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

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

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: +1.0% year-to-date

• Dividend announcements last week: None

• Earnings reports last week: Six

• 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: Your Monthly Dividend Growth Shopping List Has Arrived

This month’s Timely Ten reinforces a familiar lesson: earnings-driven volatility continues to create selective opportunities in high-quality dividend growers, but not every cheap stock is a buy.

In Canada, Stella-Jones stands out as the most interesting new opportunity. The market appears to have overreacted to a headline EPS decline, which was distorted by tough prior-year comparisons rather than by fundamental business deterioration. That kind of short-term mispricing is exactly what the Timely Ten is designed to surface. At the same time, Canadian Tire reminds us that low valuation alone is not enough. A high yield and inexpensive multiple means little without an identifiable catalyst or stronger operating momentum.

Quality remains a defining theme. Waste Connections and Metro continue to stand out as two of the highest-quality businesses on the Canadian list, and the fact that both are cheaper than they were a month ago only improves the setup.

In the U.S., Zoetis is a similar story to Stella-Jones, though with a slightly different risk profile. The market punished weakening fundamentals beneath an acceptable headline quarter, creating a stock worth watching, but not necessarily rushing into.

Meanwhile, UnitedHealth serves as a case study in patience. A stock that looked deeply out of favour a month ago is now up 30%, validating the discipline of buying quality when sentiment is broken.

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 Timely Ten is doing exactly what it should. It is identifying dislocations created by short-term fear, separating true opportunity from value traps, and reinforcing that quality plus sensible valuation remains the winning formula

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

The price of The List was down last week and now stands at +1.0% YTD (capital).

Top Performers Last Week:

• Canadian Natural Resources (CNQ-T), up +8.52%.

• TC Energy Corp. (TRP-T), up +6.08%.

• Enbridge Inc. (ENB-T), up +3.82%.

Worst Performer Last Week:

• Stantec Inc. (STN-T), down -11.03%.

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

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 Canadian 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 8% 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 (CDN) is actively managed, monitored, and reported on, so investors can see how disciplined dividend growth investing can build long-term wealth.

Read more

I wanted to let you know that I just SOLD a quality dividend grower in our Canadian model portfolio that paused its dividend growth last year, and it does not look like a resumption is in the cards anytime soon. It is more likely that a dividend cut will be necessary to help in its turnaround.

As a long-term investor, I look for quality companies that grow earnings and dividends, and try to acquire them at a good price. When this approach is interrupted, I sit back and reassess.

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: +6.4% year-to-date

• Capital value: +1.3% year-to-date

• Dividend announcements last week: None

• Earnings reports last week: Six

• Earnings reports this week: Eight

DGI Clipboard

“My life has been a product of compound interest. Nothing more. Nothing less. And nothing brilliant.”

- Warren Buffett

The Rule of 72: A Dividend Growth Perspective

Portfolio prices fluctuate constantly up and down. Income from quality dividend growers tends to move in one direction: upward.

If you are young and new to investing, at some point a wealth advisor will sit you down and explain the Rule of 72. They will pull up long-term charts showing the historical returns of the stock market over the last 10, 20, or 30 years and explain how your money could double roughly every decade at a 7% annual return (historical long term stock market return).

The projections look impressive.

Add regular contributions and the magic of compounding, and suddenly retirement in your late fifties or early sixties feels almost guaranteed.

You hand over your hard-earned savings, believing that historical returns will continue and that, one day, your portfolio will grow large enough to fund retirement by slowly selling off pieces of it.

That is the traditional narrative.

The problem with this approach is that most investors are taught to think about the Rule of 72 in terms of portfolio value and stock prices which can be unpredictable year by year. This causes growth only investors to panic over a full investing cycle and often interrupt the compounding process. Management fees eat away at capital and only a few make it to retirement with their original portfolio goals intact.

Dividend growth investors see the equation differently.

The real power is not in the account balance.

It is in the income stream.

Instead of focusing on what the portfolio is worth on any given day, we focus on how much cash flow it produces and, more importantly, how quickly that income grows over time.

A portfolio generating rising dividend income year after year changes the conversation entirely. You are no longer focused on the market in the short term or relying exclusively on selling assets to fund retirement one day. It is much easier to stay the course and let compounding do the heavy lifting.

That shift in mindset is what separates ownership thinking from market thinking.

What Is the Rule of 72?

The Rule of 72 is a shortcut investors use to estimate how long it takes money to double.

Why the Rule of 72 Matters More for Dividend Growth Investors

Most traditional investors think in terms of portfolio value.

Dividend growth investors think in terms of income growth.

That distinction matters because income is what ultimately funds retirement, financial freedom, and long-term independence.

Portfolio prices fluctuate constantly up and down.
Income from quality dividend growers tends to move in one direction: upward.

This is why the Rule of 72 fits dividend growth investing so perfectly.

If your portfolio income compounds at 7% annually, your income doubles approximately every 10 years.

A portfolio generating $10,000 in income today becomes:

• $20,000 in about 10 years

• $40,000 in about 20 years

• $80,000 in about 30 years

Without adding extraordinary amounts of new capital.

Just compounding.
Just dividend growth.
Just patience.

This is the real power of dividend growth investing.

The Part Most Investors Miss

Here is the critical insight:

Dividend growth and price appreciation are not separate forces.

They come from the same source: growing earnings.

Businesses that consistently grow earnings can:

• Raise dividends

• Reinvest capital

• Expand cash flow

• Increase intrinsic value

Over long periods, stock prices tend to follow dividend growth because both reflect the growth of the underlying business.

This is why we constantly repeat the same principle at Magic Pants Dividend Growth Investing:

Income is built first.
Capital appreciation follows.

The Rule of 72 helps investors visualize that process.

A company growing dividends at 7% annually is quietly doubling the income it pays shareholders every ten years.

And over time, markets usually recognize that growth.

Don’t be surprised if your capital grows at a similar or even faster rate. After all, we only buy quality dividend growers when they are sensibly priced.

Takeaway

The Rule of 72 is not complicated.

But it explains one of the most important truths in dividend growth investing:

Small, consistent growth rates become life-changing over long periods.

That is why we focus so heavily on:

• Earnings growth

• Dividend growth

• Quality businesses

• Long holding periods

• Patience

Markets will always fluctuate.
Headlines will always create noise.

But when your income stream keeps doubling every decade, eventually the math overwhelms the volatility.

That is the real secret behind dividend growth investing.

Not prediction.

Compounding.

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

The price of The List was down last week and now stands at +1.3% YTD (capital).

Top Performers Last Week:

• Magna (MGA-N), up +3.75%.

• Manulife Financial (MFC-T), up +2.86%.

• Franco Nevada (FNV-N), up +2.50%.

Worst Performer Last Week:

• Stella-Jones Inc. (SJ-T), down -13.06%.

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: +6.4% year-to-date

• Capital value: +2.6% year-to-date

• Dividend announcements last week: None

• Earnings reports last week: Six

• Earnings reports this week: Eight

DGI Clipboard

“The stock market is random from year-to-year, yet highly predictable over a full investing cycle.”

Predictable Returns in Unpredictable Markets

Predictable Long-Term Returns: The Quiet Advantage of Dividend Growth Investing

We made it!

April 30, 2026, marked the four-year milestone of our public MP Wealth-Builder Model Portfolio (CDN) Business Plan. The mandate was straightforward: build a real money, disciplined, process-driven portfolio of high-quality dividend growth companies and let compounding do the work.

We started with $100,000, deployed methodically over the first four years, then layered in an additional $1,000 per month beginning in Year 2 to accelerate the income engine.

What stands out is not just the performance. It’s how predictable the outcome has been.

The annual dividends collected and the end-of-year portfolio value we laid out at the beginning of this journey came very close to reality. Not because we outguessed the market. Not because we chased trends.

Because we followed a repeatable process grounded in dividend growth.

The Part Most Investors Miss

We achieved this without owning a single high-flying tech or AI name.

No hype. No speculation.

Just a portfolio of Canadian businesses across:

• Banks

• Pipelines

• Railroads

• Utilities

• Grocers

• Select resource companies

The kind of companies most investors overlook because they are “boring.”

That’s exactly the point.

Boring businesses with predictable cash flows tend to produce predictable dividends. And predictable dividends, over time, lead to predictable returns.

Meanwhile, the Market Did What It Always Does

Short term? Chaos.

From 2022 through 2026, the Toronto Stock Exchange delivered a steady stream of volatility:

2022: Rate Shock Selloff

• TSX dropped roughly 12–15% in weeks

• Central banks tightened aggressively

• Banks and cyclicals sold off hard

2023: Banking Panic

• A 5–7% drop tied to the collapse of Silicon Valley Bank

• Canadian banks were dragged down despite fundamentally different risk profiles

Late 2023: Bond Yield Surge

• TSX declined another 8–10%

• “Higher for longer” became the dominant narrative

• Utilities, pipelines, and REITs were hit

2024: Inflation Repricing

• Markets pulled back 5–8%

• Rate cuts were delayed again

• Defensive names held up better than most

2025–2026: Oil Volatility

• Short-term spikes and pullbacks driven by geopolitical tension

Here’s the Reality Most Investors Refuse to Accept

None of this mattered.

Not to long-term outcomes.

This is where most investors go off track. They treat volatility as risk. It isn’t.

Volatility is noise.

The real driver of long-term returns is far simpler:

Dividend Yield + Dividend Growth +/- Change in P/E Ratio

That’s it.

Strip away the headlines, and you’re left with a business generating cash, growing that cash, and returning a portion of it to you year after year.

That’s not speculation. That’s a process.

Income First. Price Follows.

Over the past four years, our portfolio didn’t succeed because prices went up.

Prices followed income.

As dividends grew, the underlying value of the businesses increased. Over time, the market recognized that value.

That’s the sequence:

1. Businesses grow earnings

2. Dividends increase

3. Income rises

4. Prices eventually catch up

You don’t need to predict sentiment. You need to own businesses that grow.

Takeaway

The lesson is straightforward.

Stop reacting to narratives.

Use them.

Every major drawdown listed above was not a warning sign. It was an entry point.

Dividend growth investing works because it aligns with how businesses actually operate. Companies grow earnings. They raise dividends. Over time, that compounds into both rising income and capital.

It’s not flashy. It’s not exciting.

But it is one of the most predictable long-term investment strategies available.

And if you stay disciplined, you don’t need to be right about the market.

You just need to be right about the businesses you own.

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, of 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 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 +2.6% YTD (capital).

Top Performers Last Week:

• TC Energy Corp. (TRP-T), up +6.89%.

• Alimentation Couche-Tard Inc. (ATD-T), up +5.67%.

• Canadian Natural Resources (CNQ-T), up +5.26%.

Worst Performer Last Week:

• Franco Nevada (FNV-N), down -6.56%.

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 to another quality dividend growth company a few minutes ago. It is a dividend achiever with a 22-year track record of annual dividend increases. Over the past decade, it has grown dividends at an annualized rate of 8.6% and recently announced a 10.5% dividend increase. 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.

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: +6.4% year-to-date

• Capital value: +1.7% year-to-date

• Dividend announcements last week: None

• Earnings reports last week: Two

• Earnings reports this week: Six

DGI Clipboard

“This is one of the keys to successful investing: focus on the companies, not on the stocks.”

– Peter Lynch

Think Like an Owner

Ownership Thinking

For us, investing is about owning businesses, not trading stocks.

We approach every purchase with an ownership mindset, as if we were acquiring a meaningful stake in the company. This perspective keeps us steady during market volatility and strengthens our long-term commitment.

It also forces a deeper level of understanding. We are aligning with high-quality businesses, led by capable management teams and supported by thousands of employees doing the real work. Their success is what ultimately drives our income and long-term returns.

Our portfolio is not a list of tickers.

We treat it like an asset management business, with dividend growth companies as the core assets and us as the CEO. That framing matters. It shifts the focus toward building something durable that produces both rising income and long-term capital appreciation.

This is what reinforces our “rarely sell” philosophy.

Through all market conditions, we follow the same playbook.

Add more when prices are attractive.
Let the businesses compound when conditions improve.

Over time, the shift happens.

You move from working for your money to managing assets that work for you.

You already know this.

Most investors just don’t act like it.

When you buy a stock, you are not trading a ticker. You are buying a slice of a real business. That has consequences.

If you buy shares of Royal Bank of Canada, you are making a valuation decision on the entire enterprise. You are saying, at today’s price, this business is worth owning based on what it can produce going forward.

It does not matter that you are only buying a few shares.

The mindset should be the same.

This is where most investors lose the plot.

They focus on price.
They watch screens.
They react to headlines.

Owners do something different.

They focus on the business.

Think about it this way.

Imagine you own a small, family-run HVAC company.

Your grandfather started it. Your parents expanded it. Now you are responsible for running it and eventually passing it on.

The business generates steady cash flow. Customers depend on it. Growth is not explosive, but it is consistent.

Now ask yourself what actually matters.

Do you care what someone offers you for the business today?

No.

What matters is simple.

How much cash does it produce?
Will that cash grow over time?

That’s it.

Income and growth.

Everything else is noise.

This is the exact lens we should use for our dividend growth portfolios.

When we buy a quality company, we are stepping into ownership of a cash-generating asset. The job is not to predict price moves. The job is to assess whether the business can grow earnings and dividends over time.

If it can, the rest follows.

Dividends rise.
Income compounds.
Price eventually catches up.

Takeaway

This is where dividend growth investing separates itself from speculation.

We are not relying on someone else to pay us more tomorrow.

We are relying on the business to produce more cash next year than it did this year.

That is a far more durable edge.

From trading to owning.
From price to income.
From noise to process.

Get this right, and everything else gets easier.

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

The price of The List was down last week and now stands at +1.7% YTD (capital).

Top Performers Last Week:

• TFI International (TFII-N), up +5.56%.

• Waste Connections (WCN-N), up +4.03%.

• Magna (MGA-N), up +3.93%.

Worst Performer Last Week:

• Franco Nevada (FNV-N), down -7.68%.

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 bought another quality dividend growth company a few minutes ago. 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%. It recently increased its dividend once again by 8.9%. 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.

Read more

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. 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: +1.8% year-to-date

• Dividend announcements last week: None

• Earnings reports last week: None

• Earnings reports this week: One

DGI Clipboard

“I do believe it is possible for a minority of investors to get significantly better results than average. Two conditions are necessary for that. One is that they must follow some sound principles of selection that are related to the value of securities and not to their market price. The other is that their method of operation must be basically different from that of the majority of security buyers. They have to cut themselves off from the general public and put themselves into a different category.”

- Benjamin Graham

Being Lucky vs Being Good

Imagine we sponsor a global contest to find the world’s best coin flippers.

100,000 people enter. Everyone flips a coin at the same time. After each round, anyone who lands tails is eliminated. This continues until only those who flip 10 heads in a row remain.

Simple math tells us what happens next.

The odds of flipping 10 straight heads are 1 in 1,024. So out of 100,000 participants, roughly 98 people will make it to the end.

And what do we call them?

Experts.

They will build audiences. They will write books. They will explain their “process.” They will tell you what they did differently.

But we know the truth.

They got lucky.

This is exactly what happens in the stock market every single day.

A handful of investors buy the right stock at the right time. Prices rise. Narratives form. And suddenly, skill gets confused with luck.

At Magic Pants Dividend Growth Investing, we take a very different approach.

We are not trying to flip coins.

We are not trying to predict which stock will double next year.

We are not chasing price.

We are building something far more reliable. We are building income.

Dividend growth investing removes the guesswork. Instead of hoping someone else will pay us more for a stock tomorrow, we focus on what the business pays us today and how that payment grows over time.

That is the difference between speculation and process.

A rising dividend is not luck. It is the result of earnings growth, disciplined management, and durable business models. When those dividends increase year after year, something powerful happens.

The income becomes predictable.

The portfolio becomes resilient.

And over time, the market does what it always does. It follows the fundamentals.

Dividends lead. Prices follow.

Anyone can look like a genius over 10 coin flips. Very few have the patience to build a growing income stream over 10 years.

That is the real game.

Takeaway

At Magic Pants, we are not interested in being the “best coin flippers” in the room. We are focused on owning high-quality businesses, buying them at sensible prices, and letting the income snowball do the heavy lifting.

Because in the end, wealth is not built on lucky streaks.

It is built on a repeatable process that works whether the coin lands heads or tails.

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, of 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 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 +1.8% YTD (capital).

Top Performers Last Week:

• Thomson Reuters (TRI-Q), up +11.70%.

• TFI International (TFII-N), up +7.49%.

• Manulife Financial (MFC-T), up +5.22%.

Worst Performer Last Week:

• Canadian Natural Resources (CNQ-T), down -8.34%.

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: +6.4% year-to-date

• Capital value: +1.7% 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: High Quality on Sale… If You’re Paying Attention

Our Timely Ten lists remain the fastest way to spot potential value opportunities, which explains why they continue to be the most-read articles every month.

Timely Ten – Canada

Very little changed in this month’s Timely Ten (CDN).

Just one name moved on, and one moved off. When that happens, new ideas don’t jump off the page. You have to look a little harder. That is where the opportunity usually is.

One name that quietly stood out this month is Waste Connections.

The stock moved from number six to number four on the list, driven by recent price weakness. That matters.

Outside of Canadian National Railway, Waste Connections has one of the highest quality rankings in the Timely Ten. That alone should get your attention.

This is the playbook.

We are not chasing headlines. We are not guessing direction. We are simply waiting for high-quality businesses to come back to sensible prices and then acting accordingly.

From a portfolio standpoint, this is where things get interesting.

We already have close to a full position in Canadian National. Waste Connections, on the other hand, sits at roughly 3.5%. Not quite at its 5% maximum. That leaves room.

And when a business of this quality starts moving up the list due to price weakness, we pay attention.

That is how the income snowball gets built.

Note: goeasy Ltd.’s dividend has been suspended.

Timely Ten – United States

Very little changed in this month’s Timely Ten (USA).

No names moved on or off the list. But that does not mean nothing happened.

Several high-quality businesses quietly got cheaper. Comcast, Automatic Data Processing, Intuit, and Essential Utilities all moved in the right direction from a valuation standpoint.

That is where you lean in.

One other name that continues to stand out is Visa.

Visa carries one of the highest quality rankings on our U.S. watchlist and has been a standout dividend growth performer for nearly two decades. This is exactly the type of business we want compounding in the background for years.

From a portfolio standpoint, we are already at a full position size, so adding here is unlikely.

But for new capital or new investors, this is one to study closely.

High-quality businesses rarely go on sale.

When they do, you pay attention.

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 a current price (Price) below fair value (Low Price). Put simply, these stocks have a current dividend yield higher than their historically high yield. According to dividend yield theory, these companies are sensibly priced and have the highest probability of a price increase in the short term. These are our Timely Ten.

Takeaway

History shows the Timely Ten is fertile ground for finding attractive entry points into high-quality dividend growers. Whether or not you act on the names, the list serves its purpose: to surface opportunities when quality meets value.

When making investment decisions, always prioritize a company’s ‘quality’ over a ‘sensible price’. For more details on our quality indicators, download our Free Guide to Finding Quality Dividend Growth Stocks here.

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 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 +1.7% YTD (capital).

Top Performers Last Week:

• TFI International (TFII-N), up +9.96%.

• Toromont Industries (TIH-T), up +7.78%.

• TD Bank (TD-T), up +5.11%.

Worst Performer Last Week:

• goeasy Ltd. (GSY-T), down -10.04%.

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: +6.4% year-to-date

• Capital value: +0.7% year-to-date

• Dividend announcements last week: One

• Earnings reports last week: One

• Earnings reports this week: None

DGI Clipboard

“A true investor buys for the dividend return and understands that yield growth will drive total return.”

- Tom Connolly

“Our increasing income comes from our companies directly, not the market.”

-Tom Connolly

“Dividend growth is the hidden magic in plain sight. We hold because after ten years, our yield is at least 5%, on average 7% and often about 10%.”

- Tom Connolly

“Why would you hold fixed income on purpose when you can have a growing income in retirement? Perhaps because you believed your wealth manager’s guff.”

-Tom Connolly

Dividend Return: The Investment Return You Can Actually Control

My mentor, Tom Connolly, didn’t hold back on how he felt about dividend return (growth yield). I included some of his best quotes above.

It is hard to stay focused and patient as a DIY investor. Markets move. Headlines scream. Prices fall. And in those moments, all the talk about temperament, discipline, and process gets tested.

Most investors think they understand these ideas. Very few actually live them.

At Magic Pants, we approach investing differently. We are not chasing price. We are building income. And more specifically, we are building dividend return.

That distinction matters.

Dividend return is the portion of your total return that comes from cash paid to you by the business. It is real. It is measurable. And most importantly, it grows over time when you own the right companies.

Capital return, on the other hand, is unpredictable in the short term. It depends on sentiment, multiples, and narratives. You cannot control it.

But dividend return? That is where you focus.

Here is what that looks like in practice.

In 2011, an equal-weighted basket of high-quality Canadian dividend growers, which we now call the All-Canadian DGI Portfolio, yielded about 2.5%.

Today, that same basket yields 11.4% on original cost (YTD dividend/$11 price).

Let’s translate that into something tangible.

A $1,000,000 investment back then would now be generating $114,000 in annual income today. And that income is not static. It continues to grow year after year.

That is the difference between chasing yield and building it.

Nothing fancy happened. No trading. No forecasting. No guessing.

Just ownership of quality businesses that continued to grow earnings and raise dividends year after year.

That is the quiet superpower of dividend growth investing.

While the market debates interest rates and economic cycles, your income keeps climbing. Slowly at first. Then all at once.

And here is where most investors miss the point.

They anchor to today’s yield instead of focusing on tomorrow’s income.

They look at a 2–3% yield and think it is not enough.

What they fail to see is what that yield becomes after a few years of consistent growth.

This is why we say:

Dividends lead. Prices follow.

As earnings grow, dividends grow. As dividends grow, the market eventually reprices the business higher. The capital return shows up later.

But the income? That shows up every quarter.

So when markets get volatile, remember what you actually own.

You do not own a ticker symbol.

You own a stream of growing cash flow.

Takeaway

Our job is simple.

Buy quality companies.
Pay sensible prices.
Build positions over time.
Reinvest the income.

Then step aside and let the income snowball do the heavy lifting.

That is dividend return.

And over time, it changes everything.

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, of 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 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 +0.7% YTD (capital).

Top Performers Last Week:

• Franco Nevada (FNV-N), up +10.17%.

• Waste Connections (WCN-N), up +6.43%.

• TFI International (TFII-N), up +6.35%.

Worst Performer Last Week:

• Canadian Natural Resources (CNQ-T), down -4.77%.

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: +6.4% year-to-date

• Capital value: -1.6% year-to-date

• Dividend announcements last week: One

• Earnings reports last week: One

• Earnings reports this week: One

DGI Clipboard

“The market falls by 10% once about every two years. Every six years, the market’s going to have a 25% decline. The market goes down sometimes. If you’re not ready for that, you shouldn’t own stocks.”

- Peter Lynch

Everyone Has Buffett’s Playbook. Very Few Have His Results.

When Warren Buffett was asked why so few investors have been able to replicate his success, despite him openly sharing his methods, his answer may surprise you.

Here is what he said:

“The philosophy either takes immediately or it doesn’t at all. The reason gets down to temperament. People want to make money fast, but it doesn’t happen that way. Graham’s philosophy doesn’t promise enough for many people. You don’t know when it will happen, but you just wait for the fat pitches within your circle of competence. It’s not as exciting as guessing whether the stock price will go up the next day. Most investors in internet companies didn’t know the market cap. They were buying because they thought the stock would move, but if you asked them to write, ‘I would buy XYZ company for 6 billion because,’ they wouldn’t get halfway through the sentence. It’s the classic tortoise versus hare, bound to work over time.”

Why most investors fail, and we win

Every investor says they want long-term success.

Very few are willing to behave in a way that produces it.

When Warren Buffett was asked why so few people have been able to replicate his approach, despite his sharing it openly for decades, his answer had nothing to do with intelligence.

It came down to temperament.

That is the part most investors ignore.

And it is exactly why dividend growth investing works so well.

The strategy is simple. The execution is not.

Dividend growth investing is not complicated.

We:

• buy high-quality businesses

• at sensible prices

• that grow their dividends over time

• and hold them

That’s it.

No forecasts.
No predictions.
No guessing.

But here is the catch.

You have to stick with it.

And that is where most investors fail.

Most investors want speed. We want durability.

Buffett said it clearly.

People want to make money fast.

That is why they chase:

• hot sectors

• trending stocks

• short-term price moves

They are not thinking like owners.

They are thinking like traders.

In our strategy, we do the opposite.

We focus on:

• earnings growth

• income (dividend) growth

• long-term value

It is slower.

It is quieter.

But it works.

Because real wealth is built through compounding, not excitement.

The real edge is temperament

Let’s be honest.

This strategy can feel uncomfortable at times.

You will:

• watch prices fall

• hold positions that go nowhere for months

• buy when sentiment is negative

We have lived it.

• buying Toronto-Dominion Bank during weakness

• adding to Canadian National Railway on pullbacks

• building a position in TC Energy when sentiment was poor

• holding Nexterra Energy after a 20% decline right after purchase

None of those decisions felt good in the moment.

But they were correct.

Because they were grounded in process, not emotion.

This is the difference.

Successful investors are not fearless.

They are disciplined.

Waiting is a strategy

Buffett talks about waiting for “fat pitches.”

This is Dividend Yield Theory in action.

We are not swinging every day.

We wait for:

• higher-than-normal historical yields

• price weakness in quality companies

• valuation to return to sensible levels

That is how we use:

• The List

• The Timely Ten

• the three-dot rule

Patience is not passive. It is selective.

Know what you own or don’t own it

Buffett made another critical point.

Most investors cannot explain why they own what they own.

They buy because:

• the price is moving

• someone recommended it

• it “feels” like a good idea

That is speculation.

We stay in areas we understand:

• banks

• railroads

• pipelines

• utilities

• essential service businesses

These are not exciting.

They are predictable.

Predictability is what allows dividends to grow.

And dividend growth is what drives:
earnings → income → price

The tortoise wins

This is not a race to the next trade.

It is a process.

We are building:

• a growing income stream

• that increases every year

• regardless of what the market is doing

While others:

• panic

• chase

• react

We collect.

And reinvest.

And repeat.

That is how the income snowball forms.

Slow at first.

Then unstoppable.

This is why it works

Buffett’s message is simple.

The strategy is available to everyone.

The results are not.

Because most investors:

• lack patience

• chase excitement

• abandon discipline

Dividend growth investing removes those variables.

It replaces them with:

• process

• consistency

• time

And over a full market cycle, that is what wins.

Takeaway

Buffett is not giving you a stock tip.

He is warning you.

Most people will fail at investing for one reason:

They don’t have the temperament to stick with it.

So the real question is not:

“What should I buy?”

It is:

“Can I stay disciplined long enough for this to work?”

Because if you can…

You don’t need to be smarter than the market.

You just need to be more patient than the average investor.

Build income first.
Let capital follow.

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, of 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 of The List was up last week, with an average YTD increase of 6.4% (income).

The price of The List was up last week and now stands at -1.6% YTD (capital).

Top Performers Last Week:

• Stella-Jones Inc. (SJ-T), up +6.21%.

• TFI International (TFII-N), up +5.63%.

• Franco Nevada (FNV-N), up +5.13%.

Worst Performer Last Week:

• Dollarama Inc. (DOL-T), down -7.68%.

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: +6.0% year-to-date

• Capital value: -2.7% year-to-date

• Dividend announcements last week: None

• Earnings reports last week: One

• Earnings reports this week: Two

DGI Clipboard

“A true investor buys for the dividend return. The dividend return is the sum of yield plus growth. If one is not thinking of dividends, they must be speculating/hoping. Hoping that they can profit by selling the stock at a higher price.”

-Steve Hanke

All-Canadian DGI Portfolio: Built to Survive Anything the Market Throws at It

It has been a volatile month in the markets. Prices are down. The S&P 500 and TSX Composite have both dropped more than 6%.

For many investors, that creates pressure.

If your strategy depends on selling shares to fund your life, this is where things get uncomfortable. You are forced to sell into weakness. Losses become real.

Dividend growth investors operate differently.

Our income keeps showing up. More importantly, it keeps growing.

That is the quiet advantage of this strategy.

When prices fall, yields rise.
When yields rise, future income improves.
And nothing has changed with the underlying businesses.

Same companies. Same cash flow. Better prices.

Introducing The All-Canadian DGI Portfolio

We do not build portfolios based on where oil, gold, or interest rates might go next month.

We build portfolios around one thing: growing cash flow.

At all times, we hold quality businesses purchased at sensible prices. The common thread is simple. These companies have paid and increased dividends for decades.

No forecasting. No guessing. No micro-managing.

Just ownership.

On this blog, I have shown every trade in our model portfolios since May 2022. Real money. Real decisions. Full transparency. It has taken us four years to build out our portfolio and invest our initial capital.

If you are new to our strategy, the All-Canadian DGI Portfolio is your starting point.

Start with quality, invest slowly with proper position sizing. Then build over time as opportunities appear.

That is the process.

Here is the portfolio. Fourteen companies across six sectors with decades of dividend growth.

What Should Stand Out

First, the dividend streaks.

On average, these companies have increased their dividends every year for nearly 30 years.

Think about that.

Dot-com crash.
Financial crisis.
Pandemic.
Rate cycles.
Wars.

Through all of it, the dividends kept rising.

That is not luck. That is quality.

Second, the alignment between dividend growth and price growth.

Dividends have grown at 8.7% annually.
Prices have grown at 9.9% annually.
Total return: ~11.7% annually.

This is the formula:

Earnings up → Dividends up → Prices up

Not always in a straight line. But over time, it is highly predictable.

Where We Go Further

Most investors stop there.

We do not.

Those returns assume an equal-weight portfolio. Same money in every stock. No thought to valuation. No thought to quality differences.

We add a second layer: position sizing.

We allocate more capital to higher-quality businesses.
We scale in based on valuation.
We build positions over time, not all at once.

That is where the edge comes from.

Not stock picking.
Not timing the market.
Process.

How to Use This

You can deploy roughly 56% of your initial capital today across the quality names in the All-Canadian DGI Portfolio at sensible weights.

Then you let the process take over.

Follow the DGI alerts as PAID subscribers. Add on weakness. Reinvest dividends and let them compound.

Simple. Repeatable. Proven.

The Real Difference

I left the rat race a long time ago.

I do not rely on selling shares.

I buy businesses that pay me.

That cash shows up every month or quarter. I decide what to do with it.

Reinvest it. Spend it. Hold it.

My choice.

Selling is optional. Not required.

That changes everything.

Takeaway

Most investors watch prices.

We track income.

When cash keeps hitting your account, it becomes much easier to stay the course.

You stop thinking like a trader.
You start thinking like an owner.

That is the shift.

You can ride the market rollercoaster.
Or you can build a machine that pays you regardless.

Pick the one that lets you sleep at night.

For me, it is simple.

Build the income. Let the rest follow.

One dividend at a time.

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, of 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 of The List stayed the same last week, with an average YTD increase of 6.0% (income).

The price of The List went down last week and now stands at -2.7% YTD (capital).

Top Performers Last Week:

• Canadian Natural Resources (CNQ-T), up +1.32%.

• Manulife Financial (MFC-T), up +1.20%.

• goeasy Ltd. (GSY-T), up +0.64%.

Worst Performer Last Week:

• Franco Nevada (FNV-N), down -11.64%.

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: +6.0% year-to-date

• Capital value: +0.9% year-to-date

• Dividend announcements last week: None

• Earnings reports last week: One

• Earnings reports this week: One

DGI Clipboard

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

— Tom Connolly

Timely Ten: Your Monthly Valuation Compass for Dividend Growth Stocks

Our Timely Ten lists remain the fastest way to spot potential value opportunities, which explains why they continue to be the most-read articles every month.

Timely Ten – Canada

Last month was a typical month in terms of movement within our Timely Ten (CDN). Two companies moved off the list, and two new companies moved on. All four changes occurred near the bottom of the ranking, where most of the smaller shifts tend to occur.

For newer investors, it is helpful to remember what the Timely Ten represents. The list ranks companies from The List based on valuation using Dividend Yield Theory. When prices rise, yields fall and companies tend to move down or off the list. When prices decline, yields rise and companies often move up the list. In other words, price strength can move a stock off the list, while price weakness can move a stock onto it.

Last month, Thomson Reuters and Canadian Natural Resources moved out of the Timely Ten due to price strength. Their share prices rose enough to make their valuations less attractive relative to other companies on our watchlist. Coincidentally, or perhaps simply the result of following a disciplined process, we had already either added to or increased our positions in both companies before those price increases occurred.

Meanwhile, Intact Financial and Magna moved onto the Timely Ten as their share prices weakened. Lower prices can sometimes create an opportunity if the underlying business remains strong. Both companies are worth a closer look based on the recent pullback. In our case, we still have room within our position sizing guidelines to add to both if the valuation becomes compelling.

For dividend growth investors, these monthly movements are not signals to trade frequently. Instead, they serve as a valuation compass, highlighting where prices may be creating opportunities to accumulate quality companies at sensible prices.

Over time, consistently acting on these opportunities is what allows the income snowball to grow.

Note: goeasy Ltd.’s dividend has been suspended.

Timely Ten – United States

The ten most undervalued dividend growth stocks on this month’s Timely Ten (USA) remain unchanged. That does not happen often and usually tells us something important. Several of these quality dividend growers appear to be stabilizing after recent price declines and may be forming a bottom.

Predicting which stock will move higher first is never easy. Even the best investors cannot consistently pick the exact turning point. What we can do is increase our probability of success by remaining disciplined and purchasing quality dividend growth companies when they are sensibly priced relative to their historical fundamentals.

For newer investors, two high quality companies that continue to look reasonably valued this month are Automatic Data Processing and Visa. Both operate exceptional businesses with durable competitive advantages and long histories of dividend growth. If I did not already hold a full position size in these companies, I would be taking a closer look at them at current prices.

There were also two notable movements just below the line this month. Home Depot and NextEra Energy moved closer to inclusion on the Timely Ten due to recent price weakness.

Home Depot is approaching what we consider a sensible price based on its historical valuation range. However, the current environment for the business is somewhat challenging. Consumer uncertainty and higher building material costs are creating headwinds for the home improvement sector. Many of these pressures can be traced back to tariff-related effects in the broader economy. Because of this macro backdrop, we will remain patient before adding to our position.

NextEra Energy provides a different example of how valuation evolves over time. The stock has risen approximately 60 percent since we initiated our position in late 2023, when it appeared significantly undervalued based on historical fundamentals. Since then, the company has continued to deliver double digit dividend growth, which steadily raises the price level that we consider a sensible entry point. While valuation remains reasonable today, we currently see more compelling opportunities elsewhere on the Timely Ten, so patience remains the right approach here as well.

For new investors, the key lesson is this: a watchlist is not a trading list. It is a tool that helps you identify where valuation and opportunity may be developing. Over time, patiently allocating capital to quality companies when they become undervalued is what allows the dividend income snowball to grow.

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 a current price (Price) below fair value (Low Price). Put simply, these stocks have a current dividend yield higher than their historically high yield. According to dividend yield theory, these companies are sensibly priced and have the highest probability of a price increase in the short term. These are our Timely Ten.

Takeaway

History shows the Timely Ten is fertile ground for finding attractive entry points into high-quality dividend growers. Whether or not you act on the names, the list serves its purpose: to surface opportunities when quality meets value.

When making investment decisions, always prioritize a company’s ‘quality’ over a ‘sensible price’. For more details on our quality indicators, download our Free Guide to Finding Quality Dividend Growth Stocks here.

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.

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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 of The List stayed the same last week, with an average YTD increase of 6.0% (income).

The price of The List went down last week and now stands at +0.9% YTD (capital).

Top Performers Last Week:

• Canadian Natural Resources (CNQ-T), up +5.64%.

• Emera (EMA-T), up +3.29%.

• Intact Financial (IFC-T), up +3.02%.

Worst Performer Last Week:

• goeasy Ltd. (GSY-T), down -67.41%.

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

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“The essence of investment management is the management of risks, not the management of returns.”

- Benjamin Graham

Intro

Thank you for all the emails and messages this week regarding goeasy Ltd. (GSY-T). Many of you asked what happened and whether there was a way to see it coming within our process. Others may simply be wondering how to handle a sudden decline in a portfolio holding.

I thought it would be helpful to briefly address the situation and, more importantly, explain how disciplined portfolio construction protects us when unexpected events occur.

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