Last updated by BM on July 15, 2025
Summary
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 +6.9% YTD (income).
- Last week, the price of The List was down slightly from the previous week with an average return of +8.6% 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 will report on earnings.
DGI Clipboard
“Current yield, using its own historic yield as a guide, is, in my view, a fine valuation measure.”
— Tom Connolly
The Timely Ten Advantage: Turning Value into Long-Term Gains
Intro
Every month, our Timely Ten post draws hundreds of readers, and for good reason. It highlights the most undervalued dividend growth stocks from our carefully curated watchlists, often pointing to some of the best long-term opportunities on the market. In this update, I’m spotlighting two past standouts: one Canadian and one American. We added both to our model portfolios after they appeared in the Timely Ten, and each has since delivered impressive returns.
Keeping with our incremental buying strategy in downward trending markets, we added Toronto Dominion Bank (TD-T) to our Canadian model portfolio on four separate occasions over the past three years. At the time of each purchase, the dividend yields were 4.5%, 4.93%, 5.18%, and 5.38%, all well above the stock’s ten-year historical average of 4.02%.
Since then, TD’s share price has climbed significantly, and the current yield has returned closer to its long-term average. Our total price return on the position is now approaching 30%, with our growth yield (yield on cost) now well above 5% and still growing.
On the American side, Wisconsin Electric (WEC-N) was attractively valued when it first showed up in our Timely Ten back early 2024. We made our first purchase in January and liked it so much we added it again in the summer of 2024 to our U.S. model portfolio. At the time, the dividend yields were near historical highs at 3.78% and 3.76%. Since then, the stock has rallied, and the current yield has moved back toward its historical average of 3.14%.
Our total price return on the position is now approaching 25%, with a growth yield (yield on cost) exceeding 4% and continuing to grow.
Here’s a recap on how we select our ‘Timely Ten’:
Step three in our process involves monitoring our quality dividend growers regularly, which can become quite challenging depending on the number of companies we track. Fortunately, we rely on ‘The List’ instead of the vast array of stocks in the index, 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 aiding us with 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. Knowing that price and yield go in opposite directions, this theory helps us find 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 shorter term. These are our ‘Timely Ten’.
Takeaway
While not every stock we purchase makes it into the Timely Ten, most of the dividend growth names we follow have historically aligned with dividend yield theory. Use the monthly Timely Ten blog post as a starting point for further research. It’s a reliable guide you’ll be glad you turned to.
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.
If you’re a new investor looking to build positions in the ‘Timely Ten’, there is no time like the present to start your research and act.
Become a paid partner, and I’ll show you exactly how I do it. With real money. In real stocks. In addition, gain full access to this post and exclusive, subscriber-only content. We do the work; you stay in control. Subscribe today and take your dividend growth investing to the next level!
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 valuation looks attractive.
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.
Performance of ‘The List’
Last week, dividend growth stayed the same, with an average return of +6.9% YTD (income).
The price of ‘The List’ was down slightly from the previous week, with an average YTD return of +8.6% (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 Bell Canada (BCE-T), up +5.61%.; Stella-Jones Inc. (SJ-T), up +4.16%; and Telus (T-T) up +2.41%.
Brookfield Infrastructure Partners (BIP-N) was the worst performer last week, down -4.90%.
| SYMBOL | COMPANY | YLD | PRICE | YTD % | DIV | YTD % | STREAK |
|---|---|---|---|---|---|---|---|
| ATD-T | Alimentation Couche-Tard Inc. | 1.1% | $68.63 | -13.18% | $0.78 | 8.3% | 15 |
| BCE-T | Bell Canada | 8.8% | $32.57 | -2.83% | $2.87 | -28.1% | 16 |
| BIP-N | Brookfield Infrastructure Partners | 5.3% | $32.40 | 1.69% | $1.72 | 6.2% | 17 |
| CCL-B-T | CCL Industries Inc. | 1.6% | $79.35 | 7.78% | $1.28 | 10.3% | 23 |
| CNR-T | Canadian National Railway | 2.5% | $143.93 | -1.94% | $3.55 | 5.0% | 29 |
| CTC-A-T | Canadian Tire | 3.8% | $189.10 | 23.02% | $7.10 | 1.4% | 14 |
| CU-T | Canadian Utilities Limited | 4.8% | $37.91 | 9.00% | $1.83 | 1.0% | 53 |
| DOL-T | Dollarama Inc. | 0.2% | $190.07 | 35.57% | $0.41 | 18.1% | 14 |
| EMA-T | Emera | 4.6% | $62.97 | 17.63% | $2.90 | 0.7% | 18 |
| ENB-T | Enbridge Inc. | 6.2% | $60.97 | -1.45% | $3.77 | 3.0% | 29 |
| ENGH-T | Enghouse Systems Limited | 5.1% | $22.97 | -15.11% | $1.16 | 16.0% | 18 |
| FNV-N | Franco Nevada | 1.0% | $159.62 | 31.78% | $1.52 | 5.6% | 17 |
| FTS-T | Fortis Inc. | 3.8% | $64.61 | 8.37% | $2.46 | 3.1% | 51 |
| GSY-T | goeasy Ltd. | 3.4% | $169.63 | 1.48% | $5.84 | 24.8% | 10 |
| IFC-T | Intact Financial | 1.7% | $309.37 | 17.64% | $5.32 | 9.9% | 20 |
| L-T | Loblaw Companies Limited | 1.0% | $221.63 | 16.51% | $2.21 | 15.2% | 13 |
| MFC-T | Manulife Financial | 4.2% | $41.71 | -5.08% | $1.76 | 10.0% | 11 |
| MGA-N | Magna | 4.6% | $41.96 | 0.53% | $1.94 | 2.1% | 15 |
| MRU-T | Metro Inc. | 1.4% | $104.51 | 15.90% | $1.48 | 10.4% | 30 |
| RY-T | Royal Bank of Canada | 3.3% | $180.37 | 4.70% | $6.04 | 7.9% | 14 |
| SJ-T | Stella-Jones Inc. | 1.5% | $82.10 | 12.48% | $1.24 | 10.7% | 20 |
| STN-T | Stantec Inc. | 0.6% | $150.96 | 33.46% | $0.89 | 7.3% | 13 |
| T-T | Telus | 7.3% | $22.56 | 14.93% | $1.64 | 7.0% | 21 |
| TD-T | TD Bank | 4.2% | $100.69 | 31.62% | $4.20 | 2.9% | 14 |
| TFII-N | TFI International | 2.0% | $90.04 | -32.10% | $1.80 | 12.5% | 14 |
| TIH-T | Toromont Industries | 1.6% | $127.10 | 12.38% | $2.08 | 8.3% | 35 |
| TRI-Q | Thomson Reuters | 1.2% | $199.17 | 22.66% | $2.38 | 10.2% | 31 |
| TRP-T | TC Energy Corp. | 5.2% | $64.78 | -5.04% | $3.40 | 3.3% | 24 |
| WCN-N | Waste Connections | 0.7% | $183.38 | 7.93% | $1.26 | 7.7% | 15 |
| Averages | 3.2% | 8.6% | 6.9% | 21 |
Note: Stocks ending in “-N or -Q” 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.
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