As earnings begin to ramp up, so too are the expected dividend raises. This week, there are five Canadian Dividend All Stars on tap to potentially raise dividends. Before we jump into that, let’s first look at the results from last week.

Of note, all figures are in Canadian dollars unless otherwise noted.

Recent dividend updates

Last week unfolded largely as expected. Although SmartCentres REIT (OTCPK:CWYUF) [TSX:SRU.UN] has yet to declare its monthly dividend (will come this week), TFI International (TFII) [TSX:TFII] delivered for investors.

EST

DGR

EST

Increase

ACTUAL

DGR

ACTUAL

Increase

NEW

DIV

TFI International

11.54%

$0.03

11.54%

$0.03

$0.29

It was a strong quarter for TFI International which beat on both the top and bottom lines. Along with earnings, the company extended its dividend growth streak to a decade with an 11.54% raise.

The dividend raise was in line with double-digit historical averages, and TFI’s new quarterly dividend jumps to $0.29 per share.

It marks the first raise among All-Stars in a month. Hopefully, this is a good sign as the last quarter of the calendar year is typically a busy one for dividend growth.

Upcoming dividend raises, cuts or suspensions

Genworth MI Canada (OTCPK:GMICF) [TSX:MIC]

  • Current Streak: 11 years
  • Current Yield: 6.21%
  • Earnings: Tuesday, October 27

What can investors expect: Genworth MI Canada is the largest private-sector mortgage insurer in the country. It has reliably raised dividends along with third-quarter earnings.

Over the past ten years, Genworth has consistently raised dividends in the mid-to-high single-digit range. Typically, I would expect more of the same this year.

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However, earlier this year the Office of the Superintendent of Financial Institutions (OSFI) had asked the banks not to raise dividends. What is unclear, is if this “ask” extends to all financial companies.

What makes transparency difficult is that by all accounts, this is not an official directive. It is a collegial approach to ensure financial stability during these times of crisis. If anyone knows with certainty that the ask extends to all financial institutions which fall under the purview of the OFSI, please drop a comment below.

It is worth noting that no TSX-listed company in the financial sector has raised dividends since the pandemic began.

If a raise is on tap, expect it to be in line with its historical averages.

EST DGR

EST INCR

EST NEW DIV

5.56%

$0.03

$0.57

First National Financial Corp. (OTCPK:FNLIF)[TSX:FN]

  • Current Streak: 8 years
  • Current Yield: 5.78%
  • Earnings: Tuesday, October 27

What can investors expect: First National does not have a consistent dividend raise pattern. However, for the last two years, the company announced the annual raise along with third-quarter results.

As a financial company, the same question arises. Is First National able to raise dividend? Even if the answer is yes, the company’s spotty history means a raise is no guarantee.

If First National does come through for investors, don’t expect much more than a raise in the low single digits.

EST DGR

EST INCR

EST NEW DIV

3.08%

$0.005

$0.1675

Cogeco Communications Inc. (OTCPK:CGEAF)[TSX:CCA]

  • Current Streak: 16 years
  • Current Yield: 2.38%
  • Earnings: Tuesday, October 27
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Cogeco Inc. (OTC:CGECF)[TSX:CGO]

  • Current Streak: 16 years
  • Current Yield: 2.27%
  • Earnings: Tuesday, October 27

What can investors expect: Cogeco Communications and Cogeco typically move in lockstep with each other. They are scheduled to release earnings on Tuesday and have consistently raised dividends along with fourth-quarter results.

Historically, the companies had a divergent dividend growth rate. Cogeco Inc.’s dividend growth rate has typically been slightly higher than Cogeco Communications. Over the years, that gap has narrowed, and over the past two years, they both raised dividends by just over 10%.

This year will be an interesting one. Both companies are fending off a hostile takeover bid from Rogers Communications (RCI) and Altice USA (ATUS). Although the Audet family, which controls the majority of Cogeco voting rights, has repeatedly come out against the offer, other shareholders are asking them to reconsider.

At this point, it seems unlikely the Audet family will have a change of heart as they seem quite steadfast in their rebuke of the takeover. Further to this, Cogeco Communications just announced intentions to acquire DERYtelecom, the third-largest cable company in Quebec, for $405 million.

Currently, CGO and CCA shareholders are being offered $123.00 and $150.00 per share in cash from the joint bid – a significant premium to current price levels. What is a good way to appease shareholders? Keep that dividend growth streak alive.

EST DGR

EST INCR

EST NEW DIV

CCA – 10.34%

$0.06

$0.64

CGO – 10.00%

$0.0475

$0.5225

Waste Connections (WCN)[TSX:WCN]

  • Current Streak: 10 years
  • Current Yield: 0.73%
  • Earnings: Wednesday, October 28
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What can investors expect: One of North America’s largest waste disposal companies, Waste Connections has reliably raised the dividends along with third-quarter results. Of note, the company is dual-listed and pays out the dividend in U.S. dollars.

Over the course of its streak, Waste Connections has averaged approximately 16% dividend growth and last year’s raise (15.24%) was much of the same.

Although the company’s payout ratio is elevated (94%) on a trailing twelve month basis (TTM), it drops to only 26% of a forward basis. Given this, there is no reason to believe the company cannot continue raising the dividend by double digits.

EST DGR

EST INCR

EST NEW DIV

13.50%

$0.025

$0.21

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Disclosure: I am/we are long TFII. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.



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