Four Stocks. Four Years. Four Doubles.
MP Market Review - June 30, 2026
Summary
This is not a stock-picking newsletter!
It’s a behind-the-scenes look at how a dividend growth portfolio is built, maintained, and improved over time.
Welcome to this week’s MP Market Review.
Before we begin, a quick explanation of the name.
Many years ago, when I first discovered dividend growth investing, I came across a quote that stopped me in my tracks:
“You have a pair of pants. In the left pocket, you have $100. You take $1 out of the left pocket and put it in the right pocket. You now have $101. There is no diminution of dollars in your left pocket. That is one magic pair of pants.”
That is dividend growth investing in its simplest form.
When a quality company pays a dividend, cash moves from the company’s pocket to yours, yet your ownership stake remains intact. As earnings grow, dividends tend to grow. As dividends grow, share prices often follow. Reinvest those dividends into additional shares, and the cycle accelerates: more shares generate more dividends, which buy even more shares.
That’s the magic.
It’s why we call this newsletter Magic Pants Dividend Growth Investing.
Every week, we track the companies on The List, our curated watchlist of Canadian dividend growth businesses selected for their ability to produce rising income over time. While we also publish a U.S. edition each month, Canada remains our primary hunting ground.
Our objective is straightforward:
Grow dividend income by 7-10%+ annually while achieving long-term capital appreciation that matches or exceeds the TSX Composite in Canada and the S&P 500 in the United States.
What follows is not theory.
It is the real-world application of a dividend growth strategy using real money, real positions, and real results.
Markets create an endless stream of noise. We ignore most of it.
Instead, we focus on a handful of metrics that tell us whether our process is working. No predictions. No forecasts. No crystal ball.
Just results.
The magic is in the dividend. Dividends lead. Prices follow.
This Week’s Scorecard
MP Wealth-Builder Model Portfolio (Canada)
Annualized Total Return: +17.34% since inception
Total Return (includes dividends): +15.34 % year-to-date
Current Yield: 3.2%
The List (Canada)
Dividend Income Growth: +6.6% year-to-date
Capital Appreciation: +7.3% year-to-date
Dividend Announcements Last Week: None
Earnings Reports Last Week: One
Earnings Reports This Week: None
DGI Clipboard
“It was quite a while, though, before I realized dividend growth investing had the double double. Our income goes up and our capital rises too.
- Tom Connolly
Four Stocks. Four Years. Four Doubles.
When most people discover dividend growth investing, they focus on one thing: the growing income stream. That makes sense. Watching your dividend income rise year after year, regardless of what the stock market is doing, is both motivating and reassuring.
But something interesting often happens along the way.
The income gets all the attention, while the capital appreciation quietly steals the show.
One of the core principles behind Magic Pants is simple: the magic is in the dividend. As the dividend grows, so does the price. Companies that consistently increase their dividends are usually growing earnings, generating more cash, and creating greater value for shareholders. Over long periods, stock prices tend to follow that business performance.
When we launched our Canadian Model Portfolio just over four years ago, our primary objective wasn’t to double our money. Our goal was to build a dependable, inflation-fighting stream of dividend income that could one day fund retirement.
The capital gains have been a welcome by-product.
Today, four holdings in our portfolio (TD-T, RY-T, TRP-T and TIH-T) have already generated total returns exceeding 100%. Several others are well on their way.
What’s remarkable is that none of these companies were speculative technology stocks or turnaround stories. They were established, high-quality businesses purchased at sensible valuations and then given the time to do what great companies do: compound.
This illustrates one of the biggest misconceptions about dividend investing. Critics often assume that receiving dividends comes at the expense of capital appreciation. In reality, the opposite is frequently true. Businesses capable of raising their dividend year after year are often among the market’s strongest wealth creators.
Investors who focus only on yield miss the bigger picture. The real objective is to own companies that can grow both their earnings and their dividends for decades. The rising income provides confidence during market corrections, while the growing earnings eventually pull the share price higher.
That is why patience remains one of the most valuable investing skills.
Our original thesis on companies like Canadian National Railway and Alimentation Couche-Tard took time to unfold. There were long periods when it appeared little was happening. Yet beneath the surface, the businesses continued to grow, dividends continued to increase, and eventually the market recognized their value.
Takeaway
Dividend growth investing isn’t simply about collecting quarterly cheques.
It is about partnering with exceptional businesses that reward you twice. First, through a steadily growing income stream. Second, through capital appreciation that often exceeds expectations. If you remain patient and allow compounding to work, you may find that your biggest surprise isn’t how much your dividends grow. It may be how much your portfolio grows along with them.
Looking for a helping hand in the market? Members of Magic Pants Dividend Growth Investing get exclusive ideas and guidance to navigate any climate.
The Magic Pants model portfolios (Canadian and American) are real-money, dividend-growth portfolios funded with actual capital and executed in live accounts. Every position shown is owned, sized, and tracked in real time using our disciplined DGI process.
Become a PAID subscriber, and I’ll show you exactly how I do it. In addition, gain full access to this post and exclusive, subscriber-only content. We do the work; you stay in control!
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:
Dividend growth streak: 10 years or more.
Market cap: Minimum one billion dollars.
Diversification: Limit of five companies per sector, preferably two per industry.
Cyclicality: Exclude REITs and pure-play energy companies due to high cyclicality.
Based on these criteria, companies are added or removed from ‘The List’ annually on January 1. Prices and dividends are updated weekly.
‘The List’ is not a portfolio but a coaching tool that helps us think about ideas and risk manage our model portfolio. We own some but not all the companies on ‘The List’. In other words, we might want to buy these companies when valuation looks attractive.
Our newsletter provides readers with a comprehensive insight into the implementation and advantages of our dividend growth investing strategy. This evidence-based, unbiased approach empowers DIY investors to outperform both actively managed dividend funds and passively managed indexes and dividend ETFs over longer-term horizons.
Note: In the last week of every month, I will show the updated watchlist for our American dividend growers, The List-USA. It will be shown after the Canadian watchlist below.
Performance of 'The List'
The dividend growth for The List remained unchanged last week, with an average YTD increase of 6.6% (income).
The price of The List was up last week and now stands at +7.3% YTD (capital).
Top Performers Last Week:
Alimentation Couche-Tard Inc. (ATD-T), up +13.43%.
Waste Connections (WCN-N), up +9.05%.
Franco Nevada (FNV-N), up +7.06%.
Worst Performer Last Week:
Canadian Natural Resources (CNQ-T), down -4.5%.
From breaking news to quarterly earnings reports, we break down the week’s biggest headlines to help you make sense of the market.
