Below is a list of companies in Canada and the United States that have increased their dividends in the month of January.
The companies we list are not the complete list of companies that have increased their dividends in Canada and the United States or the rest of the world however, they are companies we follow or own.
Canadian Companies
| Company | Previous ($) | New ($) | Change (%) |
| ATCO Ltd. | 0.4617 | 0.4756 | 3.0 |
| Canadian National Railway | 0.7325 | 0.79 | 7.8 |
| Canadian Utilities | 0.4442 | 0.4486 | 1.0 |
| Metro Inc. | 0.275 | 0.3025 | 10.0 |
| Richelieu Hardware | 0.13 | 0.15 | 15.4 |
US Companies
| Company | Previous ($) | New ($) | Change (%) |
| Kimberly-Clark Corporation | 1.16 | 1.18 | 1.7 |
The dollar value listed per share represents a quarterly dividend payment.
Information was obtained from the companies directly.
History of Canadian National Railway
Canadian National Railway (CNR) recently increased their quarterly dividend by 7.8% from $0.7325 to $0.79. With this dividend increase, the company now pays an annual dividend of $3.16 per share to their shareholders. CNR started paying a dividend in 1996 and has increased it every year since.
As depicted in the chart above, CNR rewards their shareholders with a growing annual dividend. In 1998, the annual dividend was only $0.088. Fast forward to 2023, the dividend has increased by 3591% to $3.16. If you had bought a share of CNR in 1998 at a cost $6.65, you would have a dividend yield on cost of 57.52%. This means in 2023, you would receive 57.52% of the original cost in dividend income. Not to mention, you would also have an unrealized capital gain of $151.73 with the current cost being $158.38 as of January 31st, 2023. If the past is an indicator of the future, you will continue to receive the increasing annual dividend income the company pays their shareholders. You can use dividend income to cover your living expenses or you can reinvest it to allow your savings to further compound.
In addition to the longstanding dividend history, CNR has extensive company history. Canadian National Railway is currently the longest railway system and is the only transcontinental rail network in North America. The company has over 31,000 km of railway in Canada and the United States that connects the three coasts including Atlantic, Pacific, and Gulf of Mexico. It was founded by William Mackenzie and Donald Mann in 1899 when two small railway lines in Manitoba amalgamated.
Since then, the company vastly expanded their railway lines throughout Canada. There was a demand for new transcontinental railways due to the increased immigration and agricultural production in Western Canada. The origins of its railway lines were from five financially troubled railways including the Grand Trunk and its subsidiary, the Grand Trunk Pacific, The Intercolonial, the Canadian Norther, and the National Transcontinental.
Prior to CNR’s privatization in 1995, the company was a Crown corporation meaning it was owned by federal organizations. The railways were financially supported by the federal government and financed by borrowing mostly from British banks. At the start of World War I, credit was no longer available and the government called a royal commission. The royal commission recommended the nationalization of all the railways (except the Canadian Pacific Railway) and absorption of the railways’ debts.
In 1923, Sir Henry Thornton was appointed president of the company and under his leadership, CNR started to establish annual surpluses and gained the support of the 99,000 employees at the time. Thornton was responsible for introducing school cars and Red Cross units that served children and the sick in remote regions. Between 1923 and 1932, Thornton also developed a network of radio stations that initiated programs such as Hockey Night in Canada, which led to the formation of the Canadian broadcasting Corporation.
During the depression in the 1930s, there was less railway traffic and more highway and air traffic. CNR capitalized on the increase in air traffic by forming TransCanada Airlines, which is known as Air Canada today. Shortly thereafter in 1938, the federal government cancelled over $1billion of its inherited debt. The debt exemption led to CNR’s ability to purchase steam locomotives that were used to haul freight and troops during World War II.
In the 1950s and 1960s, Donald Gordon made some major organizational changes as president. He reduced the number of subsidiary companies under CNR from 80 to 30 companies. Some of the subsidiary companies and their projects included CNCP Telecommunications (jointly owned by CNR and Canadian Pacific), construction of the CN Tower, and the redevelopment of downtown properties in several cities by CN Real Estate. In addition, CN had established mineral rights in western Canada through the formation of CN Exploration and CNX/CN Trucking was formed by the amalgamation of the trucking subsidiaries.
In the late 70s, CNR started to divest from the businesses that were outside of the railway sector including real estate, hotels, and CNCP Telecommunications. VIA Rail took over CNR’s passenger train subsidiary and became a separate Crown corporation as well as Air Canada became its own Crown corporation. By 1989, CNR focused mainly on the rail freight operations and had greatly reduced the company's subsidiaries.
In 1995, CNR was sold to individual investors due to the requirement of greater capital. Shortly after CNR was sold, the company became more profitable by reducing the quantity of railway track and acquired some larger routes that connected to the Gulf of Mexico. As of 2016, CNR transports approximately $250 billion worth of goods annually and earned over $12 billion in revenue. In Canada and the US, CNR has over 22,000 employees.
The Canadian National Railway is fundamental in transporting goods throughout Canada and the United States in a fast and cost-effective way. CNR provides an essential service that we rely on to deliver our goods and helps connect remote regions. In addition to providing an essential service, CNR also rewards their shareholders with increasing dividends.
If you would like to read more about company history please take a look at our previous blog post:
References
Tucker, Albert. "Canadian National Railway (CN)." The Canadian Encyclopedia. Historica Canada. Article published March 25, 2009; Last Edited October 24, 2017.
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