The Motley Fool

Hunting for Yield? Look No Further Than These 3 Dividend All-Stars

You can stop hunting for yields and simplify the process by focusing on the dividend all-stars or the Canadian companies that have increased the dividend for five or more calendar years in a row.

Canadian Western (TSX:CWB), Finning International (TSX:FTT), and Telus (TSX:T)(NYSE:TU) have been rewarding investors with dividend growth for the last 15 years.

One small bank — one monster dividend machine

Canadian Western is a tiny bank but a monster when it comes to dividend payments. This $2.91 billion provider of personal and business banking products in Western Canada has a dividend streak of 27 years.

This small bank generates stable profits like a big bank. Canadian Western is on track to improve its 2018 fiscal year revenue by 5.72% and net income by 7.39%. Performance-wise, the gain of the stock so far this year is 31.51%. The growth estimate for 2020 is 6.3%.

As a regional bank, it holds no dominant industry position. But over the last few years, Canadian Western has maintained low loan losses despite high exposure to the mortgage market.

The stock pays a dividend of 3.38% with a low payout ratio of 35.45%. If Canadian Western performs true to form as projected, the dividend can increase in the coming years.


Finning has yet to post gains this year, although it has managed to trim down losses to 4.35% as of this writing. This $3.62 billion heavy equipment company is underperforming because of the general weakness of the sector rather than profitability issues.

Based on the current run rate, the company is poised to end 2019 with a 7.83% increase in revenue versus 2018 but with a 15.5% decrease in net income due to the lower gross margins. In any case, next year’s growth estimate is 12.9% with a potential bounce-back of 19.3% annually for the next five years.

Finning has been operating since 1933 and is in the business of selling, servicing, and renting heavy equipment, engines, and related products in Canada. It also serves the markets in South America, Ireland, and the United Kingdom. Clients are in various industries, including mining, and construction, among others.

Its dividend streak of 17 years makes Finning a dividend all-star. The 3.73% yield is safe, so you can also expect a stable income stream in the 17 years.

Game-changing 5G

Telus, the third-largest telecom provider in Canada, is a practical choice of dividend investors. Apart from being a recession-proof stock, it has been paying dividends for 15 consecutive years.

The total return on a $10,000 investment made 20 years ago is 530.56%, including reinvestment of dividends. With Telus’ yield of 4.9%, your gains could be higher.

Telus is suited to low-risk investing appetites. It offers safety and capital preservation. The dividends are safe even if this telecom provider maintains a single-digit annual growth in the next five years.

A growth catalyst is coming in 2020 with the commercial launch of the mobile 5G. According to Telus, Vancouver would be the first to experience the most cutting-edge wireless technology in the world. Canadians can access the internet 10 times faster with 5G.

Long-term partners

Dividend all-stars can significantly improve your financial standing. Cut to the chase and limit your choices to Canadian Western, Finning, and Telus, all of which are long-time partners of dividend investors.

5 TSX Stocks for Building Wealth After 50

BRAND NEW! For a limited time, The Motley Fool Canada is giving away an urgent new investment report outlining our 5 favourite stocks for investors over 50.

So if you’re looking to get your finances on track and you’re in or near retirement – we’ve got you covered!

You’re invited. Simply click the link below to discover all 5 shares we’re expressly recommending for INVESTORS 50 and OVER. To scoop up your FREE copy, simply click the link below right now. But you will want to hurry – this free report is available for a brief time only.

Click Here For Your Free Report!

Fool contributor Christopher Liew has no position in any of the stocks mentioned. Finning is a recommendation of Stock Advisor Canada. Finning International is a recommendation of Stock Advisor Canada.

I consent to receiving information from The Motley Fool via email, direct mail, and occasional special offer phone calls. I understand I can unsubscribe from these updates at any time. Please read the Privacy Statement and Terms of Service for more information.