The reporting season is almost done here in Canada, and with one exception our Dividend Champions delivered as we expected. The accompanying table shows the year-over-year growth in dividends based on the most recent announcements of the companies in the portfolio (including those stocks sold since Jan. 1, 2016).

After the most recent dividend declarations, the average annual dividend growth of the portfolio holdings was 5%, although that number was dragged down by the large cut in the Potash Corp. dividend. Nevertheless, we were satisfied that all our holdings, except Potash Corp. (and Husky, which was sold last year) either maintained or increased their dividends the past year. This is a key strand of our dividend-based investment strategy because companies that maintain and grow their dividends should also experience share price growth over time.

For the next two years we expect dividends to grow 7% per year for the overall portfolio. At the top of the growth pile are Canadian National Railways (TSX: CNR, NYSE: CNI), Inter Pipeline (TSX: IPL, OTC: IPPLF) and Sun Life Financial (TSX: SLF, NYSE: SLF), with dividend growth of 10% or more per year. More moderate growth of between 5% and 10% per year is expected from the bulk of the holdings, including BCE Inc. (TSX: BCE, NYSE: BCE) and North West Company (TSX: NWC, NWTUF).

Last month we summarized the first batch of quarterly results that came out early. Here are summaries of a second tranche of company reports. Please note that a full analysis of the company results is published weekly in the Maple Leaf Memo.

Loyalty card operator Aimia Inc. (TSX: AIM, OTC: GAPFF)  announced fourth-quarter results that impressed some investors; the share price moved up almost 10% in the days following the announcement.

Although management painted a fairly favorable outlook for 2016, we are becoming increasingly concerned that the company operates in a highly competitive field with little pricing power.

Despite the attractive dividend yield of 8.9%, we have decided to sell the small holding from the Dividend Champions Portfolio. 

Toronto Dominion Bank (TSX: TD, NYSE: TD) delivered a solid 5% increase in earnings per share for the first quarter of the 2016 fiscal year. For good measure the dividend increased 8%.

Growth prospects for the Canadian banks are muted in 2016, but we believe that TD Bank is well positioned because of its growing U.S. franchise and the relatively low exposure to the oil and gas sector. With the dividend yield now 4.2% and a price-to-earnings ratio of 11 times for 2016, we believe that the modest growth prospects and credit risks are well discounted.

The final quarter and full-year 2015 results of Fortis Inc. (TSX: FTS, OTC: FRTSF) made for pleasant reading as adjusted earnings per share increased 13% and 21% for the quarter and year, respectively. The full-year dividend was raised 9.4%.

Fortis intends to grow its dividend 6% per year until 2020, extending the 40-plus years of uninterrupted dividend growth. This is currently our favorite Canadian utility. It has a dividend yield of 3.8% and a fair value of C$42 or US$31.

TMX Group Ltd. (TSX: X, OTC: TMXXF) delivered weak results for the final quarter of 2015, with adjusted earnings per share declining 6% compared with the same quarter the previous year and 5% for the full year. The quarterly dividend was held unchanged at C$0.40 per share, and the full-year dividend amounted to C$1.60 per share, the same as in 2014.

The stock is inexpensive relative to its peers (TMX is now one of the cheapest stock exchanges in the world), and the sustainable dividend yields almost 4%. This, combined with the weak Canadian dollar, may make it an attractive target for a potential acquisition by a foreign entity. We estimate the fair value at C$44 or US$33.

ManuLife (TSX: MFC, NYSE: MFC) reported a 15% quarterly increase in core earnings per share, excluding investment gains, and a 12% gain for the full year. The dividend was raised again and is now 19% higher than last year.

Profit guidance from the company’s management was weaker than market analysts expected,   which led to a sharp sell-off in the stock.

The company trades on an attractive 3.9% dividend yield and below book value. We estimate fair value at C$20 or US$15.

Telus Corp. (TSX:T, NYSE: TU) reported adjusted quarterly earnings per share that were 4% higher than the previous year while the dividend was raised 10%.

Management expects 2016 earnings per share to increase between 5% and 12% and has previously indicated that it intends to raise the dividend 10% per year until 2016. Given the elevated debt levels and ongoing large capital expenditures, we would not be surprised to see the board guiding to lower dividend growth after 2016.

The 2016 dividend yield is 4.5%, and other measures indicate the stock is reasonably valued. We estimate the stock’s fair value at C$49 or US$37.

TransCanada Corp. (TSX: TRP, NYSE: TRP) reported that fourth-quarter operating earnings per share were 11% lower than the year before. For the full year, the operating earnings increased 2.5%. The dividend per share was raised 9%.

For 2016, management expects higher profits thanks to new pipelines in Mexico, the higher investment base for the NGTL system and some cost savings resulting from a corporate reorganization. The dividend is expected to grow between 8% and 10% per year until 2020. The dividend yield for the stock is 4.6%, and we estimate the fair value at C$52 or US$39.

Whistler Blackcomb Holdings (TSX: WB, OTC: WSBHF) benefited greatly from prime ski conditions and the weaker loonie posting record fiscal first-quarter results. Somewhat surprisingly, the dividend was maintained at C$0.24375 per share.

Revenue for the quarter increased 22%, and with costs well contained, the adjusted earnings before interest, taxes and depreciation skyrocketed 68% compared with the same quarter last year. It should be said that the 2014 to 2015 snow and ski season was particularly poor and is a low base for comparison.

With the stock’s dividend yield 3.7%, we will want to see the dividend grow to support ongoing improvement in the share price. This could well happen later in the year if the bumper ski season continues. We estimate fair value at C$23 or US$17.

CI Financial (TSX: CIX, OTC: CIFAF) reported adjusted earnings per share for the fourth quarter that were 1.2% higher than the previous year. For the full year the adjusted earnings per share was up 8.4%. The dividend for the full year rose 9.2%.

The balance sheet remains strong and the cash flow is solid. The valuation indicates a price-to-earnings ratio of 14.3 times and an attractive dividend yield of 4.7%. The fair value is C$35 or US$26.

Sun Life Financial (TSX: SLF, NYSE: SLF) reported strong results for the fourth quarter, with underlying net income (which excludes market-related gains and losses) per share 78% higher than the same quarter the previous year. For the full year the income per share was 27% higher while the dividend was 7.6% compared with the previous year.

The stock’s valuation is attractive with a dividend yield of 4.1%, and we estimate the fair value at C$49 or US$37.