Three dividend aristocrats abroad, one troubling sign for income investors

The First Trust S&P International Dividend Aristocrats ETF (NASDAQ:FID) gives U.S. investors a passport into a radical of non-American companies with the rarest trait successful equity income: managed, stable, oregon rising dividends stretching backmost astatine slightest 7 years. FID tracks the S&P International Dividend Aristocrats Index, screening for payout subject extracurricular the United States, and caller trading adjacent $22 a stock follows a astir 28% one-year full return. The question for income holders of FID is whether the underlying dividends down that show are arsenic durable arsenic the aristocrat statement suggests.

Because FID holds overseas companies paying overseas currencies, each organisation arrives aft 2 filters: the underlying company's payout subject and the overseas speech complaint translating those payments backmost to U.S. dollars. With the Canadian dollar converting astatine 0.731 to the greenback, adjacent steadfast CAD-denominated raises tin shrink astatine the wire. That makes per-holding investigation the lone mode to work FID's income communicative honestly.

The fortress astatine the top: Canadian Natural Resources

Canadian Natural Resources (NYSE:CNQ) is the cleanest aristocrat successful the bunch. The shaper conscionable lifted its quarterly dividend 6% to CAD $0.625, marking its 26th consecutive twelvemonth of increases. Q1 adjusted EPS of $1.17 bushed estimates and accumulation deed a grounds 1.64 cardinal BOE/d.

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Oil Sands operating outgo of astir $24/bbl with a WTI breakeven successful the low-to-mid $40s means the dividend is covered adjacent if crude rolls implicit hard. Free currency travel funds some the payout and an assertive buyback, and the shares are up 55% implicit the past year. For FID holders, this is the income anchor.

Pembina: fee-based cash, a caller rise

Pembina Pipeline (NYSE:PBA) is the benignant of midstream communicative that justifies an aristocrat label. Management raised the dividend 3.5% to CAD $0.735 quarterly and lifted full-year adjusted EBITDA guidance to $4.35 cardinal to $4.55 billion. Roughly 55% of Q1 gross came from fee-based Pipelines and Facilities segments, the contracted backbone that pays distributions careless of NGL spreads. Cedar LNG is implicit 50% implicit with PETRONAS and Ovintiv volumes locked in. Shares are up 22% implicit the year. Coverage looks comfortable.