In 2017 and last year, I shared a list of Canadian companies that provide dividend growth guidance. I've decided to update this list as I find dividend growth guidance useful in helping me assess the capital allocation plans for companies, introducing a soft control by which to judge management's actions, and assisting me in projecting the organic dividend growth rate of my portfolio for 2021.
Of the Canadian companies that provide dividend growth guidance, Enbridge Inc. (TSE: ENB, NYSE: ENB) is likely the best known. During their Investor Day presentation on December 8th, they raised their dividend by 3.0%, below their projected 5 - 7% guidance tied to their forecasted distributable cashflow growth rate through 2023. Although the magnitude of Enbridge's dividend increase might have disappointed some investors, it is worth noting that with the shares currently yielding around 8%, any more of a raise might have set off alarm bells for investors wary of sucker yields.
The table below could be considered a starting point for further research. Please, let me know of any other Canadian companies that provide dividend growth guidance. I'll gladly update the table with your input. Like last year, I almost included BCE Inc. as management has been consistent in raising their dividend by about 5% since 2009. However, management has been reluctant to confirm this target during conference calls and in their presentations to investors. Therefore, I opted for the conservative approach of not including them below. Lastly, the percentage beside the company's ticker symbol in brackets is the amount of the most recent dividend increase.
TC Energy Corp (TRP - 8.0%) | Dividend growth of 8-10% through 2021, 5-7% after 2021 |
Enbridge Inc (ENB - 3.1%) | Dividend growth of 5-7% through 2023 |
Emera Inc (EMA - 4.1%) | Dividend growth of 4-5% per year through 2022 |
Telus Corp (T - 6.9%) | Dividend growth of 7-10% per year through 2022 |
Capital Power Corp (CPX 6.8%) | Dividend growth of 7% per year through 2021, 5% in 2022 |
Fortis Inc (FTS - 5.8%) | Dividend growth of 6% per year through 2025 |
Algonquin Power (AQN - 10.0%) | Dividend growth of 10% per year through 2021 |
Brookfield Infrastructure Partners (BIP.UN - 7.0%) | Annual distribution increases of 5-9% |
Brookfield Renewable Partners (BEP.UN - 5.3%) | Annual distribution increases of 5-9% |
For those of you with a sharp eye, you may notice that Brookfield Property Partners (BPY.UN) and their expected annual distribution growth of 5-8% is missing from this year's list. After delivering a paltry 0.8% distribution increase in January 2020, the company changed their distribution guidance to "annual distribution growth in-line with earnings growth". However, given BPY's current yield of 8.7%, and the absolute terror that the pandemic has had on their retail and office property portfolio, most unit holders would be happy if management simply maintains the current distribution.
