Dividend News for the Week Ending July 13, 2018

The week ending July 13, 2018, had 7 minor announcements, and one tragic one, in the dividend space.

AltaGas Ltd.

Ticker ALA.TO
Amount $0.18
Projected Annual Dividend for 2018 $2.18
Record Date July 25, 2018
Payment Date August 15, 2018
Market price as of July 13, 2018 $28.02
Forward Yield 7.79%
CAGR (since inception) 4.37%
CAGR (since 2011) 7.33%

AltaGas, a Canadian corporation, is a North American diversified energy infrastructure business with a focus on owning and operating assets to provide clean and affordable energy to its customers. AltaGas’ business strategy is underpinned by strong growth in natural gas supply and the growing demand for clean energy. (Source: Company filings)

AltaGas has been paying a dividend since before 2004, and its most recent hike was in January of this year. However, while it has paid back its shareholders 2004, it started off as an income paying trust, and made a conversion to a dividend paying corporation in 2011. The change to a dividend paying corporation necessitated a decrease in the overall payment. Measured since 2004 the CAGR is 4.37%, but for a more practical comparison we should measure the CAGR since converting to a corporation, which puts it at 7.33%.

Alimentation Couche-Tard Inc.

Ticker ATD-B.TO
Amount $0.10
Projected Annual Dividend for 2018 $0.39
Record Date July 18, 2018
Payment Date August 1, 2018
Market price as of July 13, 2018 $62.80
Forward Yield 0.62%
CAGR (since 2006) 22.25%

Couche-Tard is the leader in the Canadian convenience store industry. In the United States, it is the largest independent convenience store operator in terms of the number of company-operated stores. In Europe, Couche-Tard is a leader in convenience store and road transportation fuel retail in the Scandinavian countries (Norway, Sweden and Denmark), in the Baltic countries (Estonia, Latvia and Lithuania), and in Ireland and also with an important presence in Poland. (Source: Company filings).

Having paid a modest dividend since 2005, the firm has increased its dividend every year except for the year following the 2008 financial crisis, which makes this company is A2+ rated dividend payer. CAGR is a lofty 22.25%, but this isn’t without a price: the forward yield is a paltry 0.62% based on the current stock price. Assuming the firm increases its dividend again in the next 12 months, it will raise to an A3+ rated firm.

Boston Pizza Royalties Income Fund

Ticker BPF-UN.TO
Amount $0.12
Projected Annual Dividend for 2018 $1.38
Record Date July 21, 2018
Payment Date July 31, 2018
Market price as of July 13, 2018 $19.38
Forward Yield 7.12%
CAGR (since 2002) 7.13%

Boston Pizza is Canada’s No. 1 casual dining brand with more than 390 mainly franchised restaurants in Canada serving more than 100 unique and delicious menu items such as gourmet pizzas and pastas, juicy burgers and our famous BP wings. Annually, Boston Pizza serves more than 50 million guests, and has annual gross sales of $1.1 billion. Boston Pizza has proudly been recognized as one of Canada’s 50 Best Managed Companies since 1994, achieving Platinum Member status since 2001. (Source: Company filings).

While CAGR is an impressive 7.13%, growth has been flat with no increases since 2015. The yield also raises flags for concern as it is creeping north of 7%.

Brookfield Real Estate Services Inc.

Ticker BRE.TO
Amount $0.11
Projected Annual Dividend for 2018 $1.35
Record Date July 31, 2018
Payment Date August 31, 2018
Market price as of July 13, 2018 $19.30
Forward Yield 6.99%
CAGR (since 2004) 1.47%

Brookfield Real Estate Services Inc owns Franchise Agreements and Trademark Rights of residential real estate brands in Canada. The Company’s brand include Royal LePage, Johnston & Daniel and Via Capitale. (Source: Company Filings)

Callidus Capital Corporation

Ticker CBL.TO
Amount
Projected Annual Dividend for 2018 $0.60
Record Date July 13, 2018
Payment Date July 13, 2018
Market price as of July 13, 2018 $3.77
Forward Yield 15.92%
CAGR (since 2015) 19.68%

Established in 2003, Callidus Capital is a publicly traded, specialty debt fund that provides capital on a bridge basis to meet the financing requirements of companies that cannot access traditional lending sources.

Callidus was shaping up to be a strong dividend contender. Having announced its first dividend in 2015, it was showing consistent growth the past 24 months. However, on Friday the 13th (!!) they cancelled their dividend; the cut shaved 28% off of the company’s stock price, hence the astronomical forward yield.

Inter Pipeline Ltd.

Ticker IPL.TO
Amount $0.14
Projected Annual Dividend for 2018 $1.68
Record Date July 23, 2018
Payment Date August 15, 2018
Market price as of July 13, 2018 $25.25
Forward Yield 6.65%
CAGR (since 1999) 5.21%

Inter Pipeline is a major petroleum transportation, natural gas liquids processing, and bulk liquid storage business based in Calgary, Alberta, Canada. Inter Pipeline owns and operates energy infrastructure assets in western Canada and Europe. Inter Pipeline is a member of the S&P/TSX 60 Index and its common shares trade on the Toronto Stock Exchange under the symbol IPL. (Source: company filings)

IPL has been paying distributions since 1997, and it came out swinging in 1998 before stabilizing its dividend in 1999. Since then it has proven to be a solid contender, with a 5.21% CAGR over the past 20 years. Since it froze its dividend twice over that timeframe it is only a A2B4 rated stock at the moment. In any case, with a forward yield of 6.65%, and having increased its dividend every year for the past 10 years, it would be a worthwhile addition to a portfolio.

Keyara Corp.

Ticker KEY.TO
Amount $0.14
Projected Annual Dividend for 2018 $1.68
Record Date July 23, 2018
Payment Date August 15, 2018
Market price as of July 13, 2018 $37.18
Forward Yield 4.52%
CAGR (since 2003) 11.74%

Keyera Corp is a midstream energy company. It is engaged in gathering, processing, and fractionation of natural gas in western Canada; storage and transportation of crude oil and natural gas byproducts; and marketing of natural gas liquids. (Source: Company Filings)

Having increases its dividend every year since 2003, with only one year of no growth, Keyera is an A3 rated dividend company. At a forward yield of 4.52%, it is still moderately overpriced, but if you are looking for an energy player with a strong history, this may fit the bill.

Crius Energy Trust

Ticker KWH-UN.TO
Amount $0.07
Projected Annual Dividend for 2018 $0.84
Record Date September 30, 2018
Payment Date October 15, 2018
Market price as of July 13, 2018 $6.28
Forward Yield 13.32%
CAGR (since 2012) 35.93%

Crius Energy Trust through its subsidiaries engages in the sale of electricity and natural gas to residential and commercial customers under variable price and fixed-price contracts. (Source: TSX)

Crius has paid a dividend since 2012. There was a slight spike in 2013 but this may be attributed to the fact that their first dividend was only for December 2012, so they were “smoothing out” payments over time. Since then it has remained relatively stable, albeit not always increasing.

K Bro Linen Inc.

Ticker KBL.TO
Amount $0.10
Projected Annual Dividend for 2018 $1.20
Record Date July 31, 2018
Payment Date August 15, 2018
Market price as of July 13, 2018 $38.40
Forward Yield 3.13%
CAGR (since 2007) 0.79%

From the company website:

K‑Bro was founded in 1954 as Stork Diaper Service and later grew to meet the needs of the healthcare and hospitality industries. To better reflect the company’s evolving role and in honor of its founders – the Kinasewich brothers, the name was changed to K‑Bro Linen Systems Inc. in 1984. Today, K‑Bro is the largest provider of laundry and linen services in Canada meeting the needs of healthcare, hospitality and other commercial sectors. K-Bro employs 1600 people across Canada at processing facilities located in Victoria, Vancouver, Calgary, Edmonton, Regina, Toronto, Montreal and Quebec City.

K‑Bro provides an extensive menu of services that go beyond basic laundry services. These include reusable OR pack services (KOR Services), resident personal clothing programs, specialty linen purchasing, various textile testing and extensive customer site-based services, including floor-to-floor distribution and linen room management.

K-Bro has a B2 dividend rating based on my analysis and has been relatively flat the past four years. At this point, there is nothing special about this dividend payer.

Onwards and upwards!

 


Aecon Group’s Buy-out is an instant 22% Gain!

Back in May I wrote a review on Aecon Group, and recommended it as a buy. Following my own advice, since then I have been purchasing shares on dips in both my TFSA and corporate accounts. It seems that I wasn’t the only one that thought Aecon was under valued, and a worthy investment, because CCCC International Holding Limited (CCCI) has offered to purchase Aecon Group at a price of C$20.37/share!

From the Aecon Group press release:

  • All-cash consideration of $20.37 per share; 42 per cent premium to unaffected share price
  • Aecon gains access to new platforms and partnerships for continued growth in Canada and abroad; CCCI advances its global growth strategy
  • New growth and employment opportunities expected as Aecon gains significant capabilities and financial strength by joining the world’s largest network of engineering and construction companies
  • Aecon will retain its name, continue to be Canada-headquartered and led by its Canadian management team
  • Aecon and CCCI share a strong commitment to maintaining customer service excellence and a safety-first culture
  • Aecon board of directors unanimously recommends transaction to shareholders

This is great news for me. My adjusted cost basis is $16.67, and with an offering price of $20.37 that nets me a healthy 22.20% gain!

I had originally purchased Aecon for its strong dividend growth—21% compounded annually since 2007—and great underlying fundamentals, and I will be sad to see a solid dividend payer go away. However, given the capital gains attached to the sale, this is a great win. What makes things even better is that half of my holdings are in my TFSA, which means that the 22.20% gain is tax-free.

All in all, a great way to end October; this was certainly a treat!


It’s been a long time, baby.

It’s been about five months since my last post, and likewise, about five months since I last looked at any of my investments. Thankfully, my investment strategy is focused on long-term holdings, and as such does not require me to constantly monitor the markets on a day by day basis.

That said, I have made on investment recently in the Class B shares of Dorel Industries, and the analysis will be posted shortly. For the next month this blog may also see some non-investing articles, as I may post some material for one of my classes at the Rotman School of Management. However, even though they are not directly related they will still be relevant to analyzing companies and how they operate vis-à-vis providing value to investors.

Until then, happy investing!


Hello, World.

I have been an avid follower of Dividend Growth Investor for the past few years as I have become more interested in investing, but as DGI is a US based investor many of the recommendations and analyses are based on US stocks. However, given that imitation is the sincerest form of flattery, and that securities analysis is something that I also do when I am interested in a company, I figured I’d start up my own blog.

Lo and behold, some of the popular names such as Canadian Dividend Investor and Canadian Dividend Investing were taken, albeit both of those sites have zero content. “Canadian Dividend Growth Investor” would work 100%, but it is a little lengthy. So, what’s the next best thing? A Dividend Gangster, of course. Haha.

Stay tuned for more!