In addition to the weekly earnings summaries in our newsletter, we will update the Earnings Calendar in the Premium Content section of the site each week through quarter-end.

Some companies on The List do not follow a calendar-year reporting cycle. Their most recent off-cycle results are included in the Earnings Calendar at the top of the page above the solid line.

Summary

Benjamin Graham once remarked that earnings are the principal factor driving stock prices.

Earnings and dividend growth often go hand in hand, providing insights into future dividend growth for quality companies. Regularly monitoring our dividend growers, starting with quarterly earnings releases, is a key part of the process. The List is sorted by reporting date, complete with the market’s consensus estimates and actual reported results. Red numbers indicate earnings below those of the previous year for the same period.

Read more

Summary

This is not a stock-picking newsletter!

It’s a behind-the-scenes look at how a dividend growth portfolio is built, maintained, and improved over time.

Welcome to this week’s MP Market Review.

Before we begin, a quick explanation of the name.

Many years ago, when I first discovered dividend growth investing, I came across a quote that stopped me in my tracks:

“You have a pair of pants. In the left pocket, you have $100. You take $1 out of the left pocket and put it in the right pocket. You now have $101. There is no diminution of dollars in your left pocket. That is one magic pair of pants.”

That is dividend growth investing in its simplest form.

When a quality company pays a dividend, cash moves from the company’s pocket to yours, yet your ownership stake remains intact. As earnings grow, dividends tend to grow. As dividends grow, share prices often follow. Reinvest those dividends into additional shares, and the cycle accelerates: more shares generate more dividends, which buy even more shares.

That’s the magic.

It’s why we call this newsletter Magic Pants Dividend Growth Investing.

Every week, we track the companies on The List, our curated watchlist of Canadian dividend growth businesses selected for their ability to produce rising income over time. While we also publish a U.S. edition each month, Canada remains our primary hunting ground.

Our objective is straightforward:

Grow dividend income by 7-10%+ annually while achieving long-term capital appreciation that matches or exceeds the TSX Composite in Canada and the S&P 500 in the United States.

What follows is not theory.

It is the real-world application of a dividend growth strategy using real money, real positions, and real results.

Markets create an endless stream of noise. We ignore most of it.

Instead, we focus on a handful of metrics that tell us whether our process is working. No predictions. No forecasts. No crystal ball.

Just results.

The magic is in the dividend. Dividends lead. Prices follow.

This Week’s Scorecard

MP Wealth-Builder Model Portfolio (Canada)

• Annualized Total Return: +17.25% since inception

• Total Return (includes dividends): +15.80% year-to-date

• Current Yield: 3.2%

The List (Canada)

• Dividend Income Growth: +6.6% year-to-date

• Capital Appreciation: +7.4% year-to-date

• Dividend Announcements Last Week: None

• Earnings Reports Last Week: None

• Earnings Reports This Week: None

DGI Clipboard

“Current yield, using its own historic yield as a guide, is, in my view, a fine valuation measure.”

— Tom Connolly

Timely Ten: Where the Best Dividend Bargains Are Hiding This Month

Timely Ten Update

There was no change to the Canadian Timely Ten this month. The same ten companies continue to rank as the most undervalued names on our Canadian watchlist.

Similar to last month, seven of the Timely Ten increased in price over the past thirty days, highlighting just how quickly quality businesses can become less attractive from a valuation perspective. Only Alimentation Couche-Tard Inc. remains undervalued by double digits based on our valuation methodology. Overall, it is becoming increasingly difficult to find compelling value in the Canadian market.

That isn’t necessarily a reason to stop investing. Rather, it reinforces the importance of patience and discipline. When valuations become stretched, we continue to build positions incrementally, allowing market volatility to dictate the pace of our purchases rather than emotions. History has shown that attractive buying opportunities eventually return, and maintaining a watchlist of high-quality businesses ensures we are ready when they do.

More Opportunity South of the Border

The American Timely Ten continues to offer more opportunity, with noticeably greater movement throughout the rankings. The top four companies remain unchanged and are largely trading sideways, but there has been meaningful movement in the middle of the list.

UnitedHealth Group, Automatic Data Processing, and Visa all moved lower on the list this month on improving share prices, and we are hopeful that they may soon graduate from the Timely Ten. We own all three in our MP Wealth-Builder Model Portfolio (USA), and our disciplined approach of adding to these positions during periods of weakness is beginning to pay off.

CME Group: Short-Term Weakness, Long-Term Opportunity

The biggest mover this month was CME Group (CME-Q), which climbed from twelfth to eighth on the list following recent share price weakness.

The decline was largely driven by UBS lowering its earnings estimates and price target after second-quarter average daily trading volume came in below expectations. Trading activity was softer in interest rate and energy futures, two of CME’s largest product categories, leading to concerns about near-term transaction revenue.

While these issues may create short-term headwinds, they have done little to alter our long-term investment thesis for this exceptional business.

Air Products: Capital Discipline Rewarded

Air Products & Chemicals (APD-N) moved in the opposite direction, falling from ninth to thirteenth after a strong rally in its share price.

Investor sentiment improved after management cancelled several large capital-intensive clean energy projects, a move widely viewed as evidence of greater capital discipline rather than weakening prospects. Management also reaffirmed progress on its flagship NEOM Green Hydrogen Project in Saudi Arabia, further supporting investor confidence.

Volatility Creates Opportunity

These shifts once again demonstrate why we focus on valuation rather than headlines. Quality companies frequently move in and out of favour, creating opportunities for patient long-term investors.

We recently added to both CME Group(CME-Q) and Intercontinental Exchange (ICE-N) within our MP Wealth-Builder Model Portfolio (USA), reinforcing our view that the Timely Ten remains one of the most productive hunting grounds for identifying high-quality dividend growth companies trading at sensible prices.

The Timely Ten is published monthly and ranks the most undervalued dividend growth companies in Canada and the United States. The rankings are based on Dividend Yield Theory, a valuation framework that I explain in greater detail later in this article.

Note: goeasy Ltd.’s dividend has been suspended, so we have moved it to the bottom of the list.

Background

The third step in our investment process is monitoring. Once we’ve identified high-quality dividend growth companies and purchased them at sensible prices, we continuously monitor them for changes in valuation and business fundamentals.

Tracking dozens of companies can quickly become overwhelming. Fortunately, our focus is limited to the businesses on our watchlists rather than the thousands of stocks that make up the broader market. Even so, we are always looking for ways to improve the efficiency and consistency of our process. One of the most valuable tools we have found is Dividend Yield Theory.

What Is Dividend Yield Theory?

Dividend Yield Theory is a straightforward valuation method based on a simple observation: the dividend yields of mature, high-quality dividend growth companies tend to fluctuate around a historical average over time, provided the underlying business remains fundamentally intact.

Because a stock’s price and dividend yield move in opposite directions, a higher-than-normal dividend yield often signals that the shares are trading below their historical valuation. Conversely, an unusually low dividend yield may indicate that the shares have become expensive.

Dividend Yield Theory doesn’t tell us what to buy. Our quality screening process does that. Instead, it helps us determine when to buy.

Building the Watchlist

Before applying Dividend Yield Theory, every company must first qualify for our watchlist by meeting our quality standards.

• Dividend growth: Minimum 10 consecutive years of dividend increases.

• Market capitalization: At least $1 billion.

• Diversification: Maximum of five companies per sector, with a preference for no more than two per industry.

• Business quality: We generally exclude REITs and pure-play energy companies because their earnings and dividends tend to be more cyclical.

This quality-first approach dramatically reduces the investment universe and allows us to focus only on exceptional businesses.

How We Rank the Timely Ten

Each month, we rank every company on our Canadian and U.S. watchlists by the discount between its current market price and its estimated fair value, based on Dividend Yield Theory.

Fair value is calculated using a simple formula:

Fair Value = Current Annual Dividend ÷ Historical High Dividend Yield

The larger the discount to fair value, the higher the company ranks.

The ten companies above the thick black line are trading below their estimated fair values and currently offer dividend yields higher than their historical highs. These companies have historically provided the best combination of quality, valuation, and upside potential.

These are our Timely Ten.

While no valuation method is perfect, Dividend Yield Theory has proven to be an exceptionally effective way to identify attractive entry points for high-quality dividend growth companies. Used alongside our quality-first investment process, it helps us deploy capital with greater discipline while removing much of the emotion from investment decisions.

Takeaway

The Timely Ten is not about chasing performance. It is about patiently allocating new capital to outstanding businesses when the odds are tilted in our favour. Over a full market cycle, buying great companies at sensible prices has proven to be one of the simplest and most effective ways to build both a growing stream of dividend income and long-term capital appreciation.

Looking for a helping hand in the market? Members of Magic Pants Dividend Growth Investing get exclusive ideas and guidance to navigate any climate.

The Magic Pants model portfolios (Canadian and American) are real-money, dividend-growth portfolios funded with actual capital and executed in live accounts. Every position shown is owned, sized, and tracked in real time using our disciplined DGI process.

Become a PAID subscriber, and I’ll show you exactly how I do it. In addition, gain full access to this post and exclusive, subscriber-only content. We do the work; you stay in control!

Subscribe now

DGI Scorecard

The Magic Pants 2026 list (The List) includes 26 Canadian dividend growth stocks, and our new American watchlist (The List-USA) contains 28 companies. Here are the criteria to be considered a candidate on our watchlists:

1. Dividend growth streak: 10 years or more.

2. Market cap: Minimum one billion dollars.

3. Diversification: Limit of five companies per sector, preferably two per industry.

4. Cyclicality: Exclude REITs and pure-play energy companies due to high cyclicality.

Based on these criteria, companies are added or removed from ‘The List’ annually on January 1. Prices and dividends are updated weekly.

‘The List’ is not a portfolio but a coaching tool that helps us think about ideas and risk manage our model portfolio. We own some but not all the companies on ‘The List’. In other words, we might want to buy these companies when valuation looks attractive.

Our newsletter provides readers with a comprehensive insight into the implementation and advantages of our dividend growth investing strategy. This evidence-based, unbiased approach empowers DIY investors to outperform both actively managed dividend funds and passively managed indexes and dividend ETFs over longer-term horizons.

Note: In the last week of every month, I will show the updated watchlist for our American dividend growers, The List-USA. It will be shown after the Canadian watchlist below.

Performance of 'The List'

The dividend growth for The List remained unchanged last week, with an average YTD increase of 6.6% (income).

The price of The List was up last week and now stands at +7.4% YTD (capital).

Top Performers Last Week:

• TFI International (TFII-N), up +6.11%.

• Canadian Natural Resources (CNQ-T), up +4.27%.

• Metro Inc. (MRU-T), up +3.92%.

Worst Performer Last Week:

• Franco Nevada (FNV-N), down -5.54%.

From breaking news to quarterly earnings reports, we break down the week’s biggest headlines to help you make sense of the market.

Read more

I wanted to let you know that I have just added to our position in another high-quality dividend growth company within the MP Wealth-Builder Model Portfolio (CDN).

It offers an attractive starting dividend yield of more than 4% while growing its dividend at approximately 6% annually. Combined with inflation-linked features embedded throughout its business model, the company is well positioned to provide investors with a growing, inflation-protected income stream over the long term.

If you’ve been considering upgrading your subscription, remember that some of the best opportunities are identified before they become obvious to the broader market. Paid subscribers receive every buy, sell, trim, and portfolio update in real time, allowing them to follow our process as it unfolds rather than reading about it after the fact.

Read more

I wanted to let you know that I have just added to our position in another high-quality dividend growth company within the MP Wealth-Builder Model Portfolio (CDN).

It is a dividend achiever with a 15-year track record of annual dividend increases. Over the past decade, it has managed to grow dividends at an annualized rate of 7.2%.

Despite these strong fundamentals, recent weakness in the share price has created an opportunity to acquire additional shares at a valuation we believe is both sensible and attractive for long-term dividend growth investors.

If you’ve been considering upgrading your subscription, remember that some of the best opportunities are identified before they become obvious to the broader market. Paid subscribers receive every buy, sell, trim, and portfolio update in real time, allowing them to follow our process as it unfolds rather than reading about it after the fact.

Read more

I wanted to let you know that I have just added to our position in another high-quality dividend growth company within the MP Wealth-Builder Model Portfolio (CDN). It is a dividend aristocrat with a 25-year track record of annual dividend increases. Over the past decade, it has managed to grow dividends at an annualized rate of 17.0%. The shares look sensibly priced based on our valuation metrics.

As a long-term investor, I look for quality companies that grow earnings and dividends, and try to acquire them at a good price. Afterwards, the goal is to sit back and let the power of compounding do the heavy lifting for me.

If you’ve been considering upgrading your subscription, remember that some of the best opportunities are identified before they become obvious to the broader market. Paid subscribers receive every buy, sell, trim, and portfolio update in real time, allowing them to follow our process as it unfolds rather than reading about it after the fact.

Read more

I wanted to let you know that I have just added to our position in another high-quality dividend growth company within the MP Wealth-Builder Model Portfolio (USA).

The company is off to an exceptional start in 2026, reporting record revenue, operating income, and earnings in its most recent quarter. It is also a Dividend Achiever, having increased its dividend for 12 consecutive years and achieving an impressive 10% average annual dividend growth rate over the past decade.

Despite these strong fundamentals, recent weakness in the share price has created an opportunity to acquire additional shares at a valuation we believe is both sensible and attractive for long-term dividend growth investors.

If you’ve been considering upgrading your subscription, remember that some of the best opportunities are identified before they become obvious to the broader market. Paid subscribers receive every buy, sell, trim, and portfolio update in real time, allowing them to follow our process as it unfolds rather than reading about it after the fact.

Read more

I wanted to let you know that I added to an existing holding in our U.S. model portfolio earlier today. This company is a dividend achiever with a 15-year track record of annual dividend increases. Over the past decade, it has grown its dividend at an annualized rate of 8.7%, and based on our valuation metrics, the shares are currently trading at a sensible price.

The stock is now trading about 20% below its historical average P/E and currently yields 2.15%. What makes this company especially attractive is its annual special dividend each January, which matches its regular dividend. The actual yield is close to 5%.

Read more

Summary

This is not a stock-picking newsletter!

It’s a behind-the-scenes look at how a dividend growth portfolio is built, maintained, and improved over time.

Welcome to this week’s MP Market Review.

Before we begin, a quick explanation of the name.

Many years ago, when I first discovered dividend growth investing, I came across a quote that stopped me in my tracks:

“You have a pair of pants. In the left pocket, you have $100. You take $1 out of the left pocket and put it in the right pocket. You now have $101. There is no diminution of dollars in your left pocket. That is one magic pair of pants.”

That is dividend growth investing in its simplest form.

When a quality company pays a dividend, cash moves from the company’s pocket to yours, yet your ownership stake remains intact. As earnings grow, dividends tend to grow. As dividends grow, share prices often follow. Reinvest those dividends into additional shares, and the cycle accelerates: more shares generate more dividends, which buy even more shares.

That’s the magic.

It’s why we call this newsletter Magic Pants Dividend Growth Investing.

Every week, we track the companies on The List, our curated watchlist of Canadian dividend growth businesses selected for their ability to produce rising income over time. While we also publish a U.S. edition each month, Canada remains our primary hunting ground.

Our objective is straightforward:

Grow dividend income by 7-10%+ annually while achieving long-term capital appreciation that matches or exceeds the TSX Composite in Canada and the S&P 500 in the United States.

What follows is not theory.

It is the real-world application of a dividend growth strategy using real money, real positions, and real results.

Markets create an endless stream of noise. We ignore most of it.

Instead, we focus on a handful of metrics that tell us whether our process is working. No predictions. No forecasts. No crystal ball.

Just results.

The magic is in the dividend. Dividends lead. Prices follow.

This Week’s Scorecard

MP Wealth-Builder Model Portfolio (Canada)

• Annualized Total Return: +17.06% since inception

• Total Return (includes dividends): +17.02 % year-to-date

• Current Yield: 3.2%

The List (Canada)

• Dividend Income Growth: +6.6% year-to-date

• Capital Appreciation: +6.7% year-to-date

• Dividend Announcements Last Week: None

• Earnings Reports Last Week: None

• Earnings Reports This Week: None

DGI Clipboard

“Remember when the crash arrives, it will be a P/E one, (a valuation decline). Those who bought expensive stocks will get their comeuppance.”

- Tom Connolly

The Business Hasn’t Collapsed. But The Valuation Has.

One of the least understood forces in investing is valuation compression, yet it can have a significant impact on long-term returns.

John Bogle, founder of Vanguard, explained this with a remarkably simple equation:

Total Return = Investment Return + Speculative Return

Investment return comes from the things that truly create shareholder wealth: earnings growth and dividends. Speculative return comes from changes in valuation, or how much investors are willing to pay for those earnings.

That distinction is critical because valuation can change even when a business continues to perform exceptionally well.

Investment Return vs. Speculative Return

Imagine a company that grows earnings by 7% annually while paying a 3% dividend. On paper, investors should expect an investment return of roughly 10% per year before any change in valuation.

Now suppose that the same company once traded at 25 times earnings, but over the next decade, investors decide that 18 times earnings is a more reasonable valuation. The business continues to execute flawlessly. Earnings keep growing. The dividend continues to rise. Yet shareholders may experience years of mediocre price appreciation because the declining P/E multiple offsets part, or even all, of the investment return.

That is valuation compression.

It’s Happening Today

You don’t have to look very far to find examples. Several companies on our watchlists have delivered impressive operational performance while their valuation multiples have begun to normalize.

Stantec and Thomson Reuters in Canada, along with Zoetis, Accenture, and Intuit in the United States, are all exceptional businesses that have experienced some degree of valuation compression after years of premium pricing.

This is why investors should be cautious when markets become expensive. Elevated valuations don’t necessarily mean stock prices are about to fall. They simply lower the probability of earning outsized future returns because much of tomorrow’s optimism has already been reflected in today’s price.

Why Dividend Growth Investors Have an Edge

Fortunately, dividend growth investors have an advantage.

Our objective has never been to profit from expanding valuation multiples. We invest in exceptional businesses that consistently grow earnings and increase their dividends. Those two characteristics are the true engines of long-term wealth creation.

Even when valuations compress, the dividend continues to arrive. Better yet, reinvested dividends buy more shares while prices are lower, increasing future dividend income and positioning the portfolio to benefit when valuations eventually stabilize.

Patience Is Part of the Process

This is why patience is such an important part of dividend growth investing. Markets can spend years correcting excessive valuations while the underlying businesses continue to grow.

Investors focused only on share prices often become discouraged. Investors focused on a growing stream of dividend income recognize these periods as opportunities rather than setbacks.

John Bogle’s formula reminds us that we cannot control investor sentiment. We can, however, control the quality of the businesses we own and the prices we are willing to pay.

Takeaway

Over time, earnings growth and dividends do the heavy lifting. Valuation may enhance returns for a while, but it eventually reverts toward normal. When it does, investment return is what remains, and that is where lasting wealth is created.

Looking for a helping hand in the market? Members of Magic Pants Dividend Growth Investing get exclusive ideas and guidance to navigate any climate.

The Magic Pants model portfolios (Canadian and American) are real-money, dividend-growth portfolios funded with actual capital and executed in live accounts. Every position shown is owned, sized, and tracked in real time using our disciplined DGI process.

Become a PAID subscriber, and I’ll show you exactly how I do it. In addition, gain full access to this post and exclusive, subscriber-only content. We do the work; you stay in control!

Subscribe now

DGI Scorecard

The Magic Pants 2026 list (The List) includes 26 Canadian dividend growth stocks, and our new American watchlist (The List-USA) contains 28 companies. Here are the criteria to be considered a candidate on our watchlists:

1. Dividend growth streak: 10 years or more.

2. Market cap: Minimum one billion dollars.

3. Diversification: Limit of five companies per sector, preferably two per industry.

4. Cyclicality: Exclude REITs and pure-play energy companies due to high cyclicality.

Based on these criteria, companies are added or removed from ‘The List’ annually on January 1. Prices and dividends are updated weekly.

‘The List’ is not a portfolio but a coaching tool that helps us think about ideas and risk manage our model portfolio. We own some but not all the companies on ‘The List’. In other words, we might want to buy these companies when valuation looks attractive.

Our newsletter provides readers with a comprehensive insight into the implementation and advantages of our dividend growth investing strategy. This evidence-based, unbiased approach empowers DIY investors to outperform both actively managed dividend funds and passively managed indexes and dividend ETFs over longer-term horizons.

Note: In the last week of every month, I will show the updated watchlist for our American dividend growers, The List-USA. It will be shown after the Canadian watchlist below.

Performance of 'The List'

The dividend growth for The List remained unchanged last week, with an average YTD increase of 6.6% (income).

The price of The List was down last week and now stands at +6.7% YTD (capital).

Top Performers Last Week:

• goeasy Ltd. (GSY-T), up +18.54%.

• Thomson Reuters (TRI-Q), up +6.37%.

• Manulife Financial (MFC-T), up +2.87%.

Worst Performer Last Week:

• Loblaw Companies Limited (L-T), down -5.28%.

From breaking news to quarterly earnings reports, we break down the week’s biggest headlines to help you make sense of the market.

Read more

Each quarter, we share a full performance update so you can see exactly how a disciplined dividend growth strategy builds wealth over time. It is a clear, numbers-first look at how we construct durable, income-producing portfolios step by step, brick by brick.

For our free subscribers, we provide a summary that offers a small window into what you could be using every day to strengthen your own results.

If you are still on the free plan, consider what you are missing: our model portfolio performance business plan, our research framework, and the real-time decisions that drive long-term compounding.

Paid subscribers get the full experience:

• Real buy and sell alerts

• Exact position sizes for every trade

• Full access to our Premium Content library, where we break down the strategy we use to build growing income year after year

Join us and invest alongside a process designed to compound, protect, and grow your wealth. We do the work, you stay in control!

Subscribe now

📢 MP Wealth-Builder Model Portfolio (USA) Update – April 30, 2026 📢

Welcome to the latest update on our American real-money dividend growth portfolio! As we track our progress, I’m excited to share how we measure up against our long-term projections.

🚀 Portfolio Overview

Launched on May 1, 2023, (one year after our CDN portfolio) this portfolio was built with a clear vision: to create a reliable and growing income stream. Our investment approach includes:

✅ An initial capital commitment of $100,000 (deployed over four years)
✅ Annual contributions of $12,000 (beginning in year two)
✅ Full dividend reinvestment to maximize compounding

🎯 Our Objective
Our objective for our American portfolio is simple: grow dividend income by 7–10%+ annually while delivering capital appreciation that matches or exceeds the S&P 500 Index over a full market cycle.

We’re also on track to grow the value of our portfolio beyond $500,000 in less than a decade!

In an era of instant gratification, this approach reinforces the value of staying the course and letting time do the heavy lifting.

📊 How We Invest
We focus on America’s highest-quality dividend growth companies, using a disciplined selection process to deploy and monitor capital effectively.

💡 For Conservative DIY Investors This project is built for long-term, income-focused investors who believe in building wealth the traditional way by owning assets that produce reliable and growing income. Dividend growth is at the core of our strategy, and history shows that steadily rising income tends to pull capital appreciation along.

In this update, I’ve included:

✅ Total returns
✅ Current holdings & position sizes
✅ Sector weightings
✅ Illustrative charts tracking our journey

Portfolio Total Returns (USA)

Portfolio Holdings and Position Sizes (USA)

🚀 Where We Stand On Deploying Our Capital

We have fallen behind in deploying our initial capital as per the original business plan.

That includes:

• initial $90,000

• annual contributions

• reinvested dividends

• realized gains

Approximately $17,000 remains uninvested and will be carried forward into the next fiscal period.

This matters because deployment timing affects long-term compounding.

One lesson from this portfolio is clear:

Getting quality capital to work earlier matters. We need to do better.

Projections as per Business Plan (USA)

📈 Visualizing the Journey

At this stage, both income growth and capital appreciation remain below our projections in the original business plan for the MP Wealth-Builder Model Portfolio (USA) – Business Plan).

We have some work to do.

Share

On our journey to mastering dividend growth investing (DGI), we immersed ourselves in extensive research on endowment investing—a time-tested approach to sustainable wealth-building. After all, who better to learn from than those who have preserved and grown wealth for generations?

For much of history, true wealth wasn’t measured by net worth alone, but by the income an investor’s assets could reliably produce. This fundamental principle resonates deeply with us as dividend growth investors.

We often reference Jim Garland’s powerful opening quote from his 2013 paper, Memo to the Darcy Family: To Thine Own Self Be True, as a guiding insight into this philosophy.

“The hero of Jane Austen’s great novel, Pride and Prejudice, was a Mr. Darcy. Mr. Darcy was wealthy — but Austen expressed that fact in a way that today sounds odd. She wrote that Mr. Darcy was worth £10,000 a year. The income from his properties was far more important than the market value of those properties because he lived off that income.”

Mr. Garland illustrates this concept through the story of two farmers:

“Imagine two farms and two farmers. One farmer raises chickens and sells them to grocery stores. We’ll call him a chicken farmer. The other farmer keeps hens in a henhouse and feeds the eggs to his rather large family. The second one is an egg farmer.

The first person, the chicken farmer, is vitally interested in the market value of chickens. The second one, the egg farmer, is vitally interested in the number of eggs that his hens can lay, and in the health of the hens, but he doesn’t care at all about the market value of his hens.

For the chicken farmer, risk means the probability of a decline in the price of chickens. On the other hand, the egg farmer could care less about market values. His risks are foxes, viruses, and other such threats to the well-being of his hens.

Think of stocks as chickens, and dividends as the eggs those stocks provide. Total return investors are chicken farmer investors, because they worry about the market value of their “chickens” – of their stocks. On the other hand, endowment investors are egg farmer investors. All that endowment investors worry about is the current and future quantities of their “eggs” – their dividends.”

Like Garland, we see the clear parallel between endowment investors and egg farmers. But as dividend growth investors, we take it one step further. Instead of settling for any dividend-paying stock, we focus exclusively on dividend growth stocks—companies that consistently increase their payouts year after year. Our experience has shown that businesses with a strong track record of dividend growth tend to deliver capital appreciation at a similar pace. The combination of a rising dividend and a growing share price is a powerful wealth-building engine.

Armed with a strategy that pays us in both up and down markets, we remain patient, waiting for the right opportunities to buy quality dividend growers at sensible prices. After all, in today’s chicken-farming world, the key to building wealth is simple: buy more income at a lower price.

And what better way to demonstrate our approach than by building a dividend growth portfolio from the ground up?

Summary

“A goal without a plan is just a wish.”

Every investor’s portfolio is essentially a small business. Like any successful business, it requires a clear, well-defined plan to operate efficiently and achieve long-term success. Our plan also includes guardrails like allocation limits and diversification.

Our approach focuses on investing in American dividend growth companies and follows three basic rules:

✅ Quality – We prioritize large-cap companies with a proven track record of dividend growth, strong financials, and a stable, growing industry.

✅ Valuation – We aim to buy stocks at a sensible or undervalued price based on their historical track record. Buying at a discount introduces a margin of safety, increasing the likelihood of future price appreciation.

✅ Monitoring – We continuously track our dividend growers, paying close attention to yield fluctuations, as they can signal changes in valuation. Consistent dividend growth is the strongest indicator of management’s confidence in a company’s long-term prospects.

Portfolio Strategy

✔ Initial Investment: $100,000
✔ Ongoing Contributions: $12,000 per year (starting Year 2) to demonstrate the impact of regular investing
✔ Sector Diversification: No single position exceeding 6% of the total portfolio
✔ Dividend Reinvestment: All dividends will be reinvested, though not necessarily in the same stock that generated them

Execution & Transparency

We will buy and sell stocks based on our process, not on a fixed schedule. Each trade will be documented with timestamped Dividend Growth Investing (DGI) alerts, followed by an in-depth analysis article explaining the rationale behind the decision.

We will also provide:

✔ Quarterly portfolio updates for all subscribers
✔ Proof of each transaction to ensure full transparency

The MP Wealth-Builder Model Portfolio (USA) is actively managed, monitored, and reported on, so investors can see how disciplined dividend growth investing can build long-term wealth.

Inception Date

May 1, 2023

Goal And Income Objectives

Primary Objective

The primary objective of the MP Wealth-Builder Model Portfolio (USA) is to grow dividend income by 7–10%+ annually while also achieving capital appreciation in line with, or better than, the S&P 500 Index over a full market cycle.

Income growth is the engine of this strategy. Capital appreciation is expected to follow as earnings and dividends compound over time.

Capital Deployment Plan

We will deploy the initial $100,000 of capital gradually over the first four years, recognizing that market timing is unpredictable and that attractive valuation opportunities do not appear on a fixed schedule.

Rather than rushing all our capital into the market, we will remain patient and allow “Mr. Market” to present favourable entry points in high-quality dividend growth companies.

Beginning in Year 2, we will contribute an additional $12,000 annually, continuing each year thereafter. Our objective is to fully invest each annual contribution in the year it is made to maximize the compounding effect of reinvested dividends.

While the timing of investments may influence short-term results, this portfolio is designed with a long-term horizon. As such, we remain confident in our ten-year income objectives despite inevitable short-term variability.

Income Growth Target

Our numerical income goal is to generate approximately $1,000 in monthly dividend income within ten years of inception.

This income growth will be driven by two primary factors:

• Reinvesting dividends, allowing income to compound year after year

• Consistent annual contributions, which accelerate the growth of the income base

We deliberately chose a ten-year time horizon to emphasize the importance of patience and long-term thinking. Dividend Growth Investing is not a short-term strategy. Its true power emerges gradually as compounding works over many years, and often decades.

Return Assumptions and Framework

The table below illustrates how the MP Wealth-Builder Model Portfolio (USA) could potentially grow its dividend income over time under a set of reasonable and conservative assumptions:

• Starting dividend yield: 2.5% on invested capital

• Annual dividend growth: 9%

• Annual capital growth: 11.5% (derived from yield plus dividend growth)

For simplicity, we assume that capital is invested at the beginning of each year and that dividends are collected at the end of each year.

While income growth is our primary focus, we include capital appreciation for demonstration purposes using Jack Bogle’s long-term return framework:

Future Market Returns = Dividend Yield + Earnings Growth ± Change in P/E Ratio

In our projections, we assume an 11.5% annualized capital return, based on the following rationale:

• Earnings growth and dividend growth are aligned over time

• Investments are made in high-quality dividend growth companies at sensible valuations

This framework provides a realistic and conservative estimate of long-term portfolio outcomes, reinforcing the central premise of this strategy: disciplined dividend growth investing can produce both rising income and competitive long-term returns.

Read more

Summary

This is not a stock-picking newsletter!

It’s a behind-the-scenes look at how a dividend growth portfolio is built, maintained, and improved over time.

Welcome to this week’s MP Market Review.

Before we begin, a quick explanation of the name.

Many years ago, when I first discovered dividend growth investing, I came across a quote that stopped me in my tracks:

“You have a pair of pants. In the left pocket, you have $100. You take $1 out of the left pocket and put it in the right pocket. You now have $101. There is no diminution of dollars in your left pocket. That is one magic pair of pants.”

That is dividend growth investing in its simplest form.

When a quality company pays a dividend, cash moves from the company’s pocket to yours, yet your ownership stake remains intact. As earnings grow, dividends tend to grow. As dividends grow, share prices often follow. Reinvest those dividends into additional shares, and the cycle accelerates: more shares generate more dividends, which buy even more shares.

That’s the magic.

It’s why we call this newsletter Magic Pants Dividend Growth Investing.

Every week, we track the companies on The List, our curated watchlist of Canadian dividend growth businesses selected for their ability to produce rising income over time. While we also publish a U.S. edition each month, Canada remains our primary hunting ground.

Our objective is straightforward:

Grow dividend income by 7-10%+ annually while achieving long-term capital appreciation that matches or exceeds the TSX Composite in Canada and the S&P 500 in the United States.

What follows is not theory.

It is the real-world application of a dividend growth strategy using real money, real positions, and real results.

Markets create an endless stream of noise. We ignore most of it.

Instead, we focus on a handful of metrics that tell us whether our process is working. No predictions. No forecasts. No crystal ball.

Just results.

The magic is in the dividend. Dividends lead. Prices follow.

This Week’s Scorecard

MP Wealth-Builder Model Portfolio (Canada)

• Annualized Total Return: +17.34% since inception

• Total Return (includes dividends): +15.34 % year-to-date

• Current Yield: 3.2%

The List (Canada)

• Dividend Income Growth: +6.6% year-to-date

• Capital Appreciation: +7.3% year-to-date

• Dividend Announcements Last Week: None

• Earnings Reports Last Week: One

• Earnings Reports This Week: None

DGI Clipboard

“It was quite a while, though, before I realized dividend growth investing had the double double. Our income goes up and our capital rises too.

- Tom Connolly

Four Stocks. Four Years. Four Doubles.

When most people discover dividend growth investing, they focus on one thing: the growing income stream. That makes sense. Watching your dividend income rise year after year, regardless of what the stock market is doing, is both motivating and reassuring.

But something interesting often happens along the way.

The income gets all the attention, while the capital appreciation quietly steals the show.

One of the core principles behind Magic Pants is simple: the magic is in the dividend. As the dividend grows, so does the price. Companies that consistently increase their dividends are usually growing earnings, generating more cash, and creating greater value for shareholders. Over long periods, stock prices tend to follow that business performance.

When we launched our Canadian Model Portfolio just over four years ago, our primary objective wasn’t to double our money. Our goal was to build a dependable, inflation-fighting stream of dividend income that could one day fund retirement.

The capital gains have been a welcome by-product.

Today, four holdings in our portfolio (TD-T, RY-T, TRP-T and TIH-T) have already generated total returns exceeding 100%. Several others are well on their way.

What’s remarkable is that none of these companies were speculative technology stocks or turnaround stories. They were established, high-quality businesses purchased at sensible valuations and then given the time to do what great companies do: compound.

This illustrates one of the biggest misconceptions about dividend investing. Critics often assume that receiving dividends comes at the expense of capital appreciation. In reality, the opposite is frequently true. Businesses capable of raising their dividend year after year are often among the market’s strongest wealth creators.

Investors who focus only on yield miss the bigger picture. The real objective is to own companies that can grow both their earnings and their dividends for decades. The rising income provides confidence during market corrections, while the growing earnings eventually pull the share price higher.

That is why patience remains one of the most valuable investing skills.

Our original thesis on companies like Canadian National Railway and Alimentation Couche-Tard took time to unfold. There were long periods when it appeared little was happening. Yet beneath the surface, the businesses continued to grow, dividends continued to increase, and eventually the market recognized their value.

Takeaway

Dividend growth investing isn’t simply about collecting quarterly cheques.

It is about partnering with exceptional businesses that reward you twice. First, through a steadily growing income stream. Second, through capital appreciation that often exceeds expectations. If you remain patient and allow compounding to work, you may find that your biggest surprise isn’t how much your dividends grow. It may be how much your portfolio grows along with them.

Looking for a helping hand in the market? Members of Magic Pants Dividend Growth Investing get exclusive ideas and guidance to navigate any climate.

The Magic Pants model portfolios (Canadian and American) are real-money, dividend-growth portfolios funded with actual capital and executed in live accounts. Every position shown is owned, sized, and tracked in real time using our disciplined DGI process.

Become a PAID subscriber, and I’ll show you exactly how I do it. In addition, gain full access to this post and exclusive, subscriber-only content. We do the work; you stay in control!

Subscribe now

DGI Scorecard

The Magic Pants 2026 list (The List) includes 26 Canadian dividend growth stocks, and our new American watchlist (The List-USA) contains 28 companies. Here are the criteria to be considered a candidate on our watchlists:

1. Dividend growth streak: 10 years or more.

2. Market cap: Minimum one billion dollars.

3. Diversification: Limit of five companies per sector, preferably two per industry.

4. Cyclicality: Exclude REITs and pure-play energy companies due to high cyclicality.

Based on these criteria, companies are added or removed from ‘The List’ annually on January 1. Prices and dividends are updated weekly.

‘The List’ is not a portfolio but a coaching tool that helps us think about ideas and risk manage our model portfolio. We own some but not all the companies on ‘The List’. In other words, we might want to buy these companies when valuation looks attractive.

Our newsletter provides readers with a comprehensive insight into the implementation and advantages of our dividend growth investing strategy. This evidence-based, unbiased approach empowers DIY investors to outperform both actively managed dividend funds and passively managed indexes and dividend ETFs over longer-term horizons.

Note: In the last week of every month, I will show the updated watchlist for our American dividend growers, The List-USA. It will be shown after the Canadian watchlist below.

Performance of 'The List'

The dividend growth for The List remained unchanged last week, with an average YTD increase of 6.6% (income).

The price of The List was up last week and now stands at +7.3% YTD (capital).

Top Performers Last Week:

• Alimentation Couche-Tard Inc. (ATD-T), up +13.43%.

• Waste Connections (WCN-N), up +9.05%.

• Franco Nevada (FNV-N), up +7.06%.

Worst Performer Last Week:

• Canadian Natural Resources (CNQ-T), down -4.5%.

From breaking news to quarterly earnings reports, we break down the week’s biggest headlines to help you make sense of the market.

Read more

Summary

This is not a stock-picking newsletter!

It’s a behind-the-scenes look at how a dividend growth portfolio is built, maintained, and improved over time.

Welcome to this week’s MP Market Review.

Before we begin, a quick explanation of the name.

Many years ago, when I first discovered dividend growth investing, I came across a quote that stopped me in my tracks:

“You have a pair of pants. In the left pocket, you have $100. You take $1 out of the left pocket and put it in the right pocket. You now have $101. There is no diminution of dollars in your left pocket. That is one magic pair of pants.”

That is dividend growth investing in its simplest form.

When a quality company pays a dividend, cash moves from the company’s pocket to yours, yet your ownership stake remains intact. As earnings grow, dividends tend to grow. As dividends grow, share prices often follow. Reinvest those dividends into additional shares, and the cycle accelerates: more shares generate more dividends, which buy even more shares.

That’s the magic.

It’s why we call this newsletter Magic Pants Dividend Growth Investing.

Every week, we track the companies on The List, our curated watchlist of Canadian dividend growth businesses selected for their ability to produce rising income over time. While we also publish a U.S. edition each month, Canada remains our primary hunting ground.

Our objective is straightforward:

Grow dividend income by 7-10%+ annually while achieving long-term capital appreciation that matches or exceeds the TSX Composite in Canada and the S&P 500 in the United States.

What follows is not theory.

It is the real-world application of a dividend growth strategy using real money, real positions, and real results.

Markets create an endless stream of noise. We ignore most of it.

Instead, we focus on a handful of metrics that tell us whether our process is working. No predictions. No forecasts. No crystal ball.

Just results.

The magic is in the dividend. Dividends lead. Prices follow.

This Week’s Scorecard

MP Wealth-Builder Model Portfolio (Canada)

• Annualized Total Return: +16.46% since inception

• Total Return (includes dividends): +11.82% year-to-date

• Current Yield: 3.2%

The List (Canada)

• Dividend Income Growth: +6.6% year-to-date

• Capital Appreciation: +5.0% year-to-date

• Dividend Announcements Last Week: None

• Earnings Reports Last Week: None

• Earnings Reports This Week: One

DGI Clipboard

”Once valuations become unusually rich, disappointingly long-term returns are baked in the cake.”

- John Hussman

Valuation Matters: When Quality Companies Become Expensive

Here’s a simple thought experiment. Imagine a business that generated just $50,000 in revenue last year and lost $13,200 in the process. Interested in buying it, you ask the owner what he wants. His answer? A mere $7.5 million.

You’d probably conclude he had completely lost touch with reality. Yet, scaled up, those economics are surprisingly similar to what investors are valuing SpaceX at today. The numbers are vastly larger, but the underlying relationship between sales, losses, and valuation isn’t all that different.

I commented in last week’s newsletter that the Canadian market was beginning to look a little frothy. Valuation remains one of the two pillars of our process, second only to quality.

Throughout the build-out of our Canadian model portfolio, we have been reluctant to sell quality dividend growers unless the underlying business changed, earnings growth slowed materially, or the dividend was cut. That discipline has served us well. One of the biggest mistakes investors make is selling their winners too early. Quality businesses often continue compounding long after they appear expensive.

For investors still accumulating, patience and new contributions usually solve most valuation concerns. But for more conservative investors, or retirees without fresh capital to deploy, there can be a case for trimming positions when they become oversized or when valuations become stretched. Today, three of our largest holdings meet one or both of those criteria.

Understanding Valuation

We use FAST Graphs to visualize how companies have historically been valued. Looking back over ten to twelve years allows us to see how the market has priced a business through multiple economic cycles. We prefer buying companies when they are trading within, or below, their normal valuation corridor.

On the charts below:

• Black line: Share price

• Yellow line: Dividend

• Orange line: Fair value (roughly 15 times earnings)

• Blue line: Normal historical valuation

• Dashed lines: Analyst estimates

• Green area: Earnings

• Green dots: Purchases

In all three charts, the black price line has moved noticeably above the blue normal valuation line. Historically, these two lines have tended to move much closer together. That doesn’t mean these companies are poor businesses. It simply means investors are currently willing to pay more for each dollar of earnings than they have in the past.

Position Size Matters Too

Our business plan limits core positions to 8% of the portfolio. Toronto-Dominion Bank has grown beyond that level and offers room for trimming. Royal Bank and TC Energy are approaching their maximum allocations, although both still remain within our guidelines.

Despite their richer valuations, all three companies continue to generate growing dividend streams. Their growth yields are well ahead of inflation, and that rising income remains the primary reason we own them.

What Should You Do?

There is no universal answer.

You could trim all three positions back to a 4% weighting and redeploy the proceeds elsewhere. You could simply reduce TD Bank to our 8% maximum and let the others run. You might prefer to raise some cash for an upcoming vacation or maintain dry powder for the next market correction.

Or you may decide to do nothing at all and continue collecting the growing dividends, accepting that short-term price declines are part of the process.

Dividend growth investing (DGI) gives investors options. The beauty of those options is that they are not driven by panic or prediction. They are driven by planning.

Define your approach before markets become emotional. Stick to your process. Judge yourself by long-term outcomes, not short-term fluctuations.

And don’t forget to enjoy the fruits of your portfolio along the way. After all, the purpose of building wealth is not simply to accumulate more money; it is to create more freedom to do the things that matter most.

Takeaway

The goal is not to predict market corrections or sell in panic, but to manage risk thoughtfully and according to a predetermined plan. Whether you choose to trim, hold, or raise cash, the key is to make those decisions deliberately and stay focused on the growing stream of dividend income that quality businesses provide.

Looking for a helping hand in the market? Members of Magic Pants Dividend Growth Investing get exclusive ideas and guidance to navigate any climate.

The Magic Pants model portfolios (Canadian and American) are real-money, dividend-growth portfolios funded with actual capital and executed in live accounts. Every position shown is owned, sized, and tracked in real time using our disciplined DGI process.

Become a PAID subscriber, and I’ll show you exactly how I do it. In addition, gain full access to this post and exclusive, subscriber-only content. We do the work; you stay in control!

Subscribe now

DGI Scorecard

The Magic Pants 2026 list (The List) includes 26 Canadian dividend growth stocks, and our new American watchlist (The List-USA) contains 28 companies. Here are the criteria to be considered a candidate on our watchlists:

1. Dividend growth streak: 10 years or more.

2. Market cap: Minimum one billion dollars.

3. Diversification: Limit of five companies per sector, preferably two per industry.

4. Cyclicality: Exclude REITs and pure-play energy companies due to high cyclicality.

Based on these criteria, companies are added or removed from ‘The List’ annually on January 1. Prices and dividends are updated weekly.

‘The List’ is not a portfolio but a coaching tool that helps us think about ideas and risk manage our model portfolio. We own some but not all the companies on ‘The List’. In other words, we might want to buy these companies when valuation looks attractive.

Our newsletter provides readers with a comprehensive insight into the implementation and advantages of our dividend growth investing strategy. This evidence-based, unbiased approach empowers DIY investors to outperform both actively managed dividend funds and passively managed indexes and dividend ETFs over longer-term horizons.

Note: In the last week of every month, I will show the updated watchlist for our American dividend growers, The List-USA. It will be shown after the Canadian watchlist below.

Performance of 'The List'

The dividend growth for The List remained unchanged last week, with an average YTD increase of 6.6% (income).

The price of The List was down last week and now stands at +5.0% YTD (capital).

Top Performers Last Week:

• Toromont Industries (TIH-T), up +14.09%.

• CCL Industries Inc. (CCL-B-T), up +4.79%.

• Franco Nevada (FNV-N), up +4.68%.

Worst Performer Last Week:

• TFI International (TFII-T), down -9.35%.

From breaking news to quarterly earnings reports, we break down the week’s biggest headlines to help you make sense of the market.

Read more

Each quarter, we share a full performance update so you can see exactly how a disciplined dividend growth strategy builds wealth over time. It is a clear, numbers-first look at how we construct durable, income-producing portfolios step by step, brick by brick.

This free summary is drawn from the full portfolio letter sent earlier in the month to paid subscribers. It offers a small window into what you could be using every day to strengthen your own results.

If you are still on the free plan, consider what you are missing: our model portfolio performance business plan, our research framework, and the real-time decisions that drive long-term compounding.

Paid subscribers get the full experience:

• Real buy and sell alerts

• Exact position sizes for every trade

• Full access to our Premium Content library, where we break down the strategy we use to build growing income year after year

Join us and invest alongside a process designed to compound, protect, and grow your wealth. We do the work, you stay in control!

Subscribe now

📢 MP Wealth-Builder Model Portfolio (CDN) Update – April 30, 2026 📢

Welcome to the latest update on our Canadian real-money dividend growth portfolio! As we track our progress, I’m excited to share how we measure up against our long-term projections.

🚀 Portfolio Overview
Launched on May 1, 2022, this portfolio was built with a clear vision: to create a reliable and growing income stream. Our investment approach includes:

✅ An initial capital commitment of $100,000 (deployed over four years)
✅ Annual contributions of $12,000 (beginning in year two)
✅ Full dividend reinvestment to maximize compounding

🎯 Our Objective
Our objective for our Canadian portfolio is simple: grow dividend income by 7–10%+ annually while delivering capital appreciation that matches or exceeds the TSX Composite Index over a full market cycle.

We’re also on track to grow the value of our portfolio beyond $500,000 in less than a decade!

In an era of instant gratification, this approach reinforces the value of staying the course and letting time do the heavy lifting.

📊 How We Invest
We focus on Canada’s highest-quality dividend growth companies, using a disciplined selection process to deploy and monitor capital effectively.

💡 For Conservative DIY Investors, This project is built for long-term, income-focused investors who believe in building wealth the traditional way by owning assets that produce reliable and growing income. Dividend growth is at the core of our strategy, and history shows that steadily rising income tends to pull capital appreciation along.

In this update, I’ve included:

✅ Total returns
✅ Current holdings & position sizes
✅ Sector weightings
✅ Illustrative charts tracking our journey

Portfolio Total Returns (CDN)

Portfolio Holdings and Position Sizes (CDN)

🚀 Where We Stand On Deploying Our Capital

We have now deployed essentially all of the planned capital outlined in the original business plan.

That includes:

• initial $100,000

• annual contributions

• reinvested dividends

• realized gains

Approximately $4,000 remains uninvested and will be carried forward into the next fiscal period.

This matters because deployment timing affects long-term compounding.

One lesson from this portfolio is clear:

Getting quality capital to work earlier matters.

Projections as per Business Plan (CDN)

📈 Visualizing the Journey

At this stage, both income growth and capital appreciation remain aligned with the original business plan for the Magic Pants Wealth-Builder Model Portfolio (CDN).

That is not accidental.

It is process.

Share

Summary

This is not a stock-picking newsletter!

It’s a behind-the-scenes look at how a dividend growth portfolio is built, maintained, and improved over time.

Welcome to this week’s MP Market Review.

Before we begin, a quick explanation of the name.

Many years ago, when I first discovered dividend growth investing, I came across a quote that stopped me in my tracks:

“You have a pair of pants. In the left pocket, you have $100. You take $1 out of the left pocket and put it in the right pocket. You now have $101. There is no diminution of dollars in your left pocket. That is one magic pair of pants.”

That is dividend growth investing in its simplest form.

When a quality company pays a dividend, cash moves from the company’s pocket to yours, yet your ownership stake remains intact. As earnings grow, dividends tend to grow. As dividends grow, share prices often follow. Reinvest those dividends into additional shares, and the cycle accelerates: more shares generate more dividends, which buy even more shares.

That’s the magic.

It’s why we call this newsletter Magic Pants Dividend Growth Investing.

Every week, we track the companies on The List, our curated watchlist of Canadian dividend growth businesses selected for their ability to produce rising income over time. While we also publish a U.S. edition each month, Canada remains our primary hunting ground.

Our objective is straightforward:

Grow dividend income by 7-10%+ annually while achieving long-term capital appreciation that matches or exceeds the TSX Composite in Canada and the S&P 500 in the United States.

What follows is not theory.

It is the real-world application of a dividend growth strategy using real money, real positions, and real results.

Markets create an endless stream of noise. We ignore most of it.

Instead, we focus on a handful of metrics that tell us whether our process is working. No predictions. No forecasts. No crystal ball.

Just results.

The magic is in the dividend. Dividends lead. Prices follow.

This Week’s Scorecard

MP Wealth-Builder Model Portfolio (Canada)

• Annualized Total Return: +16.46% since inception

• Total Return (includes dividends): +11.99% year-to-date

• Current Yield: 3.2%

The List (Canada)

• Dividend Income Growth: +6.6% year-to-date

• Capital Appreciation: +5.7% year-to-date

• Dividend Announcements Last Week: None

• Earnings Reports Last Week: One

• Earnings Reports This Week: None

DGI Clipboard

“Current yield, using its own historic yield as a guide, is, in my view, a fine valuation measure.”

— Tom Connolly

Timely Ten: Quality Companies on Sale South of the Border

There was no change to the Canadian Timely Ten this month. The same ten companies continue to rank as the most undervalued names on our watchlist. What is notable, however, is that nine of the ten stocks actually increased in price over the past month. Only CCL Industries (CCL-B-T) moved lower.

That tells us one thing: value is becoming increasingly difficult to find in the Canadian market. In fact, only the top five companies on the Timely Ten are currently trading above their historical high yields, one of our preferred indicators of undervaluation. By most measures, the Canadian market is looking increasingly frothy.

This is not necessarily a reason to sell quality companies, but it does suggest investors should be increasingly selective when deploying new capital. As dividend growth investors, our objective is not simply to own great businesses, but to own them at sensible prices. When valuations become stretched, future returns often become more dependent on earnings growth and less on multiple expansion. Patience remains an important part of the process.

The American Timely Ten tells a different story. There was considerably more movement up and down the rankings as investors continued to rotate between sectors. Wisconsin Energy (WEC-N) and Home Depot (HD-N) both rallied during the month, pushing them off the list.

Replacing them were two companies already in our American Model Portfolio: Intercontinental Exchange (ICE-N) and Air Products & Chemicals (APD-N). Both experienced share price weakness and have now reached valuation levels that warrant closer attention. While short-term price declines can be uncomfortable, they are often the source of tomorrow’s best long-term opportunities.

One company that continues to intrigue me is Intuit (INTU-Q). The shares have been under significant pressure and climbed further up our undervaluation rankings this month. Intuit now trades at roughly one-third of its historical valuation, a remarkable discount for a business with its quality, competitive advantages, and long-term growth profile.

Whether the market is correctly pricing a slowdown in future growth or simply overreacting to near-term AI concerns remains to be seen. Either way, Intuit is quickly becoming one of the more interesting companies on our American watchlist. As always, we will continue to monitor the fundamentals, dividend growth prospects, and valuation before committing additional capital.

Note: goeasy Ltd.’s dividend has been suspended, so we have moved it to the bottom of the list.

Background

Step three in our process involves regularly monitoring our quality dividend growers, which can become quite challenging depending on the number of companies we track. Fortunately, we rely on ‘The List’ rather than the index’s vast array of stocks, which streamlines our task. Nevertheless, we continually seek methods to enhance our efficiency. Through dividend yield theory, we’ve discovered an approach that has proven remarkably effective in supporting our efforts over the years.

Dividend yield theory is a simple and intuitive approach to valuing dividend growth stocks. It suggests that the dividend yield of quality dividend growth stocks tends to revert to the mean over time, assuming that the underlying business model remains stable. In practical terms, if a stock pays a dividend yield above its ten-year average annual yield, its price will likely increase to return the yield to its historical average. Given that price and yield move in opposite directions, this theory helps us identify stocks poised for a favourable price correction.

We have pre-screened our candidates using the criteria we initially laid out in building our watchlists. This helps us considerably narrow the universe of investable stocks.

1. Dividend growth streak: 10 years or more.

2. Market cap: Minimum one billion dollars.

3. Diversification: Limit of five companies per sector, preferably two per industry.

4. Cyclicality: Exclude REITs and pure-play energy companies due to high cyclicality.

Next, we rank our Canadian and American watchlists based on how far each stock’s price is below its fair value (Low Price), as determined by dividend yield theory. To find fair value, divide the current dividend (Dividend) by the stock’s historical high yield (High Yield).

Since price and yield move in opposite directions, a lower price results in a higher yield, and vice versa. The ten companies above the thick black line have current prices (Price) below their fair values (Low Price). Put simply, these stocks have a current dividend yield higher than their historical high. According to dividend yield theory, these companies are sensibly priced and have the highest probability of short-term price increases. These are our Timely Ten.

Takeaway

The U.S. market continues to offer a more fertile hunting ground for dividend growth investors. While Canadian opportunities remain limited, an increasing number of quality American businesses are trading at prices that justify further research.

Looking for a helping hand in the market? Members of Magic Pants Dividend Growth Investing get exclusive ideas and guidance to navigate any climate.

The Magic Pants model portfolios (Canadian and American) are real-money, dividend-growth portfolios funded with actual capital and executed in live accounts. Every position shown is owned, sized, and tracked in real time using our disciplined DGI process.

Become a PAID subscriber, and I’ll show you exactly how I do it. In addition, gain full access to this post and exclusive, subscriber-only content. We do the work; you stay in control!

Subscribe now

DGI Scorecard

The Magic Pants 2026 list (The List) includes 26 Canadian dividend growth stocks, and our new American watchlist (The List-USA) contains 28 companies. Here are the criteria to be considered a candidate on our watchlists:

1. Dividend growth streak: 10 years or more.

2. Market cap: Minimum one billion dollars.

3. Diversification: Limit of five companies per sector, preferably two per industry.

4. Cyclicality: Exclude REITs and pure-play energy companies due to high cyclicality.

Based on these criteria, companies are added or removed from ‘The List’ annually on January 1. Prices and dividends are updated weekly.

‘The List’ is not a portfolio but a coaching tool that helps us think about ideas and risk manage our model portfolio. We own some but not all the companies on ‘The List’. In other words, we might want to buy these companies when valuation looks attractive.

Our newsletter provides readers with a comprehensive insight into the implementation and advantages of our dividend growth investing strategy. This evidence-based, unbiased approach empowers DIY investors to outperform both actively managed dividend funds and passively managed indexes and dividend ETFs over longer-term horizons.

Note: In the last week of every month, I will show the updated watchlist for our American dividend growers, The List-USA. It will be shown after the Canadian watchlist below.

Performance of 'The List'

The dividend growth for The List remained unchanged last week, with an average YTD increase of 6.6% (income).

The price of The List was up last week and now stands at +5.7% YTD (capital).

Top Performers Last Week:

• Dollarama Inc. (DOL-T), up +5.36%.

• Canadian Tire (CTC-A-T), up +4.56%.

• Manulife Financial (MFC-T), up +4.30%.

Worst Performer Last Week:

• Toromont Industries (TIH-T), down -5.97%.

From breaking news to quarterly earnings reports, we break down the week’s biggest headlines to help you make sense of the market.

Read more

I wanted to let you know that I just added another high-quality dividend growth company to our MP Wealth-Builder Model Portfolio (USA) a few minutes ago.

This company is a Dividend Achiever with an impressive 22-year streak of annual dividend increases. More importantly, management recently raised the dividend by 14.5%, a strong signal that the business remains healthy and that this growth streak is likely to continue.

After following the company for some time, we have finally found the shares to be valued at a level that meets our “sensible price” criteria. When quality, dividend growth, and valuation align, we act.

If you’ve been considering upgrading your subscription, remember that some of the best opportunities are identified before they become obvious to the broader market. Paid subscribers receive every buy, sell, trim, and portfolio update in real time, allowing them to follow our process as it unfolds rather than reading about it after the fact.

Read more

Summary

This is not a stock-picking newsletter.

It’s a behind-the-scenes look at how a dividend growth portfolio is built, maintained, and improved over time.

Welcome to this week’s MP Market Review. Each week, we track the Canadian dividend growth companies on The List, our curated watchlist of businesses designed to produce rising income. While we also publish a U.S. edition monthly, Canada remains our training ground.

Our objective is simple: grow dividend income by 7–10%+ annually while delivering capital appreciation that matches or exceeds the TSX Composite in Canada and the S&P 500 for our U.S. investors over a full market cycle.

What you’re about to read isn’t theory. It’s the real-time application of a dividend growth strategy using real money, with a clear objective: growing income first and letting capital growth follow.

Markets generate a lot of noise. We ignore most of it.

Instead, we track a small set of metrics that tell us whether our dividend growth strategy is working in real time. No forecasts. No opinions. Just results.

Here they are:

• Dividend income from The List: +6.6% year-to-date

• Capital value: +5.2% year-to-date

• Dividend announcements last week: None

• Earnings reports last week: None

• Earnings reports this week: One

DGI Clipboard

“The safest withdrawal rate is the dividend yield.”

- Lowell Miller

Build an Income Machine, Not a Withdrawal Strategy

I was having drinks with a friend last week when he told me he had just met with a financial planner.

The planner showed him that, based on the capital he has saved today, he could enjoy a comfortable retirement using a 4% withdrawal strategy.

I have to admit, I was a little surprised.

Not because the math doesn’t work, but because financial professionals still rely on the 4% Rule as the foundation of their retirement planning.

The 4% Rule dates back to research conducted in the 1990s. The idea is straightforward. In your first year of retirement, you withdraw 4% of your portfolio. Each year thereafter, you increase that withdrawal by the rate of inflation. Historically, a diversified portfolio of stocks and bonds had a reasonable chance of lasting for at least 30 years using this approach.

The hope is that investment returns replenish the reservoir quickly enough that you never run out.

The problem with most retirement withdrawal strategies (including the 4% Rule) is that they depend heavily on the price of stocks at the exact moment you need to sell them.

What happens if the market declines 20%, 30%, or even 40% just before you retire?

Even worse, what if those poor returns occur during the first few years of retirement?

Financial planners call this sequence-of-returns risk. Two retirees can earn the exact same average return over retirement and end up with dramatically different outcomes depending on when those returns occur.

If you are forced to sell shares during a market downturn to fund your lifestyle, you permanently reduce the number of income-producing assets you own. Fewer shares mean less participation in the eventual recovery. The damage can be difficult to reverse.

Dividend growth investing approaches retirement differently.

Instead of relying primarily on asset sales, the focus is on building a portfolio of high-quality companies that pay reliable, growing dividends. The goal is to live increasingly off the cash flow generated by the portfolio rather than the sale of the portfolio itself.

When markets decline, dividends from quality companies tend to be far more stable than share prices. While prices can fluctuate wildly from year to year, many dividend growers continue to raise their dividends through recessions, bear markets, and periods of uncertainty.

This creates an important psychological advantage for retirees.

When your income continues arriving regardless of market headlines, you are less likely to panic and less likely to sell assets at precisely the wrong time.

Think of it this way.

Traditional withdrawal strategies ask investors to spend their capital.

Dividend growth investing encourages investors to spend the income generated by their capital.

That distinction may seem subtle, but over a retirement that lasts twenty or thirty years, it can make a meaningful difference.

This is why we focus so much on building an income machine.

Not because market prices don’t matter.

They do.

But when retirement arrives, it is comforting to know that your lifestyle is supported by a growing stream of dividend income rather than the unpredictable mood swings of the stock market.

Takeaway

The best retirement plan isn’t one that depends on selling shares.

It’s one that allows you to keep owning them.

Looking for a helping hand in the market? Members of Magic Pants Dividend Growth Investing get exclusive ideas and guidance to navigate any climate.

The Magic Pants model portfolios (Canadian and American) are real-money, dividend-growth portfolios funded with actual capital and executed in live accounts. Every position shown is owned, sized, and tracked in real time using our disciplined DGI process.

Become a PAID subscriber, and I’ll show you exactly how I do it. In addition, gain full access to this post and exclusive, subscriber-only content. We do the work; you stay in control!

Subscribe now

DGI Scorecard

The Magic Pants 2026 list (The List) includes 26 Canadian dividend growth stocks, and our new American watchlist (The List-USA) contains 28 companies. Here are the criteria to be considered a candidate on our watchlists:

1. Dividend growth streak: 10 years or more.

2. Market cap: Minimum one billion dollars.

3. Diversification: Limit of five companies per sector, preferably two per industry.

4. Cyclicality: Exclude REITs and pure-play energy companies due to high cyclicality.

Based on these criteria, companies are added or removed from ‘The List’ annually on January 1. Prices and dividends are updated weekly.

‘The List’ is not a portfolio but a coaching tool that helps us think through ideas and manage risk in our model portfolio. We own some, but not all, of the companies on ‘The List’. In other words, we might want to buy these companies when the valuation looks attractive.

Our newsletter provides readers with a comprehensive insight into the implementation and advantages of our dividend growth investing strategy. This evidence-based, unbiased approach empowers DIY investors to outperform both actively managed dividend funds and passively managed indexes and dividend ETFs over longer-term horizons.

Note: In the last week of every month, I will show the updated watchlist for our American dividend growers, The List-USA. It will be shown after the Canadian watchlist below.

Performance of 'The List'

The dividend growth for The List remained unchanged last week, with an average YTD increase of 6.6% (income).

The price of The List was up last week and now stands at +5.2% YTD (capital).

Top Performers Last Week:

• Loblaw Companies Limited (L-T), up +6.26%.

• Alimentation Couche-Tard Inc. (ATD-T), up +6.05%.

• Stella-Jones Inc. (SJ-T), up +5.60%.

Worst Performer Last Week:

• CCL Industries Inc. (CCL-B-T), down -6.22%.

From breaking news to quarterly earnings reports, we break down the week’s biggest headlines to help you make sense of the market.

Read more

Summary

This is not a stock-picking newsletter.

It’s a behind-the-scenes look at how a dividend growth portfolio is built, maintained, and improved over time.

Welcome to this week’s MP Market Review. Each week, we track the Canadian dividend growth companies on The List, our curated watchlist of businesses designed to produce rising income. While we also publish a U.S. edition monthly, Canada remains our training ground.

Our objective is simple: grow dividend income by 7–10%+ annually while delivering capital appreciation that matches or exceeds the TSX Composite in Canada and the S&P 500 for our U.S. investors over a full market cycle.

What you’re about to read isn’t theory. It’s the real-time application of a dividend growth strategy using real money, with a clear objective: growing income first and letting capital growth follow.

Markets generate a lot of noise. We ignore most of it.

Instead, we track a small set of metrics that tell us whether our dividend growth strategy is working in real time. No forecasts. No opinions. Just results.

Here they are:

• Dividend income from The List: +6.6% year-to-date

• Capital value: +4.1% year-to-date

• Dividend announcements last week: Two

• Earnings reports last week: Two

• Earnings reports this week: None

DGI Clipboard

“The people who “don’t have time” and the people who “always find the time” have the same amount of time.”

- Justin Welsh

Retirement Is Not an Age. It’s the Moment Work Becomes Optional.

I was fortunate to sell my tech services business at age 56.

After completing a two-year earn-out, I walked away from the company I had spent twenty-five years building.

People often assume the confidence to retire came from the lump-sum payment I received when the business was sold.

It didn’t.

The real confidence came from something I had been building for more than two decades before that.

A cash flow machine.

Most people think retirement is an age.

Sixty-five.

Maybe sixty.

If they are lucky, fifty-five.

We have been conditioned to believe that retirement begins when the calendar says it does.

Work hard for forty years.

Save what you can.

Hope the markets cooperate.

Then one day, someone hands you permission to stop working.

I disagree.

Retirement is not an age.

Retirement is freedom.

It is the moment your assets generate enough income to cover your lifestyle.

Whether you are 35, 55, or 75 is irrelevant.

That simple shift in thinking changes everything.

When you define retirement as freedom rather than age, your focus shifts away from accumulating a giant pile of money and toward building income-producing assets.

The goal is no longer to reach a magic number.

The goal is to create an income machine.

One that works whether you do or not.

For most people, employment income is their primary source of cash flow.

They trade their time, energy, and expertise for a paycheque.

There is nothing wrong with that.

In fact, employment income is often the fuel that allows wealth to be built in the first place.

The problem is simple.

Employment income stops when you stop working.

Dividend income is different.

A quality dividend growth company can continue sending cash to your account whether you are working, golfing, travelling, sleeping, or spending time with your grandchildren.

Every share you own becomes a tiny employee working on your behalf.

One share may not seem like much.

Ten shares are still modest.

But over time, as you accumulate ownership in high-quality businesses and those businesses increase their dividends year after year, something remarkable begins to happen.

Your income starts growing even when you are no longer contributing additional capital.

The companies do the work.

The magic is in the dividend.

As the dividend grows, so does your income.

And over long periods of time, the stock price usually follows.

Dividends lead.

Prices follow.

That simple idea has guided my investing philosophy for decades.

Takeaway

Financial freedom rarely arrives all at once.

It arrives gradually.

One dividend payment.

One dividend increase.

One quality company at a time.

The progress often feels insignificant in the early years.

Then one day you look up and realize your portfolio is producing meaningful income.

A few years later, it is producing even more.

Eventually, there comes a point when your assets begin to carry more of the load than your labour.

That is when the conversation changes.

That is when work becomes optional.

That is retirement.

And retirement has nothing to do with age.

Looking for a helping hand in the market? Members of Magic Pants Dividend Growth Investing get exclusive ideas and guidance to navigate any climate.

The Magic Pants model portfolios (Canadian and American) are real-money, dividend-growth portfolios funded with actual capital and executed in live accounts. Every position shown is owned, sized, and tracked in real time using our disciplined DGI process.

Become a PAID subscriber, and I’ll show you exactly how I do it. In addition, gain full access to this post and exclusive, subscriber-only content. We do the work; you stay in control!

Subscribe now

DGI Scorecard

The Magic Pants 2026 list (The List) includes 26 Canadian dividend growth stocks, and our new American watchlist (The List-USA) contains 28 companies. Here are the criteria to be considered a candidate on our watchlists:

1. Dividend growth streak: 10 years or more.

2. Market cap: Minimum one billion dollars.

3. Diversification: Limit of five companies per sector, preferably two per industry.

4. Cyclicality: Exclude REITs and pure-play energy companies due to high cyclicality.

Based on these criteria, companies are added or removed from ‘The List’ annually on January 1. Prices and dividends are updated weekly.

‘The List’ is not a portfolio but a coaching tool that helps us think through ideas and manage risk in our model portfolio. We own some, but not all, of the companies on ‘The List’. In other words, we might want to buy these companies when the valuation looks attractive.

Our newsletter provides readers with a comprehensive insight into the implementation and advantages of our dividend growth investing strategy. This evidence-based, unbiased approach empowers DIY investors to outperform both actively managed dividend funds and passively managed indexes and dividend ETFs over longer-term horizons.

Note: In the last week of every month, I will show the updated watchlist for our American dividend growers, The List-USA. It will be shown after the Canadian watchlist below.

Performance of 'The List'

The dividend growth of The List was up last week, with an average YTD increase of 6.6% (income).

The price of The List was down last week and now stands at +3.5% YTD (capital).

Top Performers Last Week:

• goeasy Ltd. (GSY-T), up +15.05%.

• Stella-Jones Inc. (SJ-T), up +4.58%.

• TFI International (TFII-N), up +4.09%.

Worst Performer Last Week:

• Canadian Natural Resources (CNQ-T), down -6.75%.

From breaking news to quarterly earnings reports, we break down the week’s biggest headlines to help you make sense of the market.

Read more

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Summary

This is not a stock-picking newsletter.

It’s a behind-the-scenes look at how a dividend growth portfolio is built, maintained, and improved over time.

Welcome to this week’s MP Market Review. Each week, we track the Canadian dividend growth companies on The List, our curated watchlist of businesses designed to produce rising income. While we also publish a U.S. edition monthly, Canada remains our training ground.

Our objective is simple: grow dividend income by 7–10%+ annually while delivering capital appreciation that matches or exceeds the TSX Composite in Canada and the S&P 500 for our U.S. investors over a full market cycle.

What you’re about to read isn’t theory. It’s the real-time application of a dividend growth strategy using real money, with a clear objective: growing income first and letting capital growth follow.

Markets generate a lot of noise. We ignore most of it.

Instead, we track a small set of metrics that tell us whether our dividend growth strategy is working in real time. No forecasts. No opinions. Just results.

Here they are:

• Dividend income from The List: +6.4% year-to-date

• Capital value: +4.1% year-to-date

• Dividend announcements last week: None

• Earnings reports last week: None

• Earnings reports this week: Two

DGI Clipboard

“Far more money has been lost by investors preparing for corrections, or trying to anticipate corrections, than has been lost in corrections themselves.”

— Peter Lynch

The All-Canadian DGI Portfolio: Built for Investors Ready to Take Action

Earlier this week, we published the latest quarterly results for our MP Wealth-Builder Model Portfolio (CDN).

What began as a public experiment to build a dividend growth portfolio from scratch is working according to plan. After deploying all of our initial capital over four years, both income growth and capital appreciation are tracking closely to projections. Since inception, the portfolio has delivered a 15.35% annualized return while building a growing stream of reliable, tax-efficient dividend income.

That is the point.

We are not trying to beat the market over six months. We are building an income-producing asset designed to fund financial freedom.

In the Portfolio Letter for paid subscribers, I share several lessons from building this portfolio in real time. This week, I want to focus on three, especially for newer subscribers, considering building their own portfolio alongside us using the All-Canadian DGI Portfolio.

A quick reminder: this is not investment advice. I do not tell you what to do with your money. I simply show you what I am doing with mine, explain the process, and let you decide if it fits your goals.

Lesson #1: Being Invested Matters

The old saying is true: Time in the market beats timing the market.

Capital sitting on the sidelines does not compound. Our process ignores headlines, recession fears, elections, and media noise. We buy quality businesses at sensible valuations and let time do the heavy lifting.

One of the clearest lessons from this portfolio is simple: investors waiting for certainty usually pay for it.

Lesson #6: Position Sizing Matters

Stock selection matters. Position sizing matters just as much.

Not every company deserves the same allocation. Our highest-quality, highest-conviction holdings earn larger positions. More cyclical or less predictable businesses earn smaller ones.

This is risk management through process, not prediction.

Mistakes are inevitable. The goal is not perfection. The goal is making sure mistakes sting without sinking the ship.

Lesson #7: Delayed Deployment Has a Cost

Cash feels safe, but too much caution can be expensive.

Dividend growth investors benefit from compounding: dividends get reinvested, buy more shares, and generate even more income. But that flywheel only works when capital is invested.

We learned this firsthand. Our cautious deployment slowed progress early, though a strong market gave us time to catch up.

That may not always happen.

The lesson? Start sooner. Stay disciplined. Let compounding work.

What This Means for New Subscribers

If you are new to dividend growth investing and want a practical starting point, the All-Canadian DGI Portfolio was built for exactly that purpose.

Here is the framework:

Step 1: Decide Your Starting Capital

Start with an amount that matches your risk tolerance and your financial reality.

This is not money needed next month.

This is long-term ownership capital.

Step 2: Follow the Position Sizing Framework

Not every stock in the portfolio is equally attractive at every moment.

That is why the highlighted Investment column in the spreadsheet below matters.

It reflects our valuation framework at the time of publication and helps guide how aggressively capital should be deployed.

Quality alone is not enough.

Price matters.

Step 3: Execute the Plan

Analysis without action builds nothing.

In most cases, new subscribers should be able to deploy roughly 50% of their capital immediately using the current portfolio framework.

The remainder can be deployed over time as opportunities emerge through our DGI Alerts.

Those alerts show exactly what we are buying, selling, and how current position sizing compares to the live model portfolio.

No guesswork.

Just process.

Because building wealth is not about finding the perfect stock.

It is about consistently applying a sound process over time.

The All-Canadian DGI Portfolio

The portfolio is intentionally sorted by quality because not all businesses deserve the same amount of your capital. Our highest-quality companies earn the largest position sizes, while lower-conviction or more cyclical names receive smaller allocations. That is disciplined portfolio construction, not guesswork.

At the portfolio level, the average current dividend yield remains roughly a full percentage point below the average historical high, suggesting the portfolio as a whole is not screaming undervalued today. That is why we are only deploying 50% of our available capital at this time.

The Investment column is where our risk management framework comes to life. Initial position sizes are adjusted based on valuation, specifically how current dividend yields compare to each company’s historical yield range. Higher yields generally signal lower prices and potentially better value. Lower yields typically suggest richer valuations. This is Dividend Yield Theory in action, and it is one of the simplest ways we bring discipline to both stock selection and capital deployment.

Finally, the Returns columns provide a historical perspective. They show each company’s 10-year annualized returns for price appreciation, dividend growth, and total return, based on an equal-weighted approach. This helps you understand not just what you are buying today, but the long-term wealth-building characteristics these businesses have historically delivered.

Takeaway

For newer investors, the lesson is simple: you do not need a perfect entry point or perfect market conditions to get started. You need a sensible plan and the discipline to execute it. Our All-Canadian DGI Portfolio exists to remove the guesswork and provide a practical framework for investors who want to start building a rising stream of tax-efficient income alongside us.

Looking for a helping hand in the market? Members of Magic Pants Dividend Growth Investing get exclusive ideas and guidance to navigate any climate.

The Magic Pants model portfolios (Canadian and American) are real-money, dividend-growth portfolios funded with actual capital and executed in live accounts. Every position shown is owned, sized, and tracked in real time using our disciplined DGI process.

Become a PAID subscriber, and I’ll show you exactly how I do it. In addition, gain full access to this post and exclusive, subscriber-only content. We do the work; you stay in control!

Subscribe now

DGI Scorecard

The Magic Pants 2026 list (The List) includes 26 Canadian dividend growth stocks, and our new American watchlist (The List-USA) contains 28 companies. Here are the criteria to be considered a candidate on our watchlists:

1. Dividend growth streak: 10 years or more.

2. Market cap: Minimum one billion dollars.

3. Diversification: Limit of five companies per sector, preferably two per industry.

4. Cyclicality: Exclude REITs and pure-play energy companies due to high cyclicality.

Based on these criteria, companies are added or removed from ‘The List’ annually on January 1. Prices and dividends are updated weekly.

‘The List’ is not a portfolio but a coaching tool that helps us think through ideas and manage risk in our model portfolio. We own some, but not all, of the companies on ‘The List’. In other words, we might want to buy these companies when the valuation looks attractive.

Our newsletter provides readers with a comprehensive insight into the implementation and advantages of our dividend growth investing strategy. This evidence-based, unbiased approach empowers DIY investors to outperform both actively managed dividend funds and passively managed indexes and dividend ETFs over longer-term horizons.

Note: In the last week of every month, I will show the updated watchlist for our American dividend growers, The List-USA. It will be shown after the Canadian watchlist below.

Performance of 'The List'

The dividend growth of The List stayed the same last week, with an average YTD increase of 6.4% (income).

The price of The List was up last week and now stands at +4.1% YTD (capital).

Top Performers Last Week:

• goeasy Ltd. (GSY-T), up +16.54%.

• Magna (MGA-N), up +6.92%.

• Enbridge Inc. (ENB-T), up +5.33%.

Worst Performer Last Week:

• Waste Connections (WCN-N), down -0.57%.

From breaking news to quarterly earnings reports, we break down the week’s biggest headlines to help you make sense of the market.

Read more

“I measure our progress primarily on the basis of the income we are collecting and the growth of that income through dividend increases.”

- Josh Peters

THE SCOREBOARD

Four years ago, we launched the Magic Pants Wealth-Builder Model Portfolio (CDN) with a simple objective:

Build a disciplined portfolio of high-quality dividend growth companies, manage it in real time, and show subscribers exactly how the process works.

No theory.

No backtests.

No hypothetical returns.

Real money. Real decisions. Full transparency.

Here is where that process stands today:

✅ Portfolio Value: $190,322
✅ Annualized Dividend Income: $4,785
✅ Unrealized Capital Gains: $35,994
✅ Year-to-Date Total Return (Including Dividends): 7.99%
✅ Annualized Total Return Since Inception: 15.35%
✅ Companies Paying Us Dividends: 24
✅ Canadian Economic Sectors Represented: 8

That is what disciplined dividend growth investing looks like when process meets patience.

Portfolio Growth Since Inception

EXECUTIVE SUMMARY

This quarter:

✅ $1,211.66 in dividend income collected
✅ Annualized income rose to $4,785
✅ 11 dividend increases announced
✅ 1 dividend suspension (goeasy)
✅ Portfolio remains aligned with plan

WHY THIS PORTFOLIO EXISTS

The Magic Pants Wealth-Builder Model Portfolio (CDN) is not just a portfolio.

It is a coaching tool.

A real-money demonstration of how disciplined dividend growth investing works over a full investing cycle.

Every purchase is real.

Every dividend is real.

Every gain is real.

Every mistake is real.

Subscribers are not watching a hypothetical model.

They are watching an investment process unfold in public.

That matters.

Because investing is easy to explain in hindsight.

It is much harder to execute in real time.

THE MAGIC PANTS PHILOSOPHY

We do not trade tickers.

We build ownership in productive businesses.

Businesses that:

• generate strong cash flow

• earn attractive returns on capital

• reward shareholders with rising dividends

• are purchased only when sensibly priced

Then we let time do the heavy lifting.

That is it.

No forecasting recessions.

No chasing headlines.

No pretending we can predict market sentiment.

Just disciplined ownership.

THE FORMULA THAT DRIVES LONG-TERM RETURNS

Our investing framework remains simple:

Future Market Returns = Dividend Yield + Dividend Growth ± Change in P/E Ratio

This formula matters because it separates what is reasonably predictable from what is not.

We cannot control short-term valuation swings.

We cannot control investor sentiment.

But we can identify:

• sensible starting yields

• quality businesses

• strong earnings growth

• rising dividends

• reasonable valuations

That makes long-term investing far more predictable than most investors realize.

PORTFOLIO PERFORMANCE

Results matter.

But context matters more.

We have been investing through a strong bull market.

That helps.

Still, process deserves credit.

Since inception, this portfolio has delivered an annualized total return of 15.35% while growing its annualized dividend income to $4,785.

That combination matters.

Because our goal is not simply portfolio appreciation.

Our goal is financial independence through a growing income stream.

Capital gains are helpful.

Growing income is transformational.

Portfolio vs Benchmarks

You’re currently reading the public section of this quarterly portfolio letter.

Public readers receive the high-level portfolio story.

Paid subscribers receive the full playbook:

• every trade

• position sizing decisions

• valuation commentary

• dividend income details

• portfolio construction insights

• buy/sell rationale

• full coaching analysis

If you are serious about building a rising stream of tax-efficient income, the premium experience is where the real work happens.

Read more