Last updated by BM on July 15, 2024
Summary
This is a weekly installment of our MP Market Review series, which provides updates on the financial markets and Canadian dividend growth companies we monitor on ‘The List’.
- Forget Timing the Market: Embrace Our Proven Dividend Growth Strategy in this week’s newsletter.
- Last week, dividend growth of ‘The List’ stayed the course and has increased by +8.8% YTD (income).
- Last week, the price of ‘The List’ was up with a return of +7.3% YTD (capital).
- Last week, there were no dividend announcements from companies on ‘The List’.
- Last week, there were no earnings reports from companies on ‘The List’.
- This week, no companies on ‘The List’ are due to report earnings.
DGI Clipboard
“The best time to invest is when you have money. This is because history suggests it is not timing the market that matters, but time in the market.”
-Charles Schwab
Forget Timing the Market: Embrace Our Proven Dividend Growth Strategy
Weeks like the one we just experienced remind me of the benefits of our dividend growth strategy. As retirees, we invest in quality companies, allowing us to generate income without the need to buy and sell frequently. Our approach is backed by decades of data demonstrating the challenges of timing the market.
Consistently timing the market is impossible. There literally is no human being who can claim that he or she has been successful at that task with any degree of honesty. However, timing the market is not only unachievable, attempting to time the market can lead to poor investment returns.
The next chart, taken from CNBC, gives insights into the impact on a portfolio when an investor misses the 10 days in each decade when the market registers the largest gains.
The study results, which Bank of America provided, span the period from 1930 to 2020. It reveals that an investor holding through the highs and lows would have a 17,715% gain. However, by missing the 10 biggest days of each decade, the total return over that 90-year period would amount to just 28%!
Last week, our post highlighted that half of ‘The List’ was undervalued (according to dividend yield theory), signaling great buying opportunities. Although we issued only one ‘DGI Alert’ for our model portfolio before the market surged, we’re fine with our decision. Why? Because all the companies we had invested in previously saw significant gains. We were already in the market when it took off!
DGI Scorecard
The List (2024)
The Magic Pants 2024 list includes 28 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.
While ‘The List’ is not a standalone portfolio, it functions admirably as an initial guide for those seeking to broaden their investment portfolio and attain superior returns in the Canadian stock market. Our newsletter provides readers with a comprehensive insight into the implementation and advantages of our Canadian 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.
For those interested in something more, please upgrade to a paid subscriber; you get the enhanced weekly newsletter, access to premium content, full privileges on the new Substack website magicpants.substack.com and DGI alerts whenever we make stock transactions in our model portfolio.
Performance of ‘The List’
Last week, dividend growth of ‘The List’ stayed the course and has now increased by +8.8% YTD (income).
Last week, the price return of ‘The List’ was up with a return of +7.3% YTD (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 +9.05%; Magna (MGA-N), up +5.16%; and Alimentation Couche-Tard Inc. (ATD-T), up +4.58%.
Thomson Reuters (TRI-N) was the worst performer last week, down -2.46%.
| SYMBOL | COMPANY | YLD | PRICE | YTD % | DIV | YTD % | STREAK |
|---|---|---|---|---|---|---|---|
| ATD-T | Alimentation Couche-Tard Inc. | 0.9% | $81.49 | 6.2% | $0.70 | 17.4% | 14 |
| BCE-T | Bell Canada | 9.0% | $44.28 | -18.3% | $3.99 | 3.1% | 15 |
| BIP-N | Brookfield Infrastructure Partners | 5.2% | $30.97 | 0.9% | $1.62 | 5.9% | 16 |
| CCL-B-T | CCL Industries Inc. | 1.6% | $72.98 | 26.2% | $1.16 | 9.4% | 22 |
| CNR-T | Canadian National Railway | 2.1% | $163.81 | -1.8% | $3.38 | 7.0% | 28 |
| CTC-A-T | Canadian Tire | 5.0% | $140.94 | 1.7% | $7.00 | 1.4% | 13 |
| CU-T | Canadian Utilities Limited | 5.9% | $30.57 | -4.8% | $1.81 | 0.9% | 52 |
| DOL-T | Dollarama Inc. | 0.3% | $129.07 | 35.8% | $0.35 | 29.5% | 13 |
| EMA-T | Emera | 6.2% | $46.45 | -8.5% | $2.87 | 3.0% | 17 |
| ENB-T | Enbridge Inc. | 7.4% | $49.24 | 1.7% | $3.66 | 3.1% | 28 |
| ENGH-T | Enghouse Systems Limited | 3.2% | $31.60 | -7.0% | $1.00 | 18.3% | 17 |
| FNV-N | Franco Nevada | 1.1% | $129.11 | 17.2% | $1.44 | 5.9% | 16 |
| FTS-T | Fortis Inc. | 4.3% | $54.46 | -0.7% | $2.36 | 3.3% | 50 |
| IFC-T | Intact Financial | 2.0% | $237.67 | 16.9% | $4.84 | 10.0% | 19 |
| L-T | Loblaw Companies Limited | 1.2% | $166.31 | 29.4% | $1.92 | 10.0% | 12 |
| MFC-T | Manulife Financial | 4.3% | $37.00 | 28.1% | $1.60 | 9.6% | 10 |
| MGA-N | Magna | 4.3% | $44.45 | -19.9% | $1.90 | 3.3% | 14 |
| MRU-T | Metro Inc. | 1.7% | $79.25 | 15.7% | $1.34 | 10.7% | 29 |
| RY-T | Royal Bank of Canada | 3.8% | $151.58 | 13.9% | $5.72 | 7.1% | 13 |
| SJ-T | Stella-Jones Inc. | 1.2% | $90.00 | 17.5% | $1.12 | 21.7% | 19 |
| STN-T | Stantec Inc. | 0.7% | $116.12 | 10.9% | $0.83 | 7.8% | 12 |
| T-T | Telus | 7.2% | $21.19 | -10.7% | $1.53 | 7.1% | 20 |
| TD-T | TD Bank | 5.3% | $77.37 | -8.6% | $4.08 | 6.3% | 13 |
| TFII-N | TFI International | 1.1% | $149.64 | 14.1% | $1.60 | 10.3% | 13 |
| TIH-T | Toromont Industries | 1.5% | $124.20 | 10.1% | $1.92 | 11.6% | 34 |
| TRI-N | Thomson Reuters | 1.3% | $165.06 | 15.2% | $2.16 | 10.2% | 30 |
| TRP-T | TC Energy Corp. | 7.2% | $53.17 | 1.6% | $3.84 | 3.2% | 23 |
| WCN-N | Waste Connections | 0.6% | $180.53 | 21.8% | $1.14 | 8.6% | 14 |
| Averages | 3.4% | 7.3% | 8.8% | 21 |
Note: Stocks ending in “-N” declare earnings and dividends in US dollars. To achieve currency consistency between dividends and share price for these stocks, we have shown dividends in US dollars and share price in US dollars (these stocks are listed on a US exchange). The dividends for their Canadian counterparts (-T) would be converted into CDN dollars and would fluctuate with the exchange rate.
Check us out on magicpants.substack.com for more info in this week’s issue….
