Overall, 2014 was not a bad year for your clients’ dividend income; however, the payout was not as good as stock indices would suggest.

Last year, a total of 358 companies listed on the Toronto Stock Exchange paid dividends. Although the dividends paid increased by an average of 5.2%, the average price change for all these companies’ share prices was a barely measurable drop of 0.01%.

In comparison, the S&P/TSX composite index rose by 7.4% in 2014 and the index’s indicated dividend increased by 7.2%.

The S&P/TSX composite dividend index, a subset of the S&P/TSX composite index, matched its parent’s 7.4% price gain – but the dividend index’s indicated dividend rose by a larger 7.8%.

The big winner, as usual, was the S&P/TSX dividend aristocrats index. It contains stocks that have paid a dividend for at least five consecutive years. This index’s price rose by 9.6% and the indicated dividend increased by 15.7%.

Of the 358 dividend-paying companies, 179 increased their dividend payouts – some through an extra dividend. In contrast, there were lower dividend payments by 56 companies.

The 358 companies exclude income trusts, mutual funds, closed-end stock funds and any investment-based businesses, such as banks’ split-share companies.

The year was notable for some large dividend increases in the energy sector, but these already are in jeopardy.

Suncor Energy Inc.’s 2014 dividend payment rose by 40%, to $1.02 from 73¢, and Canadian Natural Resources Ltd.’s dividend rose by 82%, to 87.5¢ from 48¢, but Encana Corp.’s payment dropped by 58%, to 28¢ from 67¢. Canadian Oil Sands Ltd.’s dividend was unchanged in 2014, at $1.40, but the company announced in early 2015 that it has cut its indicated dividend by 86% to 20¢ a year.

However, the stalwarts of the energy sector – pipelines – continued to boost their payouts in 2014. The two giants, TransCanada Corp. and Enbridge Inc., paid out more last year than in 2013 – as did Inter Pipeline Ltd. and Pembina Pipeline Corp. Enbridge also raised its dividend rate for 2015.

Banks, as usual, increased their dividends in 2014. Two banks split their shares in 2014: National Bank of Canada and Toronto-Dominion Bank (TD). TD’s dividend payout increased in 2014 by 13.6%; National Bank’s, by 10.6%. Royal Bank of Canada’s and Canadian Western Bank’s dividends also had big increases, up by 12% and 11.4%, respectively, in 2014.

With interest rates edging upward, prospects look better for higher dividends from the insurance industry. In the past year, though, only Industrial Alliance Insurance and Financial Services Inc. and ManuLife Financial Corp. raised their dividends.

Large-capitalization stocks are the steadiest dividend-payers -and increases continued within this group. Among large-caps paying more in 2014 were Canadian National Railway Co., BCE Inc., Brookfield Asset Management Inc., Telus Corp. and Magna International Inc.

Nevertheless, there were inevitable dropouts from the dividend-paying ranks in 2014. Among the missing are Equitable Group Inc., Foraco International SA, Iamgold Corp., Indigo Books & Music Inc., Sears Canada Inc. and Taiga Building Products Ltd.

Furthermore, longtime dividend payers such as Canada Bread Co. Ltd., McGraw-Hill Ryerson Ltd. and Shoppers Drug Mart Corp. disappeared, thanks to takeovers.

New names in 2014 among dividend-paying stocks include Axia Netmedia Corp., Cardinal Energy Inc., Concordia Healthcare Corp., Genesis Land Development Corp., Imvescor Restaurant Group Inc. and Lucara Diamond Corp.

© 2015 Investment Executive. All rights reserved.