Over the past several weeks, we’ve been absolutely consumed by earnings season. Thankfully, as far as the Dividend Champions are concerned, fourth-quarter results mostly made for pleasant reading.

You can find detailed analyses of individual company results in our Canadian Edge Weekly e-letter, as well as abbreviated versions of these articles starting on page 11 in this issue. In summary, all of our Dividend Champions either maintained or increased their dividends in 2016.

As longtime subscribers know, we focus our analysis on a company’s ability to sustain and grow its dividend. Some of our Dividend Champions reported lower profits for 2016, but the strength of their balance sheets and positive cash flows enabled these companies to maintain their dividends.

Suncor Energy Inc. (TSX: SU, NYSE: SU), Finning International Inc. (TSX: FTT, OTC: FINGF), and ShawCor Ltd. (TSX: SCL, OTC: SAWLF) are three cases in point. All three saw profits decline over the past two years due to the energy crash, but all three maintained their dividends. In fact, Suncor delivered a nice surprise when it boosted its dividend by 10% after announcing its latest results.

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Some of our stalwarts managed to grow their profits and dividends last year. BCE Inc. (TSX: BCE, NYSE: BCE), Toronto-Dominion Bank (TSX: TD, NYSE: TD), Brookfield Infrastructure Partners LP (TSX: BIP-U, NYSE: BIP), Canadian National Railway Co. (TSX: CNR, NYSE: CNI), Fortis Inc. (TSX: FTS, NYSE: FTS), and Inter Pipeline Ltd. (TSX: IPL, OTC: IPPLF) all fall into this category. It is almost without exception a pleasure to read the financial statements of these companies because profits, cash flows, and dividends all point in the direction of successful businesses with well-executed strategies.

“Grow or perish” is very relevant in the world of dividend investing, especially during times of rising interest rates. To that end, we would like to see dividend growth resume sooner rather than later for holdings such as RioCan REIT (TSX: REI-U, OTC: RIOCF), WestJet Airlines Ltd. (TSX: WJA, OTC: WJAFF), and K-Bro Linen Inc. (TSX: KBL, OTC: KBRLF). RioCan is one of our main concerns, and we discuss its prospects for renewed dividend growth on page 9.

The Dividend Champions Portfolio had a positive start to 2017, with a 2.3% gain in U.S. dollar terms. In fact, our returns would have been even stronger if the Canadian dollar hadn’t weakened toward the end of the February.

Over the same period, the broader Canadian market rose 2.5% in U.S. dollar terms, while the S&P 500 climbed 6.5%, and the MSCI World Equity Index (excluding the U.S.) returned 5.0%.

Over the 22 months since its inception, the Dividend Champions Portfolio managed to beat its benchmark by 7.6 percentage points as indicated in the table on page 1.

Our top performer during February was flight simulation provider CAE Inc. (TSX: CAE, NYSE: CAE), which added 8% during the month on expectations that the U.S. will boost its defense budget.

Brookfield Infrastructure Partners LP (TSX: BIP-U, NYSE: BIP) received a 7% lift after posting impressive results for the final quarter of 2016.

K-Bro Linen Inc. (TSX: KBL, OTC: KBRLF) saw a 5% gain as its prospects for growth improve with the completion of major capital projects.

A&W Revenue Royalties Income Fund (TSX: AW-U, OTC: AWRRF) was once again one of our top performers despite mediocre results. This stock has now gained 15% since we added it to the portfolio last October.

Bottom of the log for February was Sun Life Financial Inc. (TSX: SLF, NYSE: SLF), with a 6% decline. The stock had rallied strongly over the preceding months, so a correction was not unexpected. But disappointing fourth-quarter results didn’t help either.

Manulife Financial Corp. (TSX: MFC, NYSE: MFC) also retreated during February, as investors digested the heavy gains of the past few months.

Cineplex Inc. (TSX: CGX, OTC: CPXGF) dropped 4% during February after posting poor fourth-quarter results. We haven’t given up on this high-quality operation, but the stock’s rich valuation has kept us from increasing the small position in the Dividend Champions Portfolio.

Overall, the Dividend Champions Portfolio’s strong return has boosted its performance since inception to within our targeted range of 8% to 15% annually. Although there’s more work to be done, we’re comfortable that a portfolio of holdings that yield 3.5% and are forecast to grow dividends 6% annually should enable us to meet our long-term objective.

There were no changes to the portfolio in February.