Canadian Dividend Investors
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Dividend Safety
...what you really must know, and all you really must know
is what's happening to the dividend.
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Lowell Miller
Lowell Miller was the president and lead portfolio manager of Miller/Howard Investments Inc. and was a professional money manager for over thirty years. To minimize the risk that a company’s dividend payments could be cut or discontinued, Miller suggests you consider four questions as discussed below. Your answers to these questions will govern your decision as to whether you want to invest in the company or, if you already own shares, whether you want to continue to hold the company in your portfolio.
Is the dividend in jeopardy?
As a general rule, the total annual dividend paid by the company should always be less than the annual earnings. The annual earnings and dividends for Sun Life Financial are highlighted in Figure 1, which is portion of the Value Line report for the company, dated October 31, 2025.
As shown, in every year since 2012, the company's earnings have been significantly higher than the cash dividends paid to the shareholders. Management has the option of using the excess earnings to add to the company's retained earnings or to pay down any company debt.
Figure 1: The earnings and dividends for Sun Life Financial as reported in the Value Line report dated October 31, 2025.
2) Has the company changed its dividend policy?
No, the financial data shows that since 2015, company management has continued to increase the dividend payments each year.
3) Has the company failed to raise its dividend?
No, the Value Line report shows that the company has raised its dividend every year since 2015.
4) Has the company cut its dividend?
The Value Line data shows that the company has not cut its dividend since 2008, although it did not begin to increase the dividend until 2015.
Based on the foregoing information, it is reasonable to conclude that the dividends paid by Sun Life Financial are unlikely to be cut or discontinued, at least in the foreseeable future. However, it would be important to monitor the company’s quarterly and annual reports on an ongoing basis to confirm that its financial success can be expected to continue.
1. Lowell, L. 2006. The Single Best Investment, Creating Wealth with Dividend Growth. The Print Project, P.O. Box 703, Bearsville, NY 12409, 2nd Ed., p.160