Last updated by BM on October 17, 2022
Summary
- This article is part of our weekly series (MP Market Review) highlighting the performance and activity from the previous week related to the financial markets and Canadian dividend growth companies we follow on ‘The List’.
- Last week, ‘The List’ was down slightly with a minus -9.1% YTD price return (capital). Dividend growth of ‘The List’ remains at +10.3% YTD, demonstrating the rise in income over the last year.
- Last week, there were no dividend increases from companies on ‘The List’.
- Last week, there were no earnings reports from companies on ‘The List’.
- No companies on ‘The List’ are due to report earnings this week.
- Are you looking to build an income portfolio of your own? When you become a premium subscriber, you get exclusive access to the MP Wealth-Builder Model Portfolio (CDN) and subscriber-only content. Start building real wealth today! Learn More
“Bear markets are an opportunity for investors to raise their portfolio quality by allocating capital to the higher quality stocks that rarely see steep drops.”
– Austin Rogers, Seeking Alpha Contributor
Every week we publish the data from ‘The List’ to demonstrate our dividend growth strategy in action. Included in that list are some of the highest-quality stocks that Canada offers.
In a post from last year, we talk about the quality indicators we look for to classify a company as high quality. Here is a quick summary:
- Dividend Growth Streak
- Dividend Growth Rates (5YR and 10YR)
- Payout Ratios (Dividends vs Earnings) (Dividends vs Free Cash Flow)
- Recent Dividend Increase
- Dividend Growth and Price Growth Alignment
In addition, we look to third parties for independent research on our quality companies. These companies are paid to conduct in-depth analyses of the stocks we follow, so we like to see that they back up the research we have done.
- Value Line’s Safety Rank
- Value Line Financial Strength
- S&P Credit Ratings
Finally, we rank the companies on ‘The List’ by our quality indicators so that when opportunities (like now) arise, we are ready to allocate our capital to … ”higher quality stocks that rarely see steep drops.”
Performance of ‘The List’
At the end of the post is a snapshot of ‘The List’ from last Friday’s close. Feel free to click on the ‘The List’ menu item above for a sortable version.
Last week, ‘The List’ was down slightly with a minus -9.1% YTD price return (capital). Dividend growth of ‘The List’ remains at +10.3% YTD, demonstrating the rise in income over the last year.
The best performers last week on ‘The List’ were Alimentation Couche-Tard Inc. (ATD-T), up +3.35%; TD Bank (TD-T), up +3.25%; and Metro (MRU-T), up +2.23%.
Brookfield Infrastructure Partners (BIP-N) was the worst performer last week, down -4.76%.
Recent News
Rate hikes will continue despite fears of a recession, Bank of Canada Governor says (Globe & Mail)
“At this point, there isn’t a trade-off here. We need to cool the economy, and we need to get inflation down,” Mr. Macklem said, reiterating the central bank’s intention to raise interest rates again on Oct. 26.
Five consecutive rate hikes since March are starting to take their toll on the Canadian economy. There is lots of talk about an upcoming recession. We agree with the experts, it is going to get worse before it gets better. We should have plenty of opportunities to build our dividend growth portfolios with quality companies.
Six-per-cent dividend yields from blue chip stocks are there for the taking (Globe & Mail)
“If you’re going to buy stocks on sale, a record of dividend growth is a good place to start your research.”
We learned a long time ago how important dividend growth is. We also learned not to go chasing high yields. A higher-than-average yield isn’t necessarily a buy signal. In the case of the list compiled by the author, we would assess each stock individually using our quality and valuation indicators before entering a position. There are a couple that are worth further research.
No companies on ‘The List’ are due to report earnings this week.
Dividend Increases
Last week, there were no dividend increases from companies on ‘The List’.
Earnings Releases
Last week, there were no earnings reports from companies on ‘The List’.
Below is a snapshot of ‘The List’ from last Friday’s close. For a sortable version of ‘The List’, please click on The List menu item.
‘The List’ is not meant to be a template for investors to copy exactly. Instead, its purpose is to provide investment ideas and a real-time illustration of dividend growth investing in action. It is not a ‘Buy List’ nor does it reflect the composition or returns of our Magic Pants Wealth-Builder (CDN) Portfolio. It is only a starting point for our analysis and discussion.
The List (2022)
Last updated by BM on October 14, 2022
*Note: The following graph is wide, you can scroll to the right on your device to see more of the data.
| SYMBOL | COMPANY | YLD | PRICE | YTD % | DIV | YTD % | STREAK |
|---|---|---|---|---|---|---|---|
| AQN-N | Algonquin Power & Utilities | 6.9% | $10.24 | -28.6% | $0.70 | 5.4% | 11 |
| ATD-T | Alimentation Couche-Tard Inc. | 0.8% | $57.65 | 10.7% | $0.44 | 18.1% | 12 |
| BCE-T | Bell Canada | 6.3% | $58.07 | -11.9% | $3.64 | 4.0% | 13 |
| BIP-N | Brookfield Infrastructure Partners | 4.4% | $32.79 | -19.5% | $1.44 | 5.9% | 14 |
| CCL-B-T | CCL Industries | 1.5% | $64.26 | -5.2% | $0.96 | 14.3% | 20 |
| CNR-T | Canadian National Railway | 2.0% | $148.60 | -4.1% | $2.93 | 19.1% | 26 |
| CTC-A-T | Canadian Tire | 3.9% | $149.33 | -18.5% | $5.85 | 24.5% | 11 |
| CU-T | Canadian Utilities Limited | 5.3% | $33.71 | -7.9% | $1.78 | 1.0% | 50 |
| DOL-T | Dollarama Inc. | 0.3% | $79.96 | 26.1% | $0.22 | 9.2% | 11 |
| EMA-T | Emera | 5.1% | $52.31 | -16.4% | $2.68 | 4.1% | 15 |
| ENB-T | Enbridge Inc. | 6.9% | $49.94 | 0.8% | $3.44 | 3.0% | 26 |
| ENGH-T | Enghouse Systems Limited | 2.5% | $28.39 | -38.1% | $0.72 | 16.3% | 15 |
| FNV-N | Franco Nevada | 1.1% | $115.16 | -15.4% | $1.28 | 10.3% | 14 |
| FTS-T | Fortis | 4.3% | $50.27 | -16.9% | $2.17 | 4.3% | 48 |
| IFC-T | Intact Financial | 2.1% | $193.51 | 18.2% | $4.00 | 17.6% | 17 |
| L-T | Loblaws | 1.4% | $109.27 | 6.4% | $1.54 | 12.4% | 10 |
| MGA-N | Magna | 3.7% | $48.87 | -40.1% | $1.80 | 4.7% | 12 |
| MRU-T | Metro | 1.6% | $69.09 | 3.1% | $1.10 | 12.2% | 27 |
| RY-T | Royal Bank of Canada | 4.1% | $121.94 | -10.9% | $4.96 | 14.8% | 11 |
| SJ-T | Stella-Jones Inc. | 1.9% | $41.07 | 1.0% | $0.80 | 11.1% | 17 |
| STN-T | Stantec Inc. | 1.1% | $62.63 | -10.8% | $0.71 | 6.8% | 10 |
| TD-T | TD Bank | 4.2% | $84.91 | -14.5% | $3.56 | 12.7% | 11 |
| TFII-N | TFI International | 1.2% | $92.95 | -16.1% | $1.08 | 12.5% | 11 |
| TIH-T | Toromont Industries | 1.6% | $97.08 | -14.6% | $1.52 | 15.2% | 32 |
| TRP-T | TC Energy Corp. | 6.4% | $56.20 | -5.9% | $3.57 | 4.4% | 21 |
| T-T | Telus | 4.9% | $27.06 | -9.1% | $1.33 | 6.2% | 18 |
| WCN-N | Waste Connections | 0.7% | $124.54 | -7.1% | $0.92 | 8.9% | 12 |
| Averages | 3.2% | -9.1% | 10.3% | 18 |
