MP Market Review – December 01, 2023
Posted by BM on December 04, 2023
Summary
This is a weekly instalment of our MP Market Review series, which provides updates on the financial markets and Canadian dividend growth companies we monitor on 'The List'.
Last week, 'The List' was up with a YTD price return of +3.4% (capital). Dividends have increased by +9.0% YTD, highlighting the growth in the dividend (income).
Last week, four dividend announcements from companies on 'The List'.
Last week, three earnings reports from companies on 'The List'.
No companies on 'The List' are due to report earnings this week.
The List (2023)
The Magic Pants List includes 27 Canadian dividend growth stocks. Each have raised their dividend annually for the last ten years (or longer) and have a market cap of over a billion dollars. Based on these criteria, companies on ‘The List’ are added or removed annually, on January 1. Prices and dividends are updated weekly.
While 'The List' does not function as a portfolio on its own, it serves as an excellent initial reference for individuals looking to diversify their investments and achieve higher returns in the Canadian stock market. Through our newsletter, readers gain a deeper understanding of how to implement and benefit from our Canadian dividend growth investing strategy.
If you're interested in creating your own dividend growth income portfolio, consider subscribing to our premium service. Subscribers gain access to buy/sell alerts and exclusive content available only to subscribers.
Performance of 'The List'
Last week, 'The List' was up with a YTD price return of +3.4% (capital). Dividends have increased by +9.0% YTD, highlighting the growth in the dividend (income).
The best performers last week on 'The List' were Stantec Inc. (STN-T), up +6.64%; Algonquin Power & Utilities (AQN-N), up +4.81%; and Waste Connections (WCN-N), up +4.74%.
Franco Nevada (FNV-N) was the worst performer last week, down -3.74%.
DGI Clipboard
“It is far better to buy a great business at a fair price than a fair business at a great price”
- Warren Buffett
Less is better: quality not quantity for safely building wealth.
It is no coincidence that our dividend growth investing strategy incorporates identifying individual ‘quality’ companies as the first step in our process. Study after study backs our strategy that the best way to have long-term investment success is to select a few individual quality stocks and hold for the growing income. Buying quantity (think ETF) does not reduce risk, it only lowers your returns. Risk is in the price we pay not in how many stocks we own.
Understanding this key difference in what we do and what others don’t, is the key to our long-term success.
Although we don’t have a formal quality rating system, we identify quality individual companies by looking for indicators that have shown themselves to be highly predictive of long-term success. Stocks with strong business models and steady financial results over time are the ones we eventually invest in. We also value the independent research from services that sell information for a living (Value Line, S&P Credit Ratings). For more information on all our quality indicators read our post ‘Finding Quality Dividend Growth Stocks’ which was recently updated.
Because of our focus on quality, you will see us sometimes open a position in a company when it reaches a sensible price as opposed to one that has a great price.
There were a few significant events this past week, which we will touch on in this issue. First the passing of Charlie Munger, Buffett’s right-hand man. Secondly, bank earnings were released. Finally, an update on the Cobre Panama mine, where the Panamanian court ruled that Law 406 was unconstitutional. Franco Nevada (FNV-T), a core stock on ‘The List’ and in our model portfolio, has a significant royalty stream coming from this mine.
For subscribers of our premium service, I’ll go over all the latest earnings reports and any dividend announcements from the companies we follow on ‘The List’. But first, let’s take a closer look at some of the news stories we found relevant last week...
