When Stocks Fall, Dividend Growth Investors Rise
MP Market Review - April 1, 2025
Welcome to this week’s MP Market Review – your go-to source for insights and updates on the Canadian dividend growth companies we track on ‘The List’! While we’ve expanded our watchlists to include U.S. companies (The List-USA), our Canadian lineup remains the cornerstone of our coaching approach.
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Your journey to dividend growth mastery starts here – let’s dive in!
Last week, dividend growth stayed the same, with an average return of +7.0% YTD (income).
Last week, the price of 'The List' was up from the previous week with an average return of +0.11% YTD (capital).
Last week, there were no dividend announcements made by companies on 'The List'.
Last week, there were no earnings reports from a company on 'The List'.
One company on 'The List' is due to report earnings this week.
DGI Clipboard
“Our increasing income comes from our companies directly, not the market.”
-Tom Connolly
When Stocks Fall, Dividend Growth Investors Rise
Intro
In The past few months have tested the resolve of many investors. With stocks retreating from recent all-time highs, it's in moments like these that the difference between true long-term investors and short-term speculators becomes crystal clear.
As dividend growth investors, we understand that wealth is built not by timing the market, but by time in the market. Staying the course during volatility gives us the best opportunity to harness the power of compounding, leading to growing streams of dividend income and the potential for substantial capital appreciation over time.
This is when discipline matters most. When sentiment is low and prices are falling, buying high-quality dividend growers may feel uncomfortable in the short term, but history has shown it can be a brilliant move over the next 10 to 20 years.
It’s natural to feel the urge to protect your portfolio from further price declines. But for those focused on growing reliable income, market pullbacks are not threats, they’re opportunities. Opportunities to accumulate shares of great businesses at more attractive yields, setting the stage for future income and long-term gains.
One of the ways we deal with volatile times is to focus on our income (dividends). Knowing that our income is unaffected by markets is another magical thing about what we do. The chart below (10YR DIV PAID) helps us sit tight during market volatility waiting patiently for an opportunity to purchase our quality dividend growers at better prices.
Sorted by total dividends paid over the past 10 years 📈
If you had invested $10,000 in each stock on The List on January 1, 2015, here’s how much you would have collected in dividends by now. On average, that's $3,968—about 40% of your initial investment returned in cash.
Starting yield (Yield 2015) plays a big role in early dividend income, but don’t count out the low-yield, high-growth names. Some are catching up fast.
Take goeasy Ltd., for example. Despite a modest starting yield, its high dividend growth means you’d have already received your entire initial investment back in dividends alone.
That’s the power of compounding + disciplined dividend growth investing.
Dividend Return represents the annualized return you're earning from dividends alone based on your initial investment—and it continues to grow with every dividend increase.
At an average of 5.9%, the names on The List are closing in on the stock market's historic total return (7%)—but through dividends alone.
At this pace, it won’t be long before our income return rivals (or surpasses) what most investors hope to earn in total return.
That’s the quiet power of dividend growth.
Wrap Up
Keeping last week’s 10YR TR CAGR and this week’s 10YR DIV PAID charts nearby is how dividend growth investors deal with short term market uncertainty.
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DGI Scorecard
The List (2025)
The Magic Pants 2025 list includes 29 Canadian dividend growth stocks. Here are the criteria to be considered a candidate on ‘The List’:
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 the valuation looks attractive.
Our newsletter provides readers with comprehensive insight into the implementation and advantages of our dividend growth investing strategy. This evidence-based, unbiased approach empowers DIY investors to outperform actively managed dividend funds, passively managed indexes, and dividend ETFs over longer-term horizons.
At the end of every month, I will show the updated watchlist for our American dividend growers (‘The List-USA’). The watchlist will be shown after the Canadian watchlist below.
Performance of 'The List'
Last week, dividend growth stayed the same, with an average return of +7.0% YTD (income).
The price of 'The List' was up from the previous week, with an average YTD return of +0.11% (capital).
Even though prices may fluctuate, the dependable growth in our income does not. Stay the course. You will be happy you did.
Last week's best performers on 'The List' were Brookfield Infrastructure Partners (BIP-N), up +3.45%; Loblaw Companies Limited (L-T), up +3.29%; and Metro Inc. (MRU-T), up +2.89%.
Magna (MGA-N) was the worst performer last week, down -6.64%.
Last week was relatively quiet on the earnings front, but the indexes posted another down week. Having a process truly sets us apart from the “growth-at-any-price” crowd. While markets remain volatile, our dividend-focused watchlists are holding up well, just as designed.
With fresh tariff announcements, things could get interesting in the week ahead. More on that, and upcoming earnings, below!
