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2020 Canadian Dividend Aristocrat Index Requirements

2020 Canadian Dividend Aristocrat Index Requirements

For years, dividend investing has been a popular strategy among Canadian investors. For a dividend investor, the focus is on stable companies that consistently return a share of profits in the form of dividends. Not only do dividends make up a large part of the stock market return, but the companies that pay consistent dividends also tend to experience less volatility.

In Canada, the top dividend-paying stocks have their own index, the Canadian Dividend Aristocrats. Investors can use this index to select individual stocks for their dividend portfolio, or they can purchase the entire index using an ETF, specifically the iShares S&P/TSX Canadian Dividend Aristocrats Index ETF (CDZ). The companies in the Dividend Aristocrats Index have consistently raised their dividends for years, and here at MapleMoney, it serves as a primary source for our list of Top 100 Canadian Dividend Stocks for 2020.

About the Canadian Dividends Aristocrats Index

Before revealing this list of top Canadian dividend stocks across all sectors, let’s take a closer look at how the list is compiled and managed by reviewing the index objective, eligibility, as well as the annual rebalancing process.

Index Objective

According to the S&P, the Canadian Dividend Aristocrats Index is designed to measure the performance of companies included in the S&P Canada Broad Market Index (BMI) that follows a “managed-dividends policy of increasing dividends”. The index is reviewed and rebalanced every January.

Index Eligibility

The following criteria must be satisfied in order for a company to be considered a Dividend Aristocrat, and be included in the DA Index.

  1. Must be a common stock or income trust listed on the Toronto Stock Exchange and also a constituent of the S&P BMI Canada.
  2. Must have increased its regular cash dividend every year for five years, although it can maintain the same dividend for no more than two consecutive years within the five year period.
  3. The float-adjusted market capitalization of the security must be at least $300 million at the time of review (January).
  4. For new additions to the index, companies must have increased their dividend in the first year of the prior five years. This does not apply to current members of the index.

Annual Rebalancing

Every January, the index is rebalanced, using a reference date of the last trading date in December. Changes to the index membership take place after the close of the last business day in January, based on the rebalancing done during the month. A company is added to the index during the rebalancing period providing that it meets the criteria outlined above. There is no cap on the maximum number of companies in the index, ensuring that all qualify. If a company fails to meet one or all of the above eligibility guidelines during the annual rebalancing period, they are deleted from the list. The index methodology includes concentration limits. During rebalancing, modifications ensure that no individual stock comprises more than 8% of the overall index weight.

Why Should I Hold Dividend Aristocrat Stocks In My Portfolio?

Canadian Dividend Aristocrats offers advantages that riskier growth stocks don’t. For instance:

  1. Dividend Aristocrats are stocks that you can buy, hold and collect dividends from. There is no need to check daily price movements.
  2. Dividend Aristocrats are generally blue chip companies with stable income streams. These companies have a steady cash flow and have a record of returning profits to their shareholders.
  3. These firms generally exhibit lower stock price volatility while delivering attractive and even superior returns.

Without further ado, here is the Canadian Dividend Aristocrat list for 2020, in alphabetical order:

Canadian Dividend Aristocrats (TXDV Index)

NameSymbolPriceP/E (ttm)EPS (ttm)Trailing Annual DividendDividend Yield
Aecon Group IncARE11.710.451.120.584.96%
Alaris Royalty CorpAD7.527.670.981.6521.94%
Algonquin Power and Utilities CorpAQN17.64121.040.553.12%
Alimentation Couche-Tard Inc Cl B SvATD.B32.84N/A1.840.511.55%
Allied Properties Real Estate Inv TrustAP.UN42.347.595.581.63.78%
Atco Ltd Cl.I NVACO.X35.347.914.471.624.58%
Bank of MontrealBMO66.957.658.754.126.15%
Bank of Nova ScotiaBNS54.598.026.813.546.48%
BCE IncBCE56.7316.833.373.175.59%
Boralex IncBLX24.09N/A-0.430.662.74%
Boyd Group Services IncBYD137.2836.173.80.540.39%
Brookfield Asset Management Inc Cl.A LvBAM.A40.924.921.160.431.05%
Cae IncCAE15.8711.931.330.422.65%
Canadian Imperial Bank of CommerceCM76.626.8311.225.687.41%
Canadian National Railway Co.CNR107.7318.485.832.152.00%
Canadian Tire Corporation Cl A NVCTC.A81.597.3311.134.014.91%
Canadian Utilities Ltd Cl.A NVCU31.629.763.241.695.34%
Capital Power CorpCPX23.9233.220.721.867.78%
Ccl Industries Inc Cl B NVCCL.B40.2615.142.660.681.69%
CDN Apartment UnCAR.UN41.235.497.511.373.32%
CDN Natural ResCNQ18.784.144.541.57.99%
CDN Western BankCWB17.87N/A3.111.126.27%
Chartwell Retirement ResidencesCSH.UN8.541705.270.010.67.03%
Choice Properties REITCHP.UN12.65N/A-1.870.745.85%
Cogeco Communications IncCCA94.1513.378.642.162.29%
Cogeco Inc SvCGO83.611.249.131.772.12%
CT Real Estate Investment TrustCRT.UN11.649.761.190.766.53%
Dollarama IncDOL38.5121.631.780.180.47%
Emera IncorporatedEMA52.0318.852.762.384.57%
Empire Company LimitedEMP.A27.814.33N/A0.471.69%
Enbridge IncENB39.615.062.632.957.45%
Enerflex LtdEFX5.983.541.690.437.19%
Enghouse Systems LimitedENGH42.332.291.310.511.21%
Equitable Group IncEQB49.874.1711.971.292.59%
Exchange Income CorpEIF16.566.652.492.2313.47%
Fiera Capital CorpFSZ5.55N/A-0.140.8415.14%
Finning IntlFTT14.9410.091.480.825.49%
Firstservice CorpFSV99.5N/A-6.580.60.60%
Fortis IncFTS51.0813.513.781.833.58%
Franco-Nevada CorpFNV152.8459.11.830.990.65%
Genworth MI Canada IncMIC26.865.464.922.077.71%
Gildan Activewear IncGIL17.779.91.270.543.04%
Goeasy LtdGSY30.057.214.171.244.13%
Granite Real Estate Investment TrustGRT.UN55.147.87.072.815.10%
Great-West Lifeco IncGWO21.678.692.491.657.61%
Imperial OilIMO16.975.892.880.855.01%
Industrial Alliance Ins & Fin Srv IncIAG38.946.086.41.774.55%
Innergex Renewable Energy IncINE17.93N/A-0.250.73.90%
Intact Financial CorpIFC128.1225.225.083.042.37%
Inter Pipeline LtdIPL8.196.251.311.7120.88%
Interrent Real Estate Investment TrustIIP.UN12.613.983.170.292.30%
Intertape PolymerITP9.489.580.70.586.12%
Keyera CorpKEY13.076.312.071.8514.15%
Laurentian BankLB28.257.913.572.649.35%
Loblaw COL72.4824.992.91.241.71%
Magna International IncMG41.065.25.591.463.56%
Manulife FinMFC16.045.792.7716.23%
Maple Leaf FoodsMFI24.9741.620.60.582.32%
Methanex CorpMX18.5112.971.011.417.62%
Metro IncMRU57.7121.72.660.81.39%
Mty Food Group IncMTY17.545.693.080.663.76%
National Bank of CanadaNA50.827.816.512.725.35%
New Flyer Industries IncNFI1410.650.931.299.21%
Onex CorpONEX48.810.8142.740.280.57%
Open Text CorpOTEX48.1328.151.210.681.41%
Osisko Gold Royalties LtdOR10.67N/A-1.550.21.87%
Parkland Fuel CorpPKI24.369.552.551.194.89%
Pembina Pipeline CorpPPL24.629.622.652.369.59%
Power Corporation of Canada SvPOW20.17.942.531.67.96%
Premium Brands Holdings CorpPBH72.6931.062.342.12.89%
Quebecor Inc Cl.B SvQBR.B30.1113.882.550.391.30%
Richelieu Hardware LtdRCH21.6118.311.180.251.16%
Ritchie Bros Auctioneers IncRBA49.5125.761.360.761.54%
Royal Bank of CanadaRY82.089.1294.145.04%
Saputo IncSAP34.5722.31.550.671.94%
Savaria CorpSIS10.0218.910.530.434.29%
Secure Energy Services IncSES1.17118.330.010.2723.08%
Sleep Country Canada Holdings IncZZZ9.496.371.490.778.11%
Smartcentres Real Estate Investment TrustSRU.UN17.969.681.861.8110.08%
Stantec IncSTN36.9221.221.740.581.57%
Stella Jones IncSJ29.8212.582.370.561.88%
Summit Industrial Income REITSMU.UN8.056.31.280.536.58%
Sun Life Financial IncSLF42.439.644.42.14.95%
Suncor Energy IncSU22.9812.351.861.687.31%
Tc Energy CorpTRP60.6514.24.2734.95%
Telus CorpT22.2815.371.451.135.07%
Tfi International IncTFII29.187.683.630.983.36%
The North West Company IncNWC21.4313.231.621.316.11%
Thomson Reuters CorpTRI93.7921.273.111.441.54%
Toromont IndTIH59.2416.973.491.081.82%
Toronto-Dominion BankTD55.798.476.592.965.31%
Transalta Renewables IncRNW13.8620.380.680.946.78%
Transcontinental Inc Cl A SvTCL.A11.797.211.650.897.55%
Uni Select IncUNS4.54N/A-0.470.286.17%
Weston GeorgeWN101.2280.331.262.092.06%
*Data as of April 3, 2020

Dividend Aristocrats ETF

Instead of purchasing individual stocks from the Canadian Dividend Aristocrat Index, you can purchase the entire index with an ETF. The iShares S&P/TSX Canadian Dividend Aristocrats Index ETF (CDZ) is meant to mirror the overall Canadian DA Index, less any fees and expenses. The MER is .66%, very reasonable and much lower than your typical actively managed Canadian dividend fund. The ETF is ideal for anyone looking to match the average return, and who prefers an automatic, hands-off approach to investing. It’s also good for smaller portfolios, in that it achieves diversification regardless of the purchase amount.

Final Thoughts on Dividend Investing in 2020

Whether you prefer individual stocks or ETF investing, the Canadian Dividend Aristocrats Index makes it easy to hold the highest-quality dividend companies that Canada can offer. For additional reading, make sure you check out our list of the Top 100 Canadian Dividend Stocks for 2020, which is made up of stocks from the DA Index, as well as the Simply Investing Report.

Comments

  1. Steve East

    Thank You very much for enlightening me on the DA ETF.
    I am retired from BCE and would like some diversification from just holding BCE shares.
    Cheers,
    Steve

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