Timely Ten: Your Monthly Dividend Growth Shopping List Has Arrived
MP Market Review - May 15, 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. 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.
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.
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.
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 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.
