At some point in the future, even though there are many reasons not to raise interest rates, they will begin to rise to what is considered more normal. At the present time, no one knows when that is because the conditions the politicians and central bankers have not been met. The politicians would like to keep rates until after they have been elected, the bankers would like to begin to raise rates, but the world economy has not stabilized yet in any of the countries. There has been improvement, not good growth. At some point in the future it is worthy of asking which dividend stocks have been raising their dividends to higher than 2.1 % (US inflation). And one person that did was Tim Shufelt (tshufelt@gobeandmail.com). The first part of any analysis is determining which tools to use and which companies do not get selected. 17 companies made the final cut, to arrive at the picks, the Dividend 5-year average growth – the cut was 20%; the 5 year average ROE (return on equity) looking at profitability in economic cycles and the cut was 15%; and the gross margin 5 year average growth which gives an indication of ability to raise prices with a minimum of 5% was used. The results were

Company                Symbol          Dividend 5-Yr  5 Year Ave     Gross Margin 5 Yr

–                                   –                Growth (%)          ROE (%)          Average Growth

Agrium Inc               AGU-T               87.2                   17.5                      5.5

Constellation Software  CSU-T          73.2                   36.2                      6.4

Potash Corp                   POT-T          57.2                   20.2                      6.3

CF Industries                     CF-N         53.4                   32.2                     10.4

Brunswick Corp                BC-N          51.6                  79.8                       17.1

Seagate Tech                  STX-Q         44.0                  57.0                      31.7

Celanese                           CE-N          37.6                  28.9                        6.4

Westlake Chemical           WLK-N        35.4                  25.1                     46.7

Magna International              MG-T       29.5                 16.3                      39.2

Cummins Inc                       CMI-T         29.0                  21.9                       6.8

Broadridge Fin Solutions        BR-N        24.6                 27.3                       5.1

KLA-Tencor                          KLAC-Q      24.6                16.7                       12.6

Ingredion                              INGR-N        23.4                16.8                      10.5

Texas Instruments                  TXN-Q        23.4                18.5                      6.9

Exco Tech                                XTC-T       22.1                15.7                      21.0

Lindsay Corp                            LNN-N       21.1                19.0                        6.5

Hees Corp                                HES-N        20.1                17.1                    15.0

The above are from Canada and the United States and show a variety of industries and many that are not included. In all analysis, the idea with dividend stocks is to lose less money and make more. Looking at your portfolio and these type of companies will give you an indication of how you are prepared for interest rate hikes.

There are more questions than answers, till the next time – to raising questions