Last updated by BM on November 11, 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 of The List stayed the same with an average return of +7.1% YTD (income).
- Last week, the price of The List was up from the previous week with an average return of +10.3% YTD (capital).
- Last week, there were three dividend announcements from companies on The List.
- Last week, there were fourteen earnings reports from companies on The List.
- This week, four companies from The List will report on earnings.
DGI Clipboard
“Earnings are the principal factor determining market value, provided they are reasonably stable and subject to careful analysis.”
– Benjamin Graham
Earnings Growth and Dividend Growth: Two Sides of the Same Coin
Intro
With roughly half of The List reporting earnings last week, it’s a good time to revisit why earnings matter so much in our dividend growth investing strategy and how they ultimately drive the income and long-term returns we are building toward.
The Significance of Earnings in Dividend Growth Investing
When it comes to dividend growth investing, earnings are the engine that drives everything. They determine not only how much a company can pay shareholders today, but also how much it can sustainably grow those payments in the future. Benjamin Graham, the father of value investing, put it best when he said, “In the short run, the market is a voting machine, but in the long run, it is a weighing machine.” What it weighs, of course, is earnings power, the ability of a business to generate consistent, growing profits.
For dividend growth investors, that principle sits at the core of every decision we make. Our strategy is built on identifying high-quality companies that can reliably grow earnings over time. Why? Because earnings growth funds dividend growth, and dividend growth fuels long-term total returns. In fact, over the long run, the two are almost always aligned. When a company’s earnings compound steadily, its dividends tend to follow a similar upward path.
Earnings: The Foundation of Dividend Safety
A company that earns more each year can afford to raise its dividend without jeopardizing its balance sheet. When earnings stagnate or decline, the payout ratio, the percentage of profits paid out as dividends, begins to creep higher, and that is when risk enters the picture. The most sustainable dividend growth stories are those backed by stable, predictable earnings streams.
That is why our process emphasizes quality first. We look for businesses with durable competitive advantages, recurring revenues, and management teams that allocate capital wisely. These companies tend to produce consistent earnings regardless of economic cycles. Think of regulated utilities, consumer staples, or railways, sectors where steady demand supports steady profits. When earnings are predictable, dividend growth becomes predictable too.
The Power of Compounding Earnings
Earnings growth does not just support dividends; it multiplies value. Over time, compounding earnings translate into higher share prices, creating the classic “double double” effect of dividend growth investing: rising income and rising capital value.
John Bogle, another investing legend, famously summarized expected market returns as:
Future Returns = Dividend Yield + Earnings Growth (Dividend Growth) ± Change in Valuation.
That middle term, earnings growth, is what really moves the needle over decades. Even if valuations fluctuate, companies that consistently grow earnings at 8 to 10 percent annually tend to deliver similar total returns over the long run. Dividend growth often mirrors that same pace, since management teams typically aim to keep payout ratios steady as profits increase.
Why We Focus on Earnings Trends
In our model portfolios, we spend less time predicting next quarter’s numbers and more time studying long-term earnings trajectories. We look for a track record of at least ten years of growth, the accuracy of analyst forecasts, and how management has performed against those expectations. These trends tell us far more about the reliability of future dividends than any headline or market forecast.
When we find companies that pair consistent earnings growth with sensible valuations, we are willing to be patient owners. As earnings compound, dividends follow, and so does total shareholder wealth.
Takeaway
Dividends may be what we see and collect, but earnings are what make them possible. Over time, dividend growth and earnings growth move hand in hand, reinforcing one another. For the dividend growth investor, understanding and respecting that relationship is the difference between chasing yield and building lasting wealth. In the end, it is not the market’s opinion that counts, it is the steady, growing earnings behind the businesses we own that do the heavy lifting.
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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 +7.1% YTD (income).
The price of ‘The List’ was up from the previous week, with an average YTD return of +10.3% (capital).
Last week’s best performers on ‘The List’ were Intact Financial (IFC-T), up +7.09%.; Canadian Tire (CTC-A-T), up +6.93%; and Magna (MGA-N) up +5.63%.
goeasy Ltd. (GSY-T) was the worst performer last week, down -23.24%.
| SYMBOL | COMPANY | YLD | PRICE | YTD % | DIV | YTD % | STREAK |
|---|---|---|---|---|---|---|---|
| ATD-T | Alimentation Couche-Tard Inc. | 1.1% | $68.51 | -13.33% | $0.78 | 8.3% | 15 |
| BCE-T | Bell Canada | 8.8% | $32.53 | -2.95% | $2.87 | -28.1% | 16 |
| BIP-N | Brookfield Infrastructure Partners | 4.9% | $35.22 | 10.55% | $1.72 | 6.2% | 17 |
| CCL-B-T | CCL Industries Inc. | 1.6% | $79.12 | 7.47% | $1.28 | 10.3% | 23 |
| CNR-T | Canadian National Railway | 2.7% | $133.31 | -9.18% | $3.55 | 5.0% | 29 |
| CTC-A-T | Canadian Tire | 4.1% | $171.99 | 11.89% | $7.10 | 1.4% | 14 |
| CU-T | Canadian Utilities Limited | 4.5% | $41.08 | 18.11% | $1.83 | 1.0% | 53 |
| DOL-T | Dollarama Inc. | 0.2% | $184.94 | 31.91% | $0.41 | 18.1% | 14 |
| EMA-T | Emera | 4.3% | $67.23 | 25.59% | $2.92 | 1.2% | 18 |
| ENB-T | Enbridge Inc. | 5.6% | $66.94 | 8.19% | $3.77 | 3.0% | 29 |
| ENGH-T | Enghouse Systems Limited | 5.5% | $20.98 | -22.47% | $1.16 | 16.0% | 18 |
| FNV-N | Franco Nevada | 0.8% | $192.12 | 58.61% | $1.52 | 5.6% | 17 |
| FTS-T | Fortis Inc. | 3.5% | $71.96 | 20.70% | $2.49 | 4.2% | 51 |
| GSY-T | goeasy Ltd. | 4.5% | $129.46 | -22.55% | $5.84 | 24.8% | 10 |
| IFC-T | Intact Financial | 1.9% | $280.17 | 6.54% | $5.32 | 9.9% | 20 |
| L-T | Loblaw Companies Limited | 1.0% | $56.62 | 19.05% | $0.55 | 15.2% | 13 |
| MFC-T | Manulife Financial | 3.8% | $46.85 | 6.62% | $1.76 | 10.0% | 11 |
| MGA-N | Magna | 3.9% | $49.87 | 19.48% | $1.94 | 2.1% | 15 |
| MRU-T | Metro Inc. | 1.6% | $95.01 | 5.37% | $1.48 | 10.4% | 30 |
| RY-T | Royal Bank of Canada | 3.0% | $204.01 | 18.42% | $6.04 | 7.9% | 14 |
| SJ-T | Stella-Jones Inc. | 1.5% | $83.75 | 14.74% | $1.24 | 10.7% | 20 |
| STN-T | Stantec Inc. | 0.6% | $151.44 | 33.89% | $0.89 | 7.3% | 13 |
| T-T | Telus | 7.9% | $20.77 | 5.81% | $1.64 | 7.0% | 21 |
| TD-T | TD Bank | 3.7% | $113.58 | 48.47% | $4.20 | 2.9% | 14 |
| TFII-N | TFI International | 2.1% | $87.34 | -34.14% | $1.80 | 12.5% | 14 |
| TIH-T | Toromont Industries | 1.3% | $160.98 | 42.33% | $2.08 | 8.3% | 35 |
| TRI-Q | Thomson Reuters | 1.7% | $137.57 | -15.28% | $2.38 | 10.2% | 31 |
| TRP-T | TC Energy Corp. | 4.6% | $73.26 | 7.39% | $3.40 | 3.3% | 24 |
| WCN-N | Waste Connections | 0.8% | $166.18 | -2.20% | $1.30 | 10.7% | 15 |
| Averages | 3.2% | 10.3% | 7.1% | 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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