The Dividend Growth Story December 2011
Canadian Equity Model Portfolio Canadian Equity Model Portfolio (As of December 31st 2011): Dividend Yield: 3.41% Dividend Growth Rate: One Year: +4.5% Five Years: +7.5% 17 8 0 The BCV Asset Management Canadian Equity Model Portfolio consisted of twenty five companies at the end of December 2011. In 2011, seventeen companies increased their dividend and eight companies maintained their dividend at the same level as in 2010. This trend represents an improvement over 2010, where eleven companies increased their dividend, twelve companies maintained their dividend, and two companies decreased their dividend. The six companies that increased their dividends in 2011 after not increasing their dividend in 2010 were from the banking and mutual fund sectors. The Canadian banks which increased their dividends (Bank of Nova Scotia, Canadian Imperial Bank of Commerce, Canadian Western Bank, National Bank of Canada, Royal Bank of Canada) were able to do so because the impact of the increased capital requirements under Basel III became known, the economy continued to strengthen, and earnings continued to recover. The mutual fund company that increased its dividend (IGM Financial Inc.) was able to do so because the economy continued to strengthen and earnings continued to recover. The eight companies that did not increase their dividend in 2011 were from the banking, diversified financial services and energy sector. The one major Canadian bank that has yet resume dividend increases is Bank of Montreal, although it is widely expected that this will happen in 2012. Five of the six diversified financial services companies that have not increased their dividend (Great-West Lifeco Inc., Industrial Alliance Insurance Inc., Manulife Financial Corporation, Power Financial Corporation, and Sun Life Financial Inc.) continue to have earnings that lag pre-recession levels, as investment performance is an important component of earnings. Brookfield Asset Management Inc. and Cenovus Energy Inc. are the other companies that did not increase their dividend in 2011. A full outline of the five year history of the companies in the BCV Asset Management Canadian Equity Model Portfolio is provided on the following page.
Dividends Paid Growth Rate 2011 2010 2009 2008 2007 2006 1 Year 5 Years Bank of Montreal (BMO) 2.8000 2.8000 2.8000 2.8000 2.7100 2.2600 0.0% 4.4% Bank of Nova Scotia (BNS) 2.0500 1.9600 1.9600 1.9200 1.7400 1.5000 4.6% 6.4% Brookfield Asset Management Inc. (BAM.A) 0.5200 0.5200 0.5200 0.5100 0.4667 0.3867 0.0% 6.1% Canadian Imperial Bank of Commerce (CM) 3.5100 3.4800 3.4800 3.4800 3.1100 2.7600 0.9% 4.9% Canadian National Railway Company (CNR) 1.3000 1.0800 1.0100 0.9200 0.8400 0.6500 20.4% 14.9% Canadian Natural Resources Ltd. (CNQ) 0.3450 0.2775 0.2075 0.1925 0.1650 0.1425 24.3% 19.3% Canadian Pacific Railway Ltd. (CP) 1.1400 1.0350) 0.9900 0.9675 0.8625 0.7125 10.1% 9.9% Canadian Western Bank (CWB) 0.5400 0.4400 0.4400 0.4200 0.3400 0.2500 22.7% 16.7% Cenovus Energy Inc. (CVE) 0.8000 0.8000 0.2143 0.0000 0.0000 0.0000 0.0% N/A Fortis Inc. (FTS) 1.1600 1.1200 1.0400 1.0000 0.8200 0.6700 3.6% 11.6% Great-West Lifeco Inc. (GWO) 1.2300 1.2300 1.2300 1.2000 1.0600 0.9275 0.0% 5.8% IGM Financial Inc. (IGM) 2.0750 2.0500 2.0500 1.9475 1.7125 1.4825 1.2% 7.0% Imperial Oil Ltd. (IMO) 0.4400 0.4200 0.4000 0.3700 0.3400 0.3200 4.8% 6.6% Industrial Alliance Insurance Inc. (IAG) 0.9800 0.9800 0.9800 0.9400 0.7600 0.6000 0.0% 10.3% Manulife Financial Corporation (MFC) 0.5200 0.5200 0.7800 1.0000 0.8800 0.7250 0.0% -6.4% National Bank of Canada (NA) 2.7400 2.4800 2.4800 2.4800 2.2800 1.9600 10.5% 6.9% Power Financial Corporation (PWF) 1.4000 1.4000 1.4000 1.2950 1.1150 0.9650 0.0% 7.7% Royal Bank of Canada (RY) 2.0800 2.0000 2.0000 2.0000 1.8200 1.4400 4.0% 7.6% Saputo Inc. (SAP) 0.7000 0.6100 0.5700 0.5200 0.4400 0.3800 14.8% 13.0% Sun Life Financial Inc. (SLF) 1.4400 1.4400 1.8000 1.4200 1.2800 1.1050 0.0% 5.4% Suncor Energy Inc. (SU) 0.4300 0.3000 0.3000 0.2000 0.1900 0.1500 7.5% 23.4% TELUS Corporation (T) 2.1500 1.9500 1.9000 1.8000 1.5000 1.1000 10.3% 14.3% Tim Hortons Inc. (THI) 0.6800 0.5200 0.4000 0.3600 0.2800 0.1400 30.8% 37.2% Toronto-Dominion Bank (TD) 2.6100 2.4400 2.4400 2.3600 2.1100 1.7800 7.0% 8.0% TransCanada Corporation (TRP) 1.6600 1.5800 1.5000 1.4200 1.3400 1.2650 5.1% 5.6%
First Quarter 2011 Second Quarter 2011 Third Quarter 2011 Fourth Quarter 2011 Canadian National Railway Company paid 32 cents per share (27.5 cents). Canadian Western Bank paid 13 cents per share (11 cents) Fortis Inc. paid 29 cents per share (28 cents). National Bank of Canada paid 66 cents per share (62 cents). TELUS Corporation paid 52.5 cents per share (50 cents). Tim Hortons Inc. paid 17 cents per share (13 cents). Bank of Nova Scotia paid 52 cents per share (49 cents). Canadian Natural Resources Ltd. paid 9 cents per share (7.5 cents). Canadian Western Bank paid 14 cents per share (13 cents). Suncor Energy Inc. paid 11 cents per share (10 cents). Toronto-Dominion Bank paid 66 cents per share (61 cents). TELUS Corporation paid 52.5 cents per share (50 cents). TransCanada Corporation paid 42 cents per share (40 cents). Canadian Pacific Railway Ltd. paid 30 cents per share (27 cents). National Bank of Canada paid 71 cents per share (66 cents). Royal Bank of Canada paid 54 cents per share (50 cents). Saputo Inc. paid 19 cents per share (16 cents). TELUS Corporation paid 55 cents per share (52.5 cents). Canadian Imperial Bank of Commerce paid 90 cents per share (87 cents). IGM Financial Inc. paid 53.75 cents per share (51.25 cents). Toronto-Dominion Bank paid 68 cents per share (66 cents).
United States Equity Model Portfolio 24 0 0 The BCV Asset Management United States Equity Model Portfolio consisted of twenty four companies at the end of December 2011. In 2011, twenty three of these companies increased their dividend and one company paid a dividend for the first time (Cisco Systems Inc.). This trend represents an improvement over 2010, where eighteen companies increased their dividend, four companies maintained their dividend, and two companies decreased their dividend. A full outline of the five year history of the companies in the BCV Asset Management United States Equity Model Portfolio is provided on the following page. United States Equity Model Portfolio (As of December 31st 2011): Dividend Yield: 2.66% Dividend Growth Rate: One Year: +15.7% Five Years: +8.8%
Dividends Paid Growth Rate 2011 2010 2009 2008 2007 2006 1 Year 5 Years 3M Company (MMM) 2.2000 2.1000 2.0400 2.0000 1.9200 1.8400 4.8% 3.6% AFLAC Inc. (AFL) 1.2300 1.1400 1.1200 0.9600 0.8000 0.5500 7.9% 17.5% Becton Dickinson & Company (BDX) 1.6800 1.5200 1.3600 1.1850 1.0200 0.8900 10.5% 13.5% Cisco Systems Inc. (CSCO) 0.1800 0.0000 0.0000 0.0000 0.0000 0.0000 N/A N/A Coca-Cola Company (KO) 1.8800 1.7600 1.6400 1.5200 1.3600 1.2400 6.8% 8.7% ConocoPhillips (COP) 2.6400 2.1500 1.9100 1.8800 1.6400 1.4400 22.8% 12.9% Exxon Mobil Corporation (XOM) 1.8500 1.7400 1.6600 1.5500 1.3700 1.2800 6.3% 7.6% General Mills Inc. (GIS) 1.1700 1.0500 0.9000 0.8250 0.7600 0.6900 11.4% 11.1% Hewlett-Packard Company (HPQ) 0.4000 0.3200 0.3200 0.3200 0.3200 0.3200 25.0% 4.6% Honeywell International Inc. (HON) 1.3700 1.2100 1.2100 1.1000 1.0000 0.9075 13.2% 8.6% International Business Machines Corporation (IBM) 2.9000 2.5000 2.1500 1.9000 1.5000 1.1000 16.0% 21.4% Johnson & Johnson (JNJ) 2.2500 2.1100 1.9300 1.7950 1.6200 1.4550 6.6% 9.1% Johnson Controls Inc. (JCI) 0.6400 0.5200 0.5200 0.5200 0.4400 0.3733 23.1% 11.4% JPMorgan Chase & Company (JPM) 0.8000 0.2000 0.5300 1.5200 1.4400 1.3600 300.0% -10.1% Kimberly-Clark Corporation (KMB) 2.7600 2.5800 2.3800 2.2700 2.0800 1.9200 7.0% 7.5% McDonald s Corporation (MCD) 2.5300 2.2600 2.0500 1.6250 1.5000 1.0000 11.9% 20.4% Medtronic Inc. (MDT) 0.9350 0.8600 0.7850 0.6250 0.4700 0.4125 8.7% 17.8% Microsoft Corporation (MSFT) 0.6800 0.5500 0.5200 0.4600 0.4100 0.3700 23.6% 12.9% PepsiCo Inc. (PEP) 1.9900 1.8600 1.7500 1.6000 1.3500 1.1200 7.0% 12.2% Procter & Gamble Company (PG) 2.0568 1.8854 1.7200 1.5500 1.3600 1.2100 9.1% 11.2% Teva Pharmaceutical Industries Ltd. (ADR) (TEVA) 0.7849 0.6672 0.4825 0.4116 0.3261 0.2533 17.6% 25.4% United Technologies Corporation (UTX) 1.8650 1.7000 1.5400 1.3450 1.1700 1.0150 9.7% 12.9% Verizon Communications Inc. (VZ) 1.9625 1.9125 1.8550 1.7500 1.6450 1.6200 2.6% 3.9% Wells Fargo & Company (WFC) 0.4800 0.2000 0.4900 1.3000 1.1800 1.0800 140.0% -15.0%
First Quarter 2011 Second Quarter 2011 Third Quarter 2011 Fourth Quarter 2011 3M Company paid 55 cents per share (52.5 cents). Cisco Systems Inc. paid an initial dividend of 6 cents per share. General Mills Inc. paid 30.5 cents per share (28 cents). AFLAC Inc. paid 33 cents per share (30 cents). ConocoPhillips paid 66 cents per share (55 cents). Coca-Cola Company paid 47 cents per share (44 cents). Hewlett-Packard Company paid 12 cents per share (8 cents). Becton Dickinson & Com pany paid 45 cents per share (41 cents). Honeywell International Inc. paid 33.25 cents per share (30.25 cents). Johnson Controls Inc. paid 16 cents per share (13 cents). International Business Machines Corporation paid 75 cents per share (65 cents). Exxon Mobil Corporation paid 47 cents per share (44 cents). Johnson & Johnson paid 57 cents per share (54 cents). JPMorgan Chase & Company paid 25 cents per share (5 cents). Medtronic Inc. paid 24.25 cents per share (22.5 cents). Honeywell International Inc paid 37.25 cents per share (33.25 cents). McDonald s Corporation paid 70 cents per share (61 cents). Microsoft Corporation paid 20 cents per share (16 cents). Verizon Communications Inc. paid 50 cents per share (48.5 cents). Kimberly-Clark Corporation paid 70 cents per share (66 cents). PepsiCo Inc. paid 51.5 cents per share (48 cents). Procter & Gamble Company paid 52.5 cents per share (48.18 cents per share). United Technologies Corporation paid 48 cents per share (42.5 cents). Wells Fargo & Company paid 12 cents per share (5 cents).
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