrick Gold Corp||ABX||Imperial Oil Ltd||IMO|
|Bird Construction Inc.||BDT||Intact Financial Corp||IFC|
|CCL Industries Inc B||CCL.B||Jean Coutu Group Inc A||PJC.A|
|Cameco Corp||CCO||Keyera Corp.||KEY|
|Canadian National Railways||CNR||Methanex Corp||MX|
|Canadian Natural Resources||CNQ||Metro Inc A||MRU.A|
|Canadian Pacific Railway||CP||Northern Property REIT||NPR-U|
|Canadian Real Estate Inv Trst||REF-U||Pason Systems Inc||PSI|
|Canadian Tire Corp Ltd||CTC.A||Reitmans Canada Ltd A||RET.A|
|Canadian Utilities Ltd||CU||Ritchie Bros Auctioneers||RBA|
|Canadian Western Bank||CWB||Rogers Communications||RCI.B|
|Cineplex Inc.||CGX||SNC – LAVALIN GROUP||SNC|
|Cogeco Cable Inc.||CCA||Saputo Inc||SAP|
|Cogeco Inc.||CGO||Shaw Communications||SJR.B|
|Computer Modelling Group||CMG||ShawCor Ltd A||SCL.A|
|Constellation Software Inc.||CSU||Shoppers Drug Mart||SC|
|Corus Entertainment Inc.||CJR.B||Suncor Energy Inc||SU|
|Dorel Industries B||DII.B||TELUS Corp||T|
|Emera Inc.||EMA||Talisman Energy Inc||TLM|
|Empire Co Ltd A Nvtg||EMP.A||Thomson Reuters Corp||TRI|
|Enbridge Inc||ENB||Tim Hortons||THI|
|Enbridge Income Fund Holdings||ENF||Toronto-Dominion Bank||TD|
|Ensign Energy Services||ESI||TransCanada Corp||TRP|
|Exchange Income Corporation||EIF||Transcontinental A Subvtg||TCL.A|
Claymore Dividend ETF (CDZ)
Investors can replicate the performance of the S&P/TSX Canadian Dividend Aristocrats Index by purchasing CDZ, the dividend ETF from Claymore. This ETF tracks the dividend aristocrat index and has a Management Expense Ratio (MER) of 0.67%.
CDZ offers a relatively low cost way for investors to diversify their dividend holdings.
Final Thoughts on Dividend Aristocrats
I use the dividend aristocrats index as part of my criteria for selecting a dividend growth stock, but I don’t believe the 5-year track record of dividend growth is good enough to measure a company’s ability to grow their dividends over time. I prefer the much tougher 25-year measuring stick of the S&P 500 Dividend Aristocrats Index.
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What are your thoughts on the Canadian Dividend Aristocrats Index? Is the 5-year time frame too short?