Last updated by BM on July 29, 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 up from the previous week with an average return of +10.0% YTD (capital).
- Last week, there were no dividend announcements from companies on The List.
- Last week, there were three earnings reports from companies on The List.
- This week, ten companies from The List will report on earnings.
DGI Clipboard
“Most professionals can’t win. Can’t. Notice I said ‘can’t’, not don’t win. Why they can’t is a complicated/interesting tale. It boils down to, and believe this, career risk. Professionals can’t afford to lose alone. They must conform.”
– Tom Connolly
Why We Don’t Invest in Dividend ETFs
Intro
An Exchange Traded Fund (ETF) is an investment fund that trades on stock exchanges, similar to individual stocks. It holds a collection of assets such as stocks, bonds, or commodities and is typically designed to track the performance of a specific index, sector, or investment strategy.
A new subscriber recently asked about the advantages of our strategy compared to investing in dividend ETFs. It’s a thoughtful question and one that comes up often. While I’ve addressed it before, it’s worth revisiting the key differences and why we take the approach we do.
Dividend ETFs Often Prioritize Starting Yield Over Growth
Most dividend ETFs are designed to attract income-focused investors. That usually means loading up on high-yield, low-growth stocks. But in our strategy, we seek a balance by focusing on companies that offer both current yield and a track record of dividend growth.
Over time, a growing dividend stream leads to growing capital. That is the true engine of long-term wealth.
Lack of Transparency on Income Growth
ETF websites typically show the fund’s current yield but rarely break down the year-by-year growth of that income. Without visible, consistent income growth, a dividend ETF may be no better than a GIC. Based on our research, most of these funds do not deliver meaningful dividend growth.
A Handful of Great Stocks Beats a Basket of Mediocre Ones
Rather than buying the entire basket, we focus on owning a few high-quality dividend growers. This more selective approach often leads to superior results. Over time, the dividend income and capital returns from a well-chosen group of stocks can surpass the total return of most dividend ETFs.
Sector Concentration Hurts Long-Term Results
Many Canadian dividend ETFs are heavily weighted toward Financials and Energy. This boosts yield, but also increases risk. Energy stocks in particular are cyclical and can drag down returns during downturns. Diversification does not help if you are just spread across two sectors.
ETFs Stay Fully Invested, We Do Not
ETFs are always fully invested. This means when the market corrects, there is no cash on hand to take advantage of better valuations. In our model portfolios, we keep some dry powder ready so we can buy more income at better prices when the opportunity arises.
Short-Term Pressures Hurt Long-Term Results
ETF managers are under constant pressure to deliver short-term performance. This often leads to frequent trading and a tendency to follow the herd. Real wealth is built over time through growing dividends, rising income, and disciplined long-term investing.
Takeaway
Don’t be misled by the short-term performance of some dividend ETFs. They may perform well for a period, especially when heavily weighted in sectors that are temporarily in favour. To get a clearer picture of what these funds truly deliver, focus on their long-term performance by reviewing ten-year or since-inception returns.
The main drawback of dividend ETFs is the missed opportunity to build lasting wealth. For investors seeking reliable income and meaningful long-term growth, owning a carefully selected portfolio of quality dividend growers remains a more effective and rewarding approach.
As dividend growth investors, our success comes from building a repeatable process and executing it consistently, letting the power of compounding do the heavy lifting.
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 up from the previous week, with an average YTD return of +10.0% (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 goeasy Ltd. (GSY-T), up +6.51%.; TFI International (TFII-N), up +6.06%; and Franco Nevada (FNV-N) up +5.47%.
Canadian National Railway (CNR-T) was the worst performer last week, down -3.81%.
| SYMBOL | COMPANY | YLD | PRICE | YTD % | DIV | YTD % | STREAK |
|---|---|---|---|---|---|---|---|
| ATD-T | Alimentation Couche-Tard Inc. | 1.0% | $74.33 | -5.97% | $0.78 | 8.3% | 15 |
| BCE-T | Bell Canada | 8.7% | $33.16 | -1.07% | $2.87 | -28.1% | 16 |
| BIP-N | Brookfield Infrastructure Partners | 5.4% | $31.96 | 0.31% | $1.72 | 6.2% | 17 |
| CCL-B-T | CCL Industries Inc. | 1.6% | $78.40 | 6.49% | $1.28 | 10.3% | 23 |
| CNR-T | Canadian National Railway | 2.7% | $131.40 | -10.48% | $3.55 | 5.0% | 29 |
| CTC-A-T | Canadian Tire | 3.7% | $189.48 | 23.27% | $7.10 | 1.4% | 14 |
| CU-T | Canadian Utilities Limited | 4.7% | $38.84 | 11.67% | $1.83 | 1.0% | 53 |
| DOL-T | Dollarama Inc. | 0.2% | $186.59 | 33.09% | $0.41 | 18.1% | 14 |
| EMA-T | Emera | 4.5% | $64.04 | 19.63% | $2.90 | 0.7% | 18 |
| ENB-T | Enbridge Inc. | 6.1% | $61.67 | -0.32% | $3.77 | 3.0% | 29 |
| ENGH-T | Enghouse Systems Limited | 4.9% | $23.78 | -12.12% | $1.16 | 16.0% | 18 |
| FNV-N | Franco Nevada | 0.9% | $162.85 | 34.44% | $1.52 | 5.6% | 17 |
| FTS-T | Fortis Inc. | 3.7% | $67.28 | 12.85% | $2.46 | 3.1% | 51 |
| GSY-T | goeasy Ltd. | 3.2% | $184.40 | 10.31% | $5.84 | 24.8% | 10 |
| IFC-T | Intact Financial | 1.7% | $305.15 | 16.04% | $5.32 | 9.9% | 20 |
| L-T | Loblaw Companies Limited | 1.0% | $222.19 | 16.81% | $2.21 | 15.2% | 13 |
| MFC-T | Manulife Financial | 4.1% | $42.90 | -2.37% | $1.76 | 10.0% | 11 |
| MGA-N | Magna | 4.6% | $42.60 | 2.06% | $1.94 | 2.1% | 15 |
| MRU-T | Metro Inc. | 1.4% | $105.73 | 17.26% | $1.48 | 10.4% | 30 |
| RY-T | Royal Bank of Canada | 3.3% | $180.97 | 5.05% | $6.04 | 7.9% | 14 |
| SJ-T | Stella-Jones Inc. | 1.5% | $80.71 | 10.58% | $1.24 | 10.7% | 20 |
| STN-T | Stantec Inc. | 0.6% | $151.14 | 33.62% | $0.89 | 7.3% | 13 |
| T-T | Telus | 7.2% | $22.59 | 15.08% | $1.64 | 7.0% | 21 |
| TD-T | TD Bank | 4.1% | $102.65 | 34.18% | $4.20 | 2.9% | 14 |
| TFII-N | TFI International | 1.9% | $93.58 | -29.43% | $1.80 | 12.5% | 14 |
| TIH-T | Toromont Industries | 1.6% | $133.36 | 17.91% | $2.08 | 8.3% | 35 |
| TRI-Q | Thomson Reuters | 1.2% | $203.45 | 25.29% | $2.38 | 10.2% | 31 |
| TRP-T | TC Energy Corp. | 5.3% | $64.74 | -5.10% | $3.40 | 3.3% | 24 |
| WCN-N | Waste Connections | 0.7% | $186.95 | 10.03% | $1.26 | 7.7% | 15 |
| Averages | 3.2% | 10.0% | 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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