5 Canadian Stocks with the Best Dividend Growth Rate

The TSX-listed Canadian stocks we’ve identified have increased their investor payouts by ~175% on average over the past three years

SmallCapPower | December 3, 2019: Dividend-paying stocks can generate income for investors without having to sell shares. Additionally, dividend increases are generally a good indicator that companies are growing their free cash flow (FCF) and are more likely to have better returns than their peers with stagnant dividend payouts. Dividend increases are typically a positive sign because it implies that a company’s profits have increased, thus more funds can be allocated to dividend payouts. Today we have discovered four TSX-listed Canadian stocks that have had an average dividend growth rate of ~175% over the past three years.

*Share price data as at November 29, 2019, data obtained from S&P Capital IQ
**LTM Q3/19 dividends used as a proxy for F2019

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Norbord Inc. (TSX:OSB) – $36.25
Paper and Forest Products

Norbord is a global manufacturer of wood-based panel products and Oriented Stand Board (OSB) for residential and light commercial construction. The Company operates 15 OSB mills and two U.K. based plants that produce particleboard and other value-added products. Norbord’s current strategy focuses on margin improvement, having delivered $331M of margin expansion over the past 14 years. It also intends to diversify into specialty products to reduce earnings volatility and reliance on the residential housing market. Norbord has a sustainable growth rate of 40%.

  • Market Cap: $2,960.5M
  • 90-Day Return: +15.5%
  • YTD-Return: +0.6%
  • 90-Day Average Trading Volume: 253,390
  • LTM Q3/19 Dividend Payout: $1.29
  • FY2016 Dividend Payout: $0.30
  • 3-Year Dividend Growth: +330%

Polaris Infrastructure Inc. (TSX:PIF) – $11.72
Renewable Electricity Producers

Polaris Infrastructure is a Canada-based company that is engaged in the development and operation of renewable energy projects in Latin America. The Company owns the San Jacinto-Tizate Geothermal Project, with an installed capacity over the 76 Megawatts, located in northwest Nicaragua, near the city of Leon. The project has 11 production wells for exploration of steam and hot brine. Polaris is currently in the early stages of a new development project in the San Cristobal Geothermal Field, an exploration concession with an area of 100 square kilometers located in northwest Nicaragua. Polaris Infrastructure Inc. also operates a run-of-river (ROR) hydro facility of 5 MW in Canchayllo, Peru; and is developing 2 ROR hydro projects, El Carmen and 8 de Agosto in Peru.

  • Market Cap: $184.1M
  • 90-Day Return: -15.9%
  • YTD-Return: +12.6%
  • 90-Day Average Trading Volume: 12,220
  • LTM Q3/19 Dividend Payout: $0.60
  • FY2016 Dividend Payout: $0.43
  • 3-Year Dividend Growth: +40%

Restaurant Brands International Inc. (TSX:QSR) – $87.27
Fast Food Restaurants

Restaurant Brands International operates and franchises quick-service restaurants. The Company operates through Tim Hortons, Burger King, and Popeyes. Tim Hortons offers primarily coffee and baked goods under the Tim Hortons brand name, primarily fast food hamburgers under the Burger King brand, and primarily chicken under the Popeyes brand name. At the beginning of 2019, the Company operated ~4,846 Tim Hortons restaurants, ~17,769 Burger King restaurants, and 3,102 Popeyes restaurants in ~100 countries.

  • Market Cap: $26,004.2M
  • 90-Day Return: -14.9%
  • YTD-Return: +22.1%
  • 90-Day Average Trading Volume: 167,360
  • LTM Q3/19 Dividend Payout: $1.95
  • FY2016 Dividend Payout: $0.62
  • 3-Year Dividend Growth: +215%

Quebecor Inc. (TSX:QBR.B) – $32.94
Media and Entertainment

Quebecor is a major cable and wireless operator in the province of Quebec. Quebecor operates in the following business segments: Telecommunications, Media, and Sports and Entertainment. Quebecor’s corporate strategy is to capture synergies among its segments and leverage the value of content for the benefit of multiple distribution platforms. The Company also owns select media assets, including a 68.4% equity interest in television broadcaster TVA Group.

  • Market Cap: $8,461.5M
  • 90-Day Return: +10.5%
  • YTD-Return: +14.1%
  • 90-Day Average Trading Volume: 66,280
  • LTM Q3/19 Dividend Payout: $0.34
  • FY2016 Dividend Payout: $0.09
  • 3-Year Dividend Growth: +278%

Laurentian Bank of Canada (TSX:LB) – $46.24
Banks

Founded in 1846, Laurentian Bank Financial Group is a Canada-based chartered bank that provides banking services to individuals, and small and medium-sized enterprises, as well as to independent advisors across the country and operates as a full-service brokerage firm. With ~3,300 employees, the Company provides a broad range of advice-based solutions and services to its retail, business and institutional customers. The Bank’s loan portfolio consists of personal loans, residential mortgage loans, commercial mortgage loans, and commercial loans, and finance lease receivables. Laurentian also offers financing products, such as credit cards, lines of credit, and student loans.

  • Market Cap: $1,963.5M
  • 90-Day Return: +8.9%
  • YTD-Return: +21.1%
  • 90-Day Average Trading Volume: 46,290
  • LTM Q3/19 Dividend Payout: $2.60
  • FY2016 Dividend Payout: $2.36
  • 3-Year Dividend Growth: +10%

Disclosure: Neither the author nor his family own shares in any of the companies mentioned above.

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