Timely Ten: Your Monthly Valuation Compass for Dividend Growth Stocks
MP Market Review - March 17, 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: +6.0% 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.
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 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.
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 6.0% (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.
