TORONTO (Reuters) - "Cash is king" has become the mantra for Canadian consumer companies looking to get through the coming year as they hold their purse strings tightly until the economic recovery becomes more firmly entrenched.

When times are good, companies often reward investors with hefty dividend increases or share buybacks, a tool that usually boosts stock valuations for investors.

But even though signs of recovery are abundant in Canada, many consumer companies aren't convinced the good times are necessarily here to stay. Most are giving big dividend increases a miss this year, waiting until they become more comfortable about sustaining the higher payouts.

That appears to be the thinking at food processor and grocer George Weston Ltd, which has some C$5 billion ($4.92 billion) to spend. Analysts say the company, which owns the Loblaw Cos supermarket chain, is more likely to reward shareholders with targeted acquisitions that would bring an immediate return, rather than mailing them a bigger dividend cheque.

Likewise, drugstore operator Jean Coutu and T-shirt maker Gildan Activewear are expected to keep close tabs on their cash for the time being.

"Companies are a little bit hesitant to jump out there and raise dividends in this environment. They will hold off for a bit until they see if things improve," said Brian Yarbrough, an analyst at Edward Jones in St. Louis, Missouri.

"They don't want to get into a situation where they pay out a big dividend and then have another down year and are forced to cut or take on debt to pay it. Those are not good situations to be in."

Instead, retailers are seen opting for growth, with an eye for acquisitions that fit nicely with existing operations.

"There are acquisition opportunities out there," said Candice Williams, a retail analyst at Genuity Capital Markets in Vancouver.