Last updated by BM on August 26, 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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- Last week, dividend growth of The List 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 +11.6% 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, three companies from 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
Two Stocks That Flew Off the Timely Ten—Were You Ready?
Intro
It is becoming almost routine in today’s volatile markets: each month, one or two companies that appeared in the previous Timely Ten fall off the list. The reason is straightforward: when a stock’s price rises, its dividend yield falls back toward its average, sometimes pushing it out of contention. Seeing this happen in just a few weeks is unusual, but it happens more often than you might expect.
Below are this month’s Canadian and American Timely Ten lists. Two names worth highlighting are goeasy Ltd. (GSY-T) from Canada and Johnson & Johnson (JNJ-N) from the U.S.:
- goeasy Ltd. was trading at $169 with a 3.4% yield when it last appeared on July 11, ranking seventh in our Canadian Timely Ten. By last Friday, the stock had climbed to $209.13, dropping the yield to 2.8%.
- Johnson & Johnson entered the American Timely Ten at ninth place last month with a price of $156.90 and a 3.3% yield. By last Friday, it had risen to $179.29, with the yield now at 2.9%.
For two stocks on the Timely Ten to appreciate this much in just over a month is certainly not the historical norm. Still, it reinforces how effective dividend yield theory can be as a valuation tool for identifying candidates that are undervalued and worth further research.
So how did we miss these? In goeasy Lts.’s case, we already owned shares within our Canadian model portfolio and chose patience over adding more. With Johnson & Johnson, the valuation was attractive, but we were already properly weighted in Healthcare with UnitedHealth and Zoetis, both trading below our cost base. Adding JNJ would have pushed us beyond our sector limits, so we passed.
The takeaway is clear: even when companies look attractively priced, they still need to fit within our broader investment process. A disciplined framework may hold you back at times, but it prevents bigger mistakes in the long run. We are happy to see gains in our existing goeasy Ltd. position and would consider adding more on a pullback. As for Johnson & Johnson, we continue to believe UnitedHealth will deliver better long-term returns, so staying balanced in Healthcare is a trade-off we are comfortable making.
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 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.
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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 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 +11.6% (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 TFI International (TFII-N), up +6.75%.; Franco Nevada (FNV-N), up +4.36%; and Stantec Inc. (STN-T) up +4.31%.
Alimentation Couche-Tard Inc. (ATD-T) was the worst performer last week, down -0.46%.
| SYMBOL | COMPANY | YLD | PRICE | YTD % | DIV | YTD % | STREAK |
|---|---|---|---|---|---|---|---|
| ATD-T | Alimentation Couche-Tard Inc. | 1.1% | $69.70 | -11.83% | $0.78 | 8.3% | 15 |
| BCE-T | Bell Canada | 8.1% | $35.24 | 5.13% | $2.87 | -28.1% | 16 |
| BIP-N | Brookfield Infrastructure Partners | 5.6% | $30.67 | -3.74% | $1.72 | 6.2% | 17 |
| CCL-B-T | CCL Industries Inc. | 1.5% | $83.91 | 13.98% | $1.28 | 10.3% | 23 |
| CNR-T | Canadian National Railway | 2.7% | $132.58 | -9.67% | $3.55 | 5.0% | 29 |
| CTC-A-T | Canadian Tire | 4.2% | $170.09 | 10.66% | $7.10 | 1.4% | 14 |
| CU-T | Canadian Utilities Limited | 4.7% | $38.55 | 10.84% | $1.83 | 1.0% | 53 |
| DOL-T | Dollarama Inc. | 0.2% | $193.35 | 37.91% | $0.41 | 18.1% | 14 |
| EMA-T | Emera | 4.4% | $66.33 | 23.91% | $2.90 | 0.7% | 18 |
| ENB-T | Enbridge Inc. | 5.7% | $66.33 | 7.21% | $3.77 | 3.0% | 29 |
| ENGH-T | Enghouse Systems Limited | 5.1% | $22.78 | -15.82% | $1.16 | 16.0% | 18 |
| FNV-N | Franco Nevada | 0.8% | $185.10 | 52.81% | $1.52 | 5.6% | 17 |
| FTS-T | Fortis Inc. | 3.5% | $70.05 | 17.49% | $2.46 | 3.1% | 51 |
| GSY-T | goeasy Ltd. | 2.8% | $209.13 | 25.11% | $5.84 | 24.8% | 10 |
| IFC-T | Intact Financial | 1.9% | $279.49 | 6.28% | $5.32 | 9.9% | 20 |
| L-T | Loblaw Companies Limited | 1.0% | $56.88 | 19.60% | $0.55 | 15.2% | 13 |
| MFC-T | Manulife Financial | 4.1% | $42.49 | -3.30% | $1.76 | 10.0% | 11 |
| MGA-N | Magna | 4.2% | $46.08 | 10.40% | $1.94 | 2.1% | 15 |
| MRU-T | Metro Inc. | 1.5% | $99.78 | 10.66% | $1.48 | 10.4% | 30 |
| RY-T | Royal Bank of Canada | 3.2% | $190.65 | 10.67% | $6.04 | 7.9% | 14 |
| SJ-T | Stella-Jones Inc. | 1.6% | $78.13 | 7.04% | $1.24 | 10.7% | 20 |
| STN-T | Stantec Inc. | 0.6% | $153.25 | 35.49% | $0.89 | 7.3% | 13 |
| T-T | Telus | 7.1% | $22.94 | 16.86% | $1.64 | 7.0% | 21 |
| TD-T | TD Bank | 4.1% | $102.88 | 34.48% | $4.20 | 2.9% | 14 |
| TFII-N | TFI International | 1.9% | $96.79 | -27.01% | $1.80 | 12.5% | 14 |
| TIH-T | Toromont Industries | 1.4% | $144.71 | 27.95% | $2.08 | 8.3% | 35 |
| TRI-Q | Thomson Reuters | 1.3% | $178.55 | 9.96% | $2.38 | 10.2% | 31 |
| TRP-T | TC Energy Corp. | 4.8% | $70.80 | 3.78% | $3.40 | 3.3% | 24 |
| WCN-N | Waste Connections | 0.7% | $184.78 | 8.75% | $1.26 | 7.7% | 15 |
| Averages | 3.1% | 11.6% | 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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