A Canadian Dividend Aristocrat typically refers to a TSX stock that has increased its dividend for at least five years. Ever wonder what a Canadian Dividend Aristocrat must be like before it actually becomes one?
Let’s rewind a bit. The stock must pay its first dividend and after that, be able to continue increasing its dividend year after year. Therefore, it should generate stable (ideally growing) earnings.
I believe I have a stock here that is a Canadian Dividend Aristocrat in the making. However, I’m probably way ahead in this thinking because it’ll likely take years before it will pay its first dividend.
Why do I hold shares of this stock now if it pays no dividend? …because if I’m right, this stock is going to give me a whole lot of capital gains before it initiates a dividend.
Right now, this small-cap stock has better places to allocate its capital. It was no April Fool’s joke when it announced another acquisition on Thursday, which drove the stock price 13% higher.