Why choose between income today and growth tomorrow when you can have both?
Welcome to this week’s MP Market Review, where we put our dividend growth investing (DGI) process into practice with real money, real positions, and real results.
When I first discovered dividend growth investing, my objective was straightforward: build a portfolio that would generate a reliable and growing stream of income throughout retirement.
What I discovered was something even more compelling.
Dividend growth investing wasn’t just an income strategy. It became the most successful total-return investment approach I had ever followed.
IN THIS ISSUE: DGI Clipboard • DGI Scorecard • DGI News • DGI Updates • Earnings Releases
DGI Clipboard
“A true investor buys for the dividend return and understands that yield growth will drive total return.”
- Tom Connolly
Income and growth aren’t enemies. They’re teammates.
Why choose between income today and growth tomorrow when you can have both?
Investors are often encouraged to choose sides. Growth investors pursue capital appreciation, while income investors focus on generating cash flow. The implication is that achieving one means sacrificing the other.
At Magic Pants Dividend Growth Investing, we see things differently.
Income and growth aren’t competing objectives. They’re two essential components of a successful long-term investment strategy.
A Discovery That Changed My Investing Approach
When I first discovered dividend growth investing, my objective was straightforward: build a portfolio that would generate a reliable and growing stream of income throughout retirement.
What I discovered was something even more compelling.
Dividend growth investing wasn’t just an income strategy. It became the most successful total-return investment approach I had ever followed.
Instead of choosing between income and capital appreciation, I found a disciplined process that delivers both.
That realization became the foundation of Magic Pants Dividend Growth Investing.
The Dividend Growth Advantage
Our approach begins with owning quality businesses capable of consistently growing their earnings, cash flows and dividends.
When a company increases its dividend year after year, something important is usually happening beneath the surface. Its business is generating more cash, management is demonstrating confidence in its future, and shareholders are participating directly in that success.
Over time, growing earnings and dividends can support higher share prices.
That’s why we often say:
“Dividends lead. Prices follow.”
Not every year, and certainly not in a straight line. Share prices can fluctuate wildly based on sentiment, interest rates and market narratives.
But over longer periods, business fundamentals ultimately matter more than short-term market sentiment.
Our job isn’t to predict where stock prices are heading next. It’s to identify quality businesses, buy them at sensible valuations, and let growing earnings and dividends do the heavy lifting.
Real Money. Real Results.
The relationship between growing dividend income and capital appreciation isn’t just a theory. We’re seeing it play out in our real-money Magic Pants Wealth-Builder Model Portfolio (CDN).
Since launching in May 2022, our objective has been to build a growing stream of dividend income while generating competitive long-term total returns.
As of October 31, 2026, the results speak for themselves:
Portfolio Value: $223,870 — exceeding our original business plan projection of $213,641.
Annualized Dividend Income: $5,318 — slightly ahead of our projected $5,298.
What makes these results particularly compelling is that we’ve achieved both objectives simultaneously. Our growing dividend income is supported by quality businesses whose earnings and cash flows have also contributed to substantial capital appreciation.
We’re not sacrificing growth to generate income. We’re using dividend growth investing to pursue both.
The chart below illustrates how our portfolio’s capital value and dividend income have progressed against the business plan established at inception.
Source: Magic Pants Wealth-Builder Model Portfolio (CDN)
Projections (BUDGET) are based on our business plan published May 1, 2022.
The Takeaway
Income provides the cash flow. Growth increases its purchasing power and supports long-term wealth creation.
Together, they create something more powerful than either can deliver alone.
DGI Scorecard
MP Wealth-Builder Model Portfolio (Canada)
Annualized Total Return: +15.8% since inception
Total Return (includes dividends): +15.2 % year-to-date
Dividend Growth: 7.0% year-to-date
Growth Yield: 3.4%
(Inception May 1, 2022, to October 31, 2026. Returns are actual results of our model portfolio in CAD with dividends reinvested.)
This Week’s Highlights
The List (Canada)
Dividend Income Growth: +6.7% year-to-date
Capital Appreciation: +6.9% year-to-date
Dividend Announcements Last Week: Two
Earnings Reports Last Week: Eleven
Earnings Reports This Week: Five
Top Performers from The List Last Week:
Franco Nevada (FNV-N), up +13.34%.
Intact Financial (IFC-T), up +5.90%.
Brookfield Infrastructure Partners (BIP-N), up +5.71%.
Worst Performer Last Week:
Canadian Natural Resources (CNQ-T), down -12.65%.
Watchlists
The Magic Pants 2026 list (The List) includes 26 Canadian dividend-growth stocks, and our new American watchlist (The List-USA) includes 28 companies. Here are the criteria to be considered a candidate on our watchlists:
Dividend growth streak: 10 years or more.
Market cap: At least $1 billion.
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, we add or remove companies from The List annually on January 1. Prices and dividends are updated weekly.
The watchlists are not a portfolio but a coaching tool that helps us think about ideas and manage risk in our model portfolio. We own some, but not all, of the companies on these watchlists. 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 has empowered DIY investors to outperform both actively managed dividend funds and passively managed indexes and dividend ETFs over longer-term horizons.
Each month, in the last week, I will share the updated watchlist for our American dividend growers (The List-USA). I will show the watchlist after the Canadian watchlist above.
New to Magic Pants?
Magic Pants Dividend Growth Investing is a behind-the-scenes look at how we build, maintain, and improve a dividend growth portfolio using real money, real positions, and real results.
Our objective is to grow dividend income by 7-10%+ annually while achieving long-term capital appreciation that matches or exceeds the broader market over a full investing cycle.
The name comes from a simple idea: when a quality company pays a dividend, cash moves from the company’s pocket to yours while your ownership stake remains intact. As earnings and dividends grow, the compounding cycle can accelerate. That’s the magic.
Build Your Own Growing Income Machine
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The Magic Pants model portfolios (Canadian and American) are real-money, dividend-growth portfolios funded with actual capital and executed in live accounts. We own, size, and track every position in real time using our disciplined DGI process.
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From relevant news and quarterly earnings to the latest dividend announcements, we highlight what matters most and explain what it means for dividend growth investors.
