Canadian Dividend Investors
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Dividend Growth
...even among professional money managers managing billions of dollars, those who employ the least complicated approaches are often the ones who produce the best results.
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Robert Cable
Robert Cable has worked as an investment advisor for over 40 years. He and his team have conducted extensive research into the behaviour of the Toronto Stock Exchange and he has written extensively about investing. His articles have appeared in numerous financial publications in both Canada and the United States. Apparently, he also loves puppies, so he must be a nice guy. The following chart was adapted from a chart presented by Robert Cable (2015).
Cable summarized data from several sources which analyzed the performance of the 250 companies included in the S&P/TSX Composite Index, from 1986 to 2014, a time interval of 28 years.
As indicated on this chart, (which has been modified from Figure 7-1 on page 69 in Cable's book), those companies included in the Index that had a record of paying growing dividends, achieved compound annual growth rates in their share prices that were almost twice as high as the growth rate of the Index itself. His research also found that the subset of companies from the Index that did not pay dividends, grew at a rate of 1% per year, over the same time period, a rate that was less that the rate of inflation.
The conclusion from Cable's research is clear, you should own the common shares of companies that have a record of growing their dividends and are expected to continue to do so.
1. Cable, R.S. 2015. Inevitable Wealth, Two low-risk strategies that combine to create extraordinary wealth. Waterford Weir Inc. Mississauga, ON. p 69.