Canadian Dividend Reinvestment Plans (DRIPs)

There have been many changes over the past year to TSX indexes that track Canadian dividend paying companies.

First, the people at Mergent's have decided to remove their list of dividend achievers from their public website. This was an invaluable list to people wishing to buy companies with an excellent track record of dividend payments. (Note: If I am wrong in saying Mergent's has removed their list, could readers please reply with the link to the new page. Thanks!)

Second, in December 2009 the other major dividend index - S&P/TSX Canadian Dividend Aristocrats - announced that it was removing 15 members (including most of the big banks) and that it was only gaining one new listing: Cogeco Inc. (CGO-T and CCA-T).

The corporations removed were: Astral Media Inc. (ACM.A-T), Bank of Montreal (BMO-T), Boardwalk REIT (BEI.UN-T), Calloway REIT (CWT.UN-T), CIBC (CM-T), First Capital Realty Inc. (FCR-T), Manulife Financial Corp. (MFC-T), National Bank of Canada (NA-T), Northern Property REIT (NPR.UN-T), Primaris Retail REIT (PMZ.UN-T), Reitman's Ltd. (RET.A-T), Royal Bank of Canada (RY-T), Sherritt International Corp. (S-T), Sun Life Financial (SLF-T) and Yellow Pages Income Fund (YLO.UN-T).

To stay on Standard & Poor's list, constituents must "have followed a managed-dividends policy of consistently increasing dividends every year for at least five years." The current list has 56 members including The Bank of Nova Scotia (BNS-T), Canadian National Railways (CNR-T), Canadian Pacific Railway Ltd (CP-T), Enbridge Inc (ENB-T), Power Financial Corp (PWF-T) and The Toronto-Dominion Bank (TD-T).

You can view the list of current members (after a free site registration) using the link above.

An extensive article entitled Banks are no longer pillars of this select dividend club was written about these changes by John Heinzl of The Globe and Mail on December 14, 2009. I did not include a link to the column on the Globe's site because it is no longer free. However, if you Google the article's title you should be able to find it on other websites.

Third, the Dow Jones Canada Titans 40 Index was changed to the Dow Jones Canada Titans 60 Index. Similar to the S&P's list, the index "measures 60 of the largest and most liquid equity securities trading in Canada. On a monthly basis, the top companies in the index universe by float-adjusted market list." (As above, the list is only available after you register on their site.)

Their index contains many of the same members as the S&P. However, they don't seem to have placed a five-year performance period on those listed as Tim Hortons Inc. (THI-T) is already listed. As well, many smaller resource companies like Silver Wheaton Corp. (SLW-T) and Eldorado Gold Corp. (ELD-T) are also here.

Finally, while most companies listed in these indexes have dividend reinvestment plans, not all do. This is why it is a good idea to compare the list of each index's constituents to the List of Canadian DRIPs and SPPs on this site to see which companies offer a DRIP.

Happing DRIPping,
Ken


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