All our Dividend Champions have now reported quarterly results. If you wish to read more about the individual company results, you can check the Canadian Edge Weekly, stored for your reading comfort on the CE website.

Despite some companies reporting profits sharply lower than last year, not one of our Champions lowered or omitted their dividends. This is a key quality when we select these stocks – the ability to sustain dividends even when business conditions are tough. Strong balance sheets, good cash flow and low payout ratios are all elements shared by the Champions.

The average dividend increase among the Champions for the past 12 months was 5.9%, with the top dividend performance coming from Canadian National Railway: its dividend is 23% higher than last year. Another 12 companies increased their dividends by more than 5%, which is at least double the rate of inflation and implies income growth in real terms.

We also find it instructive to break the portfolio down into categories that combine yield and growth characteristics. First, our “sweet spot” group contains the companies that have a 2016 dividend yield between 3% and 5%, with dividend growth of 5% to 10%. This group provides much stability to the portfolio and include names such as BCE, Brookfield Infrastructure, Fortis, Inter Pipeline, North West Company, Sun Life Financial and Telus.

A second group contain potential “problem children” with low yields and dividends not growing fast enough to compensate for the low yield. K-Bro Linen and Shawcor fall into this group. We will hold onto these stocks, as we believe that dividend growth will resume in 2017 or 2018 for both companies.

A third group contains our high yielders that have little or no growth. RioCan is the sole stock in this category. We also note that the REIT has not increased its dividend since January 2013. However, we remain hopeful that the large windfall profit the REIT enjoyed from the sale of its U.S. property portfolio will contribute to an increase in the dividend later this year or in 2017.

The table indicates the latest dividend details for our Dividend Champions.