Last updated by BM on May 5, 2026
Summary
This is not a stock-picking newsletter.
It’s a behind-the-scenes look at how a dividend growth portfolio is built, maintained, and improved over time.
Welcome to this week’s MP Market Review. Each week, we track the Canadian dividend growth companies on The List, our curated watchlist of businesses designed to produce rising income. While we also publish a U.S. edition monthly, Canada remains our training ground.
Our objective is simple: grow dividend income by 7–10%+ annually while delivering capital appreciation that matches or exceeds the TSX Composite in Canada and the S&P 500 for our U.S. investors over a full market cycle.
What you’re about to read isn’t theory. It’s the real-time application of a dividend growth strategy using real money, with a clear objective: growing income first and letting capital growth follow.
Markets generate a lot of noise. We ignore most of it.
Instead, we track a small set of metrics that tell us whether our dividend growth strategy is working in real time. No forecasts. No opinions. Just results.
Here they are:
- Dividend income from The List: +6.4% year-to-date
- Capital value: +2.6% year-to-date
- Dividend announcements last week: None
- Earnings reports last week: Six
- Earnings reports this week: Eight
DGI Clipboard
“The stock market is random from year-to-year, yet highly predictable over a full investing cycle.”
Predictable Long-Term Returns: The Quiet Advantage of Dividend Growth Investing
We made it!
April 30, 2026 marked the four-year milestone of our public MP Wealth-Builder Model Portfolio (CDN) Business Plan. The mandate was straightforward: build a real money, disciplined, process-driven portfolio of high-quality dividend growth companies and let compounding do the work.
We started with $100,000, deployed methodically over the first four years, then layered in an additional $1,000 per month beginning in Year 2 to accelerate the income engine..
What stands out is not just the performance. It’s how predictable the outcome has been.
The annual dividends collected and the end of year portfolio value we laid out at the beginning of this journey came very close to reality. Not because we outguessed the market. Not because we chased trends.
Because we followed a repeatable process grounded in dividend growth.
The Part Most Investors Miss
We achieved this without owning a single high-flying tech or AI name.
No hype. No speculation.
Just a portfolio of Canadian businesses across:
- Banks
- Pipelines
- Railroads
- Utilities
- Grocers
- Select resource companies
The kind of companies most investors overlook because they are “boring.”
That’s exactly the point.
Boring businesses with predictable cash flows tend to produce predictable dividends. And predictable dividends, over time, lead to predictable returns.
Meanwhile, the Market Did What It Always Does
Short term? Chaos.
From 2022 through 2026, the Toronto Stock Exchange delivered a steady stream of volatility:
2022: Rate Shock Selloff
- TSX dropped roughly 12–15% in weeks
- Central banks tightened aggressively
- Banks and cyclicals sold off hard
2023: Banking Panic
- A 5–7% drop tied to the collapse of Silicon Valley Bank
- Canadian banks were dragged down despite fundamentally different risk profiles
Late 2023: Bond Yield Surge
- TSX declined another 8–10%
- “Higher for longer” became the dominant narrative
- Utilities, pipelines, and REITs were hit
2024: Inflation Repricing
- Markets pulled back 5–8%
- Rate cuts were delayed again
- Defensive names held up better than most
2025–2026: Oil Volatility
- Short-term spikes and pullbacks driven by geopolitical tension
Here’s the Reality Most Investors Refuse to Accept
None of this mattered.
Not to long-term outcomes.
This is where most investors go off track. They treat volatility as risk. It isn’t.
Volatility is noise.
The real driver of long-term returns is far simpler:
Dividend Yield + Dividend Growth +/- Change in P/E Ratio
That’s it.
Strip away the headlines, and you’re left with a business generating cash, growing that cash, and returning a portion of it to you year after year.
That’s not speculation. That’s a process.
Income First. Price Follows.
Over the past four years, our portfolio didn’t succeed because prices went up.
Prices followed income.
As dividends grew, the underlying value of the businesses increased. Over time, the market recognized that value.
That’s the sequence:
- Businesses grow earnings
- Dividends increase
- Income rises
- Prices eventually catch up
You don’t need to predict sentiment. You need to own businesses that grow.
Takeaway
The lesson is straightforward.
Stop reacting to narratives.
Use them.
Every major drawdown listed above was not a warning sign. It was an entry point.
Dividend growth investing works because it aligns with how businesses actually operate. Companies grow earnings. They raise dividends. Over time, that compounds into both rising income and capital.
It’s not flashy. It’s not exciting.
But it is one of the most predictable long-term investment strategies available.
And if you stay disciplined, you don’t need to be right about the market.
You just need to be right about the businesses you own.
Looking for a helping hand in the market? Members of Magic Pants Dividend Growth Investing get exclusive ideas and guidance to navigate any climate.
The Magic Pants model portfolios (Canadian and American) are real-money dividend growth portfolios funded with actual capital and executed in live accounts. Every position shown is owned, sized, and tracked in real time using our disciplined DGI process.
Become a paid subscriber, and I’ll show you exactly how I do it. In addition, gain full access to this post and exclusive, subscriber-only content. We do the work; you stay in control.
DGI Scorecard
The Magic Pants 2026 list (The List) includes 26 Canadian dividend growth stocks and our new American watchlist (The List-USA) contains 28 companies. Here are the criteria to be considered a candidate on our watchlists:
- 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’
The dividend growth of The List stayed the same last week, with an average YTD increase of 6.4% (income).
The price of The List was up last week and now stands at +2.6% YTD (capital).
Top Performers Last Week:
- TC Energy Corp. (TRP-T), up +6.89%.
- Alimentation Couche-Tard Inc. (ATD-T), up +5.67%.
- Canadian Natural Resources (CNQ-T), up +5.26%.
Worst Performer Last Week:
- Franco Nevada (FNV-N), down -6.56%.
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.
PAID subscribers enjoy full access to our enhanced weekly newsletter, premium content, and easy-to-follow trade alerts so they can build DGI portfolios alongside ours. This service provides the resources to develop your DGI business plan confidently. We do the work; you stay in control!
It truly is the subscription that pays dividends!
The greatest investment you can make is in yourself. Are you ready to take that step?
For more articles and the full newsletter, check us out on magicpants.substack.com.
