Dividend Champions Update: Rise of the Contenders

Last month, I began work on adding companies that trade as ADRs (American Depository Receipts) and had long enough streaks to be included among the Contenders. To qualify, the streak must be in US dollars. The only addition at that time was ACE Limited (ACE), an insurance company incorporated in Switzerland, which declares (and raises) its dividend in US dollars and then translates it back into its home currency. This month, I thoroughly tested listings of Canadian and International dividend “achievers,” which typically means having at least five straight years of dividend increases, but that may be in their home currencies. Few companies made the cut, and many were tripped up by lower 2009 payouts, which may have been related to the fact that many foreign companies adjust their dividend to earnings, which declined in the recent recession, as well as the effect of currency translation.Added to the Contenders roster were two Bermuda-based insurance companies, PartnerRe Ltd. (PRE) and RenaissanceRe Holding (RNR), which, like ACE (which was formerly based in Bermuda, declare dividends in US dollars. (The “Re” in their names stands for Reinsurance.) Also joining the Contenders were two Canadian oil and gas companies, Enbridge (ENB) and Imperial Oil (IMO). Their payouts fluctuate with the currency rates, but the Canadian dollar is close to “parity” with our own, so they managed to qualify. It will be necessary to review the quarterly dividends at the end of the year in order to insure that the 2010 total exceeds what they paid in 2009, in US dollars. A third Canadian company, Canadian National Railway (CNI), came close at 14 years, and has been added to the new Challengers tab.... Read more