The Canadian Dividend Aristocrat list is a good place to explore prospective dividend stocks for buying. There are dividend stocks that grow their dividends at an incredible pace. Ideally, we aim to focus on dividend stocks with long-term growth trends.
Typically, the longer the dividend growth streak of a dividend stock, the better. But you’ve got to investigate its business and determine if more above-average growth is coming. And make sure you pay a reasonable multiple for the stock.
You can observe the one- and three-year dividend growth rates (DGR) to get an idea of recent dividend increases. Also, look at the five- and 10-year DGR. The 10-year rate will likely include a recession, which provides a glimpse of how resilient the business might be during tough economic times. Dig into the year(s) of recession for the real resilience of the business.
Here are some of the top Canadian Dividend Aristocrats with incredible five-year DGR. Stocks with high dividend growth tend to have small yields. (Typically, you would find blue-chip Canadian dividend-growth stocks growing dividends in the 5-7%. It would be amazing to find one growing its dividend at 10%.)
|Dividend stock||DG streak||5-year DGR||Recent Yield|
|Agnico Eagle Mines (TSX:AEM)(NYSE:AEM)||5||24.3%||2.3%|
|Canadian Pacific Railway (TSX:CP)(NYSE:CP)||5||20.5%||0.8%|
|Enghouse Systems (TSX:ENGH)||14||19.1%||1.1%|
Source: Data for DG streak and 5-year DGR columns are from the Canadian Dividend All-Star list. Data for Recent Yield column is from Yahoo Finance.
We believe by going through many examples, investors can better identify the type of dividend stocks to invest in for long-term buy and hold or potentially sizing a position accordingly for trading. Here are five dividend stock examples.Read More