“You have a pair of pants. In the left pocket, you have $100. You take $1 out of the left pocket and put in the right pocket. You now have $101. There is no diminution of dollars in your left pocket. That is one magic pair of pants.”

Category: MP Market Reviews

MP Market Review – October 28, 2022

Last updated by BM on October 31, 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 up again with a minus -4.2% YTD price return (capital). Dividend growth of ‘The List’ remains at +10.3% YTD, demonstrating the rise in income over the last year.
  • One company on ‘The List’ announced a dividend increase last week.
  • Last week, there were four earnings reports from companies on ‘The List’.
  • Seven 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

“If earnings not paid out in dividends are all successfully reinvested, then these earnings should produce dividends later; if not, then they are money lost. In short, a stock is worth only what you can get out of it.”

– John Burr Williams, The Theory of Investment Value

Once the Bank of Canada increased interest rates 50 basis points instead of 75, the market took off. It seems that ‘not so bad news’ is now good news!

Despite the green on your screen last week, what has fundamentally changed about the outlook for the Canadian economy?

Let’s take a closer look at the four companies on ‘The List’ that reported Q3 earnings last week and see if there is something to be gleaned from the reports.

Canadian National Railway (CNR-T) had a strong start in delivering the Canadian grain crop to market and seems to be hitting on all cylinders for the rest of 2022, increasing guidance and easily meeting expectations.

Canadian Utilities Limited (CU-T) exceeded expectations and is excited about its recent acquisition of Suncor’s wind and solar assets. The purchase is expected to be earnings and cash flow accretive in the first year of operations.

TFI International (TFII-N) seemed to blow expectations out of the water but the stock quickly retreated and was the worst performer on ‘The List’ last week. Not even an announcement about a 30% increase in their 2023 dividend could save the stock price from falling.

Fortis (FTS-T) does what it normally does, executing on its long-term capital plan, and meeting expectations quarter after quarter and raising its dividend year after year (49 years and counting).

From what we can tell, it was (TFII-N)’s outlook that may have spooked the market.  “TFI International’s favorable positioning should enable continued solid results over the remainder of this year and into 2023 assuming no significant degradation in economic conditions.” (TFII-N) is making a big assumption here, and the market wasn’t buying in. They also mentioned in their earnings report that an economic recession is probable, and that would have an adverse effect on their operating companies.

While (CNR-T), (CU-T) and (FTS-T) are aware that the economy is slowing and costs are increasing (inflation), they don’t see that outcome materially impacting their bottom line at this point.

With seven more companies on ‘The List’ reporting this week, we should get a better idea on how good the bad news will be.

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 up again with a minus -4.2% 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 Magna (MGA-N), up +10.32%; Brookfield Infrastructure Partners (BIP-N), up +8.43%; and Stantec Inc. (STN-T), up +6.87%.

TFI International (TFII-N), was the worst performer last week, down -2.66%.

Recent News

Investors seem relieved central banks are pivoting on interest rates. They shouldn’t be. (Globe & Mail)

“For now, investors should be patient. When will stocks become truly attractive again? When inflation finally begins falling in earnest and central banks begin mulling interest rate cuts, not just slower hikes. We are not there yet.”

The author mentions that an economic downturn is nearly certain before the end of 2023. He also cautions us to be aware of bear market bounces as periods of market euphoria can take a while to unwind. It is not uncommon for the cycle to play out over years instead of months.

Seven companies on ‘The List’ are due to report earnings this week.  

Toromont Industries (TIH-T) will release its third-quarter 2022 results on Tuesday, November 1, 2022, after markets close.

Brookfield Infrastructure Partners (BIP-N) will release its third-quarter 2022 results on Wednesday, November 2, 2022, before markets open.

Waste Connections (WCN-N) will release its third-quarter 2022 results on Wednesday, November 2, 2022, after markets close.

Bell Canada (BCE-T) will release its third-quarter 2022 results on Thursday, November 3, 2022, before markets open.

Telus (T-T) will release its third-quarter 2022 results on Friday, November 4, 2022, before markets open.

Enbridge Inc. (ENB-T) will release its third-quarter 2022 results on Friday, November 4, 2022, before markets open.

Magna (MGA-N) will release its third-quarter 2022 results on Friday, November 4, 2022, before markets open.

Dividend Increases

One company on ‘The List’ announced a dividend increase last week.

TFI International (TFII-N) on Thursday said it will be increasing its 2023 quarterly dividend from $0.27 to $0.35 per share, payable January 13, 2023, to shareholders of record on December 30, 2022.

This represents a dividend increase of +30%, marking the 12th straight year of dividend growth for this trucking and logistics company.

Earnings Releases

Last week, four companies on ‘The List’ reported their Q3 Fiscal 2022 earnings. Let’s begin with our favourite railroad.

Canadian National Railway (CNR-T)

“Our back to basics approach continues to drive strong results. CN’s team of railroaders is doing a great job in delivering service to our customers and value for our shareholders. We remain focused on disciplined execution of our integrated operating plan to maximize the effectiveness and efficiency of our incredible three-coast network. We have a busy fourth quarter, with a strong start in the Canadian grain crop, and we are resourced for the months ahead. We are pleased to be raising our 2022 outlook to reflect our performance.”

– Tracy Robinson, President and Chief Executive Officer, CN

Highlights:

  • Record revenues of C$4,513 million, an increase of C$922 million or 26%, mainly due to higher fuel surcharge revenue driven by higher fuel prices, freight rate increases and the positive translation impact of a weaker Canadian dollar.
  • Record operating income of C$1,932 million, an increase of 44%, or an increase of 31% on an adjusted basis.
  • Diluted EPS of C$2.13, a decrease of 10%, mainly due to a merger termination fee received in the third quarter of 2021.
  • Diluted EPS increased by 40% on an adjusted basis, which represents a quarterly record.
  • Operating ratio, defined as operating expenses as a percentage of revenues, of 57.2%, an improvement of 5.5-points, or an improvement of 1.8-points on an adjusted basis.
  • Free cash flow for the first nine months of 2022 was C$2,924 million compared to C$2,034 million for the same period in 2021.
  • Injury frequency rate decreased by 29% and the accident rate decreased by 19%.
  • Car velocity improved by 5% and dwell improved by 9%.
  • Fuel efficiency improved by 1% to 0.838 US gallons of locomotive fuel consumed per 1,000 gross ton miles (GTMs).
  • Origin train performance averaged 87%, an improvement of 12% compared to 78% for the same period in 2021.

Outlook:

CN is now expecting to deliver approximately 25% of adjusted diluted EPS growth (compared to its April 26, 2022 target of 15-20%) and free cash flow of approximately C$4.2 billion in 2022 (compared to its April 26, 2022 target range of C$3.7 billion – C$4.0 billion). CN continues to target an operating ratio below 60% and a ROIC of approximately 15% in 2022.

See the full Earnings Release here

 

Canadian Utilities Limited (CU-T)

“I’m happy to say all of our businesses across the board have continued to perform well, contributing to the overall success of our consolidated business as we delivered another strong quarter of results.”

– Executive Vice President and Chief Financial Officer, Brian Shkrobot

Highlights:

  • Invested $374 million in capital projects of which 78 per cent was invested in regulated utilities and 22 per cent mainly in Energy Infrastructure.
  • Subsequent to quarter-end, on October 5, 2022, Canadian Utilities announced it has entered into a definitive agreement with Suncor Energy Inc. to acquire a portfolio of assets that includes a 252-MW suite of operational wind facilities and a more than 1,500-MW development pipeline of wind and solar projects in Alberta and Ontario for a purchase price of approximately $730 million, subject to closing adjustments. This investment drives meaningful progress towards our previously announced goal of owning, developing or managing more than 1,000-MW of renewable energy by 2030 and is expected to be earnings and cash flow accretive in the first year of operations. The transaction is expected to close in the first quarter of 2023 and is subject to regulatory approvals and closing conditions.
  • Announced a $9 million AUD recoverable grant had been awarded from the New South Wales Government to help fund pre-investment activities in the development of the 325-MW Central West Pumped Storage Hydro project in Australia. A final investment decision on project construction is expected in 2023.
  • In August 2022, the Government of the Northwest Territories announced it is providing Northland Utilities, a 50/50 joint-venture partnership between ATCO Ltd. and Denendeh Investments, with up to $300,000 to support the installation of two public electric vehicle (EV) fast-charger stations in Yellowknife. This collaboration is the first step in the planned EV charging corridor between Yellowknife and the Alberta border.

Outlook:

“Our core utility and long-term contracted assets provide the stability needed to pursue our energy transition strategy, and our recent renewable generation acquisition marks a meaningful step forward in this journey. This strategy remains critical to the success of our business long term, and to society more broadly, as the push to decarbonize the global energy system continues to gain momentum.” 

– Executive Vice President and Chief Financial Officer, Brian Shkrobot

See the full Earnings Release here

 

TFI International (TFII-N)

“TFI International continued to perform throughout the quarter even as broader macro uncertainty spread, producing robust financial results including a 69% year-over-year increase in adjusted operating income despite non-recurring charges, and a 73% increase in free cash flow … Our ability to rapidly adjust capacity to match shifting demand is just one driver of the strong operating ratios reported today across our business segments.”

– Chief Executive Officer, Alain Bedard

Highlights:

  • Third quarter operating income of $318.4 million increased 66% from $191.6 million the same quarter last year, benefitting from contributions from acquisitions made over the past year and strong execution across the organization including an asset-light approach and cost reductions, and gain on the sale of business to Heartland of $75.7 million, offset by a non-recurring charge of $11.4 million charge reflecting the settlement of a legal claim in California in the Company’s Logistics segment.
  • Net income of $245.2 million increased 86% compared to $131.6 million in Q3 2021, including the aforementioned charges of $11.4 million in Q3 2022. Diluted earnings per share (diluted “EPS”) of $2.72 approximately doubled compared to $1.38 in Q3 2021.
  • Adjusted net income , a non-IFRS measure, of $181.2 million increased 30% compared to $138.9 million in Q3 2021, including the aforementioned charges of $11.4 million Q3 2022.
  • Adjusted diluted EPS , a non-IFRS measure, of $2.01 increased 38% compared to $1.46 in Q3 2021.
  • Net cash from operating activities of $337.8 million increased 60% compared to $211.2 million in Q3 2021.
  • Free cash flow , a non-IFRS measure, of $292.1 million increased 73% from $168.7 million in Q3 2021.
  • The Company’s reportable segments performed as follows:
    • Package and Courier operating income increased 42% to $33.9 million;
    • Less-Than-Truckload operating income increased 5% to $100.5 million;
    • Truckload operating income increased 73% to $96.6 million; and
  • Logistics operating income decreased 13% to $29.0 million due to the aforementioned charge of $11.4 million.
  • During the third quarter TFI International repurchased and cancelled 2,101,814 shares for $198.8 million.
  • On September 15, 2022, the Board of Directors of TFI declared a quarterly dividend of $0.27 per share, compared to the $0.23 per share dividend declared in Q3 2021, a 17% increase.
  • On October 27, 2022, the Board of Directors of TFI approved a $0.35 per share quarterly dividend, a 30% increase over the previous quarterly dividend of $0.27 per share, effective as of the next regular payment.
  • The Company has applied to the Toronto Stock Exchange to renew the normal course issuer bid (“NCIB”). If the renewal is approved, the Company will be allowed to repurchase for cancellation up to 6,370,000 common shares.
  • On September 1, 2022, the Company announced the completion of the sale of CFI’s Truckload, Temp Control and Mexican non-asset logistics business (herein referred to as “CFI” collectively) to Heartland Express, Inc. for $525 million, resulting in a gain on sale of business of $75.7 million. In addition to customary closing adjustments, Heartland Express paid TFI International an additional $24 million for TFI to retain pre-closing accident and workers’ compensation claims.
  • During the quarter, TFI International acquired Transport St-Amour, HO-RO Trucking Company, St-Michel Logistique, and LLL Transport and subsequent to quarter end completed the acquisition of Quevrac Ltee.

Outlook:

“North American economic growth has continued to slow due to a variety of factors including rising interest rates, higher inflation including elevated energy prices, labor shortages, continued global supply chain challenges, higher commodity prices and slower growth in most international markets. TFI

International’s diversity across industrial and consumer end markets and across many modes of transportation, along with the Company’s disciplined approach to operations, helped generate solid results during the third quarter. Nonetheless, macro uncertainty persists and an increasing number of economists see the possibility of economic recession ahead.

TFI International’s business has proven resilient in the face of recent macro challenges and management remains vigilant in its monitoring for new potential risks, including elevated energy prices, supply chain disruption, driver availability along with higher wages, and additional COVID-19 variants and the potential economic disruption they could cause. Factors such as these may cause additional rounds of declining freight volumes and higher costs, adversely affect TFI’s operating companies and the markets they serve. Additional uncertainties include but are not limited to geopolitical risk such as the ongoing war in Ukraine, policy changes surrounding international trade, environmental mandates and changes to the tax code in any jurisdictions in which TFI International operates.

Barring a more significant economic downturn, management believes the Company is well positioned for continued solid operational and financial performance due to its strong financial foundation and cash flow generation that allow for strategic investment in the business, its lean cost structure, and a longstanding focus on profitability, efficiency, network density, customer service, optimizing pricing, driver retention, and capacity rationalization. TFI continues to have material synergy opportunities related to the 2021 acquisition of TForce Freight, and the Company also has meaningful opportunities to enhance performance within most of its other operations. In addition, TFI’s diverse industrial exposure through specialized TL and LTL should continue to benefit from a shift toward domestic manufacturing as a result of reduced imports due to global supply chain issues. TFI is also well positioned to benefit over the long term from the expansion of e-commerce, which provides both growth and margin expansion opportunities for its P&C and Logistics business segments.

TFI International’s favorable positioning should enable continued solid results over the remainder of this year and into 2023 assuming no significant degradation in economic conditions. Longer term, regardless of the operating environment, management’s goal is to build shareholder value through consistent adherence to its operating principles, including customer focus, an asset-light approach, and continual efforts to enhance efficiencies. In addition, TFI International values free cash flow generation and strong liquidity with a conservative balance sheet that features a high portion of attractive fixed-rate spreads and limited near-term debt maturities. This strong financial footing allows the Company to prudently invest in the business and pursue select, accretive acquisitions while returning excess capital to shareholders.”

See the full Earnings Release here

 

Fortis Inc. (FTS-T)

“During the third quarter, our utilities delivered earnings growth in line with our expectations, and continued to execute capital investments consistent with plan. Our low-risk organic growth strategy remains a key fundamental during these volatile macroeconomic times.”

– President and Chief Executive Officer, David Hutchens

Highlights:

  • Third quarter net earnings of $326 million, or $0.68 per common share, up from $295 million, or $0.63 per common share in 2021
  • Adjusted third quarter net earnings per common share of $0.71, up from $0.64 in 2021
  • Invested capital expenditures2 of $2.9 billion through September; $4.0 billion annual capital plan on track
  • Released 2023-2027 capital plan of $22.3 billion, representing 6.2% rate base growth; no discrete equity funding required
  • Increased fourth quarter common share dividend by approximately 6%, marking 49 years of consecutive increases
  • Announced annual dividend growth guidance of 4-6%; guidance period extended through 2027

Outlook:

“Fortis continues to enhance shareholder value through the execution of its capital plan, the balance and strength of its diversified portfolio of utility businesses, and growth opportunities within and proximate to its service territories. While energy price volatility, global supply chain constraints and rising inflation are issues of potential concern that continue to evolve, the Corporation does not currently expect there to be a material impact on its operations or financial results in 2022.

Fortis is executing on the transition to a cleaner energy future and is on track to achieve its corporate-wide target to reduce greenhouse gas (“GHG”) emissions by 75% by 2035. Upon achieving this target, 99% of the Corporation’s assets will support energy delivery and renewable, carbon-free generation. The Corporation’s additional 2050 net-zero direct GHG emissions target reinforces Fortis’ commitment to decarbonize over the long-term, while preserving customer reliability and affordability.

The Corporation’s $22.3 billion five-year capital plan is expected to increase midyear rate base from $34.0 billion in 2022 to $46.1 billion by 2027, translating into a five-year compound annual growth rate of 6.2%.

Beyond the five-year capital plan, additional opportunities to expand and extend growth include: further expansion of the electric transmission grid in the United States to facilitate the interconnection of cleaner energy including infrastructure investments associated with the Inflation Reduction Act of 2022 and the MISO LRTP; climate adaptation and grid resiliency investments; renewable gas solutions as well as liquefied natural gas infrastructure in British Columbia; and the acceleration of cleaner energy infrastructure investments across our jurisdictions.

Fortis expects its long-term growth in rate base will drive earnings that support dividend growth and reduce the Corporation’s dividend payout ratio over time to be in line with historical levels. The dividend growth guidance of 4-6% annually through 2027 will also provide the flexibility to fund more capital with internally generated funds and is premised on the assumptions listed under “Forward-Looking Information”.”

See the full Earnings Release here

 

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 28, 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 6.4% $11.00 -23.3% $0.70 5.4% 11
ATD-T Alimentation Couche-Tard Inc. 0.7% $61.45 17.9% $0.44 18.1% 12
BCE-T Bell Canada 5.9% $61.88 -6.1% $3.64 4.0% 13
BIP-N Brookfield Infrastructure Partners 3.9% $36.51 -10.4% $1.44 5.9% 14
CCL-B-T CCL Industries 1.5% $66.13 -2.4% $0.96 14.3% 20
CNR-T Canadian National Railway 1.8% $162.04 4.6% $2.93 19.1% 26
CTC-A-T Canadian Tire 3.8% $153.80 -16.0% $5.85 24.5% 11
CU-T Canadian Utilities Limited 4.9% $36.03 -1.6% $1.78 1.0% 50
DOL-T Dollarama Inc. 0.3% $82.33 29.8% $0.22 9.2% 11
EMA-T Emera 5.2% $51.51 -17.7% $2.68 4.1% 15
ENB-T Enbridge Inc. 6.5% $53.13 7.2% $3.44 3.0% 26
ENGH-T Enghouse Systems Limited 2.4% $30.14 -34.3% $0.72 16.3% 15
FNV-N Franco Nevada 1.0% $124.76 -8.3% $1.28 10.3% 14
FTS-T Fortis 4.1% $52.97 -12.4% $2.17 4.3% 48
IFC-T Intact Financial 1.9% $207.08 26.5% $4.00 17.6% 17
L-T Loblaws 1.4% $113.91 10.9% $1.54 12.4% 10
MGA-N Magna 3.2% $56.14 -31.2% $1.80 4.7% 12
MRU-T Metro 1.5% $72.02 7.4% $1.10 12.2% 27
RY-T Royal Bank of Canada 3.9% $125.57 -8.2% $4.96 14.8% 11
SJ-T Stella-Jones Inc. 1.9% $42.00 3.2% $0.80 11.1% 17
STN-T Stantec Inc. 1.0% $67.94 -3.2% $0.71 6.8% 10
TD-T TD Bank 4.1% $87.71 -11.7% $3.56 12.7% 11
TFII-N TFI International 1.2% $88.81 -19.8% $1.08 12.5% 11
TIH-T Toromont Industries 1.5% $103.59 -8.9% $1.52 15.2% 32
TRP-T TC Energy Corp. 6.0% $59.52 -0.4% $3.57 4.4% 21
T-T Telus 4.6% $28.78 -3.3% $1.33 6.2% 18
WCN-N Waste Connections 0.7% $132.83 -0.9% $0.92 8.9% 12
Averages 3.0% -4.2% 10.3% 18

MP Market Review – October 21, 2022

Last updated by BM on October 24, 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 up a couple of percentage points with a minus -7.3% 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’.
  • Four 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

“I think a recession is most likely globally. And most probable in Canada,” Mr. Carney said. “I would put it this way. I’m afraid it’s a bit like air travel these days: We know where we’re headed, we just don’t know when we’re going to get there.”

– Mark Carney, former Governor of the Bank of Canada and England

Earnings season in Canada is now in full swing, with the majority of the companies on ‘The List’ due to report Q3 earnings over the next few weeks. If you scroll down to the bottom of ‘The List’ menu item, you will see our current table of reporting dates and earnings estimates. Knowing when a company reports gives you a heads up if you happen to wake up to a volatile price on one of your favourite companies.

Earning reports are part of our research when we get close to a ‘sensible price’ on our good dividend growers. After all, we want to make sure that management still feels confident in the business moving forward. Dividends are paid from earnings, so the ability to grow earnings is important in the companies we invest in.

The market tends to punish companies that don’t meet earnings estimates, so we take advantage of this sentiment if we believe that the company is only suffering a short-term setback. This can be difficult to determine, so you may have to drill down into company event presentations and updated guidance along with independent analyst reports for the answer.

This earnings season, we are particularly interested in the effect that higher interest rates and inflation will have on the fundamentals of the businesses we follow. Much of the downward trend in prices thus far has been due to elevated valuations coming into this year. Investors aren’t willing to pay for the valuations they placed on stocks a year ago with all the uncertainty. The next shoe to drop could be a pullback based on reduced earnings expectations.

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 up a couple of percentage points with a minus -7.3% 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 Waste Connections (WCN-N), up +4.75%; TC Energy Corp. (TRP-T), up +4.50%; and Magna (MGA-N), up +4.13%.

Emera (EMA-T) was the worst performer last week, down -2.27%.

Recent News

Market turbulence has claimed utilities as an unlikely victim. Maybe that’s good news (Globe & Mail)

For the last couple of years, many of our good dividend growers in the utility sector have been trading at elevated valuations. For the past 18 months, it seemed that there was no end in sight as to how high the prices would go. Investors tend to flock to defensive stocks like utilities when there is market uncertainty, and utilities were one of the top-performing sectors in 2022.

According to the author, the recent pullback is due to a couple of factors. First, the valuation of Canadian utility companies had become stretched, so a pullback was inevitable. Secondly, as interest rates rise, competition is created from alternative asset classes like fixed income.

Nonetheless, the author believes that utility companies will continue to prosper due to their regular dividend increases and the trend toward electrification, which should boost the sector’s growth profile.

Pain is good, and the beatings to the markets will continue until the FOMO stops (Globe & Mail)

“The continuing hope that too many investors hold out for old, higher, asset prices in lieu of a sober application of reasonable multiples, a fair discounted-cash-flow analysis, and a consideration of the overall economic outlook is simply misguided.”

In this article, the author warns that the ‘cheap money shuffle’ is over and to have patience when it comes to investing. Waiting for a reasonable, fair value instead of buying all the dips in the market is a safer path to follow.

Four companies on ‘The List’ are due to report earnings this week.  

Canadian National Railway (CNR-T) will release its third-quarter 2022 results on Tuesday, October 25, 2022, after markets close.

Canadian Utilities Limited (CU-T) will release its third-quarter 2022 results on Thursday, October 27, 2022, before markets open.

TFI International (TFII-N) will release its third-quarter 2022 results on Thursday, October 27, 2022, after markets close.

Fortis (FTS-T) will release its third-quarter 2022 results on Friday, October 28, 2022, before markets open.

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 21, 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 6.7% $10.45 -27.2% $0.70 5.4% 11
ATD-T Alimentation Couche-Tard Inc. 0.8% $58.19 11.7% $0.44 18.1% 12
BCE-T Bell Canada 6.2% $58.93 -10.6% $3.64 4.0% 13
BIP-N Brookfield Infrastructure Partners 4.3% $33.67 -17.3% $1.44 5.9% 14
CCL-B-T CCL Industries 1.4% $66.80 -1.5% $0.96 14.3% 20
CNR-T Canadian National Railway 1.9% $153.96 -0.6% $2.93 19.1% 26
CTC-A-T Canadian Tire 3.9% $149.31 -18.5% $5.85 24.5% 11
CU-T Canadian Utilities Limited 5.1% $34.57 -5.6% $1.78 1.0% 50
DOL-T Dollarama Inc. 0.3% $79.96 26.1% $0.22 9.2% 11
EMA-T Emera 5.2% $51.12 -18.3% $2.68 4.1% 15
ENB-T Enbridge Inc. 6.7% $51.67 4.3% $3.44 3.0% 26
ENGH-T Enghouse Systems Limited 2.5% $29.15 -36.4% $0.72 16.3% 15
FNV-N Franco Nevada 1.1% $119.70 -12.0% $1.28 10.3% 14
FTS-T Fortis 4.2% $51.26 -15.2% $2.17 4.3% 48
IFC-T Intact Financial 2.0% $195.21 19.2% $4.00 17.6% 17
L-T Loblaws 1.4% $111.12 8.2% $1.54 12.4% 10
MGA-N Magna 3.5% $50.89 -37.6% $1.80 4.7% 12
MRU-T Metro 1.6% $70.58 5.3% $1.10 12.2% 27
RY-T Royal Bank of Canada 4.0% $123.73 -9.6% $4.96 14.8% 11
SJ-T Stella-Jones Inc. 1.9% $41.46 1.9% $0.80 11.1% 17
STN-T Stantec Inc. 1.1% $63.57 -9.4% $0.71 6.8% 10
TD-T TD Bank 4.1% $86.26 -13.2% $3.56 12.7% 11
TFII-N TFI International 1.2% $91.24 -17.6% $1.08 12.5% 11
TIH-T Toromont Industries 1.5% $98.37 -13.5% $1.52 15.2% 32
TRP-T TC Energy Corp. 6.1% $58.73 -1.7% $3.57 4.4% 21
T-T Telus 4.8% $27.86 -6.4% $1.33 6.2% 18
WCN-N Waste Connections 0.7% $130.45 -2.7% $0.92 8.9% 12
Averages 3.1% -7.3% 10.3% 18

MP Market Review – October 14, 2022

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

MP Market Review – October 07, 2022

Last updated by BM on October 10, 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 -8.6% YTD price return (capital). The dividend growth of ‘The List’ is 10.3% YTD, demonstrating the rise in income over the last year.
  • Last week, (actually the week before) there was one dividend increase from a company 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

“My rule — and it’s good only about 99% of the time, so I have to be careful here — when these crises come along, the best rule you can possibly follow is not “Don’t stand there, do something,” but “Don’t do something, stand there!”

– Jack Bogle

Jack Bogle was an avid investor who preached investment over speculation, long-term patience over short-term action and reducing broker fees as much as possible. He later went on to be the founder and CEO of The Vanguard Group in the United States.

We quote Bogle quite a bit on our blog because we like his teachings and especially his formula for estimating future market returns.

Future Market Returns = Dividend Yield + Earnings Growth +/- Change in P/E Ratio

The formula works very well for the stable dividend growth companies we follow. We interchange ‘Earnings Growth’ with ‘Dividend Growth’ as most of our companies tend to raise their dividends in line with earnings.

In our MP Market Review – August 5, 2022, we cautioned readers about being ‘sucked in’ too soon given today’s macro conditions. It appears we were right on that call as markets soon reversed and revisited or surpassed their June lows after a bounce in July/August.

On the positive side, we are finding many more of our quality dividend growers entering their investable ‘valuation corridors’. Protecting our hard-earned capital is a priority for us so in the short run, we will follow Bogle’s advice… “Don’t do something, stand there.”

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 -8.6% YTD price return (capital). The dividend growth of ‘The List’ is now 10.3% YTD, demonstrating the rise in income over the last year.

The best performers last week on ‘The List’ were Stella-Jones Inc. (SJ-T), up +4.44%; TFI International (TFII-N), up +4.18%; and Stantec Inc. (STN-T), up +3.73%.

CCL Industries (CCL-B) was the worst performer last week, down -4.94%.

Recent News

This stock market isn’t pivoting away from raising interest rates any time soon (Globe & Mail)

Much of the narrative near the end of the summer was that central banks were going to pivot from raising interest rates so aggressively. This article discusses why that isn’t in the cards just yet and to let up prematurely could have worse effects on our economy. They cite the 1970s as an example.

Overall, North American central bankers all agree that the fight to rein in inflation has a long way to go which is not good news for stock markets.

“The U.S. government publishes its next consumer price index report on Thursday. Statistics Canada releases its next CPI readings on Oct. 19. Investors have to hope the numbers show inflation is receding. If not, that pivot could be a long time coming.”

Loblaw’s driverless trucks signal the beginning of a new age (Globe & Mail)

The pandemic has changed the way a lot of businesses operate and the shortage of labour has caused companies to think about how to protect and manage their labour force.

Loblaws (L-T) has been testing driverless trucks with a ‘safety driver’ and has now rolled out the first driverless delivery trucks in Canada.

Good companies constantly reinvent themselves and find new ways to grow their earnings. It is innovations like this that will make our good dividend growers more competitive and profitable for many years to come.

No companies on ‘The List’ are due to report earnings this week.

Dividend Increases

One company on ‘The List’ announced a dividend increase that we missed the week before.

Emera (EMA-T) on Thursday, September 22, said it increased its 2022 quarterly dividend from $0.6625 to $0.69 per share, payable November 15, 2022, to shareholders of record on November 01, 2022.

This represents a dividend increase of +4.0%, marking the 16th straight year of dividend growth for this quality utility.

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 07, 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 6.6% $10.72 -25.3% $0.70 5.4% 11
ATD-T Alimentation Couche-Tard Inc. 0.8% $55.78 7.1% $0.44 18.1% 12
BCE-T Bell Canada 6.3% $57.70 -12.5% $3.64 4.0% 13
BIP-N Brookfield Infrastructure Partners 4.2% $34.43 -15.5% $1.44 5.9% 14
CCL-B-T CCL Industries 1.5% $63.65 -6.1% $0.96 14.3% 20
CNR-T Canadian National Railway 1.9% $150.85 -2.6% $2.93 19.1% 26
CTC-A-T Canadian Tire 4.0% $148.04 -19.2% $5.85 24.5% 11
CU-T Canadian Utilities Limited 5.1% $34.65 -5.4% $1.78 1.0% 50
DOL-T Dollarama Inc. 0.3% $81.27 28.2% $0.22 9.2% 11
EMA-T Emera 5.0% $53.51 -14.5% $2.68 4.1% 15
ENB-T Enbridge Inc. 6.8% $50.88 2.7% $3.44 3.0% 26
ENGH-T Enghouse Systems Limited 2.5% $28.64 -37.5% $0.72 16.3% 15
FNV-N Franco Nevada 1.1% $120.16 -11.7% $1.28 10.3% 14
FTS-T Fortis 4.3% $50.80 -16.0% $2.17 4.3% 48
IFC-T Intact Financial 2.1% $190.98 16.7% $4.00 17.6% 17
L-T Loblaws 1.4% $107.67 4.8% $1.54 12.4% 10
MGA-N Magna 3.7% $48.39 -40.7% $1.80 4.7% 12
MRU-T Metro 1.6% $67.58 0.8% $1.10 12.2% 27
RY-T Royal Bank of Canada 4.1% $121.01 -11.6% $4.96 14.8% 11
SJ-T Stella-Jones Inc. 2.0% $40.50 -0.4% $0.80 11.1% 17
STN-T Stantec Inc. 1.1% $62.84 -10.5% $0.71 6.8% 10
TD-T TD Bank 4.3% $82.24 -17.2% $3.56 12.7% 11
TFII-N TFI International 1.1% $94.26 -14.9% $1.08 12.5% 11
TIH-T Toromont Industries 1.6% $97.49 -14.2% $1.52 15.2% 32
TRP-T TC Energy Corp. 6.3% $56.59 -5.3% $3.57 4.4% 21
T-T Telus 4.8% $27.49 -7.6% $1.33 6.2% 18
WCN-N Waste Connections 0.7% $129.97 -3.1% $0.92 8.9% 12
Averages 3.2% -8.6% 10.3% 18

MP Market Review – September 30, 2022

Last updated by BM on October 03, 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 with a minus -8.0% YTD price return (capital). Dividend growth of ‘The List’ went up on Fortis’ dividend increase announcement. The YTD dividend growth percentage of ‘The List’ is now at +10.3% YTD, demonstrating our rise in income over the last fiscal year.
  • One company on ‘The List’ announced a dividend increase last week. Fortis (FTS-T) announced a 5.6% dividend increase. It’s 49th consecutive yearly dividend increase!
  • 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

 “As a dividend increase is a positive sign of a company’s financial strength, the safest purchase, after research, is a stock with a recent dividend increase.”

 – Tom Connolly

Fortis Inc. announced last week that it is raising its dividend for the 49th consecutive year.

A growing dividend is the single most crucial factor in our strategy, so naturally, we pay close attention to dividend increases. Another factor that makes Fortis Inc. such a quality dividend growth stock is its dividend growth/price growth alignment over long periods. The two rarely get far apart, and the valuation corridor that Fortis trades in is one of the narrowest you will find. All these things make Fortis Inc. one of the safest dividend growth stocks to hold in your portfolio.

If a good starting yield of ~4% plus a reasonable dividend growth rate of ~6% doesn’t catch your eye, how about Fortis’ historical total returns?

Fortis’ future returns have also tended to follow our Yield + Growth formula with a ~10% annualized return over the last ten years. Check out those 20-year returns too! Not too shabby for a boring utility stock that very few people have even heard of let alone invested in.

One of the things we like most about our income investing strategy is the predictability of dividends from our quality dividend growers. We have a much higher probability of success forecasting Fortis’ dividend next year than we do its price. Knowing we have dividend growth in our portfolios helps us weather any kind of storm the markets send our way as we know that price growth will eventually follow.

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 a bit more with a minus -8.0% YTD price return (capital). Dividend growth of ‘The List’ went up on Fortis’ dividend increase announcement. The YTD dividend growth % of ‘The List’ is now at +10.3% YTD, demonstrating the rise in income over the last fiscal year.

The best performers last week on ‘The List’ were Franco Nevada (FNV-N), up +4.69%; Dollarama Inc. (DOL-T), up +3.63%; and Stella-Jones Inc. (SJ-T), up +2.46%.

Alimentation Couche-Tard Inc. (ATD-T) was the worst performer last week, down -9.88%.

Recent News

My dividend portfolio’s five-year returns are in and they validate the dividend-growth investing strategy (Globe & Mail)

It is always nice to see the mainstream media cover similar strategies to ours, and John Heinzls Yield Hog Dividend Growth Portfolio is one that we glance at from time to time. Mr. Heinzl is a believer in the dividend growth strategy, but in our opinion, his application is a little off.

In his previous version of implementing a dividend growth model portfolio (Strategy Lab; 2012-17), Mr. Heinzl did much better than his current version (Yield Hog Dividend Growth Portfolio; 2017-2022). Annualized returns for the Strategy Lab portfolio were 11.6% and the Yield Hog Dividend Growth Portfolio was 7.4%.

Perhaps the inclusion of a couple of US-based companies helped (JNJ and PG) with his initial portfolio or maybe he was lucky with his timing on purchases. In both versions, however, his REIT investments held both his income and capital growth back. Most REITs do not grow their distributions as much or as consistently as quality dividend growth stocks and often freeze or cut them when the real estate cycle turns.

Mr. Heinzl would do better to focus on better selection criteria for the companies he invests in and adhere to sound valuation measures when purchasing if he is to have better success at dividend growth investing. We wonder if he will continue adding REITs to his model dividend growth portfolios going forward after two bad experiences.

Dividend Yield Comes Back To Life; Rising Interest Rates And Poor Equity Returns Resurrect An “Old Timer” Strategy (CIBC Equity Research)

We were fortunate enough to review a research report put together by analysts at CIBC World Markets last week that stresses the importance that dividends will play in a rising rate environment, in the years ahead.

One of the authors, Ian de Verteuil, was kind enough to allow us to publish some of the report’s conclusions.

Here are some of his findings:

“Dividend yield has been one of the more powerful Quantitative Factors since the trough in U.S. 10-year rates in August 2020. This fits with our fundamental work which argues for stocks with high and stable dividends, despite rising interest rates. Outperformance by stocks is akin to the 1970s when dividends represented well over half (and as much as 70%) of annual equity returns.

In the current environment when fiscal and monetary policy seems at odds with one another, equity investors should insist on being compensated with higher running yields, underpinned by stable businesses.”

Mr. de Verteuil also believes that the recent lack of focus on dividends in the pursuit of solid price returns is a perspective that needs to change.

No companies on ‘The List’ are due to report earnings this week.

Dividend Increases

One company on ‘The List’ announced a dividend increase last week.

Fortis Inc. (FTS-T) on Thursday said it increased its 2022 quarterly dividend from $0.535 to $0.565 per share, payable December 1, 2022, to shareholders of record on November 17, 2022.

This represents a dividend increase of +5.6%, marking the 49th straight year of dividend growth for this quality utility holding company.

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 September 30, 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 6.4% $10.91 -24.0% $0.70 5.4% 11
ATD-T Alimentation Couche-Tard Inc. 0.8% $55.61 6.7% $0.44 18.1% 12
BCE-T Bell Canada 6.3% $57.92 -12.1% $3.64 4.0% 13
BIP-N Brookfield Infrastructure Partners 4.0% $35.90 -11.9% $1.44 5.9% 14
CCL-B-T CCL Industries 1.4% $66.96 -1.2% $0.96 14.3% 20
CNR-T Canadian National Railway 2.0% $149.18 -3.7% $2.93 19.1% 26
CTC-A-T Canadian Tire 4.0% $147.05 -19.7% $5.85 24.5% 11
CU-T Canadian Utilities Limited 4.9% $35.93 -1.9% $1.78 1.0% 50
DOL-T Dollarama Inc. 0.3% $79.30 25.1% $0.22 9.2% 11
EMA-T Emera 4.7% $55.89 -10.7% $2.65 2.9% 15
ENB-T Enbridge Inc. 6.7% $51.22 3.4% $3.44 3.0% 26
ENGH-T Enghouse Systems Limited 2.5% $29.00 -36.8% $0.72 16.3% 15
FNV-N Franco Nevada 1.1% $119.48 -12.2% $1.28 10.3% 14
FTS-T Fortis 4.1% $52.48 -13.2% $2.17 4.3% 48
IFC-T Intact Financial 2.0% $195.49 19.4% $4.00 17.6% 17
L-T Loblaws 1.4% $109.38 6.5% $1.54 12.4% 10
MGA-N Magna 3.8% $47.42 -41.9% $1.80 4.7% 12
MRU-T Metro 1.6% $69.17 3.2% $1.10 12.2% 27
RY-T Royal Bank of Canada 4.0% $124.37 -9.1% $4.96 14.8% 11
SJ-T Stella-Jones Inc. 2.1% $38.78 -4.7% $0.80 11.1% 17
STN-T Stantec Inc. 1.2% $60.58 -13.7% $0.71 6.8% 10
TD-T TD Bank 4.2% $84.72 -14.7% $3.56 12.7% 11
TFII-N TFI International 1.2% $90.48 -18.3% $1.08 12.5% 11
TIH-T Toromont Industries 1.6% $96.16 -15.4% $1.52 15.2% 32
TRP-T TC Energy Corp. 6.4% $55.64 -6.8% $3.57 4.4% 21
T-T Telus 4.9% $27.43 -7.8% $1.33 6.2% 18
WCN-N Waste Connections 0.7% $135.13 0.8% $0.92 8.9% 12
Averages 3.1% -8.0% 10.3% 18

MP Market Review – September 23, 2022

Last updated by BM on September 26, 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 sharply with a minus -6.0% YTD price return (capital). Dividend growth of ‘The List’ remains at +10.2% 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

 “Fortunes are made by buying right and holding on.”

 – Tom Phelps

Last week in the markets was difficult to watch as many of the indexes plummeted further as the reality of an upcoming recession has finally sunk in. The TSX Composite Index finally went below -10% for the first time this year.

Although it is difficult to look for optimism, we need to remember that as dividend growth investors we do things a bit differently. We see volatile markets as opportunities to either prune or add to our positions. In the case of a downward trending market, we look to buy more income when our quality companies go on sale.

In the ‘Recent News’ section of this week’s review, there is a good article on dividend investing in uncertain times. Although our historical returns are similar, we are much less active than the ‘Stable Dividend portfolio’ strategy. It is interesting to note that many of our companies on ‘The List’ have found their way into Mr. Rothery’s portfolio currently.

One of the charts we like in the article is the chart that displays the volatility of the ‘Stable Dividend Portfolio’ versus the index.

This data seems to support our own experience with ‘The List’ as our YTD capital returns are down much less than the decline in the TSX Composite index.

Saying you are down only half as much as the index is not that comforting to most retirees, but it at least means that the climb back up will be shorter. Our growing yields seem to act as a floor for declining prices. In addition, we still have our growing dividend income to cover our expenses and have fun with, until things turn around.

In the case of our model portfolio, we believe our patience will pay off very soon and we can enjoy even more of our newfound income when we start or add to our positions at ‘sensible prices’.

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 sharply with a minus -6.0% YTD price return (capital). Dividend growth of ‘The List’ remains at +10.2% YTD, demonstrating the rise in income over the last year.

The best performers last week on ‘The List’ were all negative. Dollarama Inc. (DOL-T), down -0.30%; Emera (EMA-T), down -0.92%; and CCL Industries (CCL-B-T), down -1.05%.

Magna (MGA-N) was the worst performer last week, down -8,68%.

Recent News

How the Stable Dividend portfolio fares in uncertain times (Globe & Mail)

“That brings me to the Stable Dividend portfolio. It picks 20 stocks from the dividend-paying portfolio that were the least volatile over the preceding 260 days. That is, their prices varied the least compared to other dividend stocks in recent months. The hope is that they’ll continue to offer a relatively smooth ride in the future.”

The strategy puts an equal amount of money in each of the 20 stocks and is rebalanced monthly. The portfolio has had an average 14.5% annual return over the last twenty years. If you chose to rebalance the portfolio only once a year, the return is still very good (13.6% annualized return).

Although the criteria are different from ours (recent volatility vs growing dividends) it is interesting to notice that about 50% of the stocks on ‘The List’ and on the ‘Stable Dividend’ portfolio are currently the same.

We like our more passive approach better as our capital grows at about the same rate, our income continues to compound and we pay fewer taxes along the way.

The terrifying – and highly profitable – journey of a bank stock (Globe & Mail)

“The purpose of this exercise is to demonstrate that, when you own an excellent company, you are much better off holding the shares through thick and thin than trying to trade your way through the market’s gyrations. I don’t know anyone who can do that reliably, but I know plenty of people who try.”

In this article, the author walks you through the ride of the share price of Canada’s largest bank over the last twenty years. Although there have been a few recessions, and dividend freezes (no cuts) the capital return easily beats the index.

“Royal Bank’s total return over that time, including dividends, was 12.45 per cent on an annualized basis. To put that into dollars, your initial $10,000 investment would have grown to $104,618 – a gain of 946 per cent – before tax.”

Imagine your returns if you had pruned a little at the top and bought a little back after each dividend freeze. I wonder how much our income would have grown during the same time period?

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 September 23, 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 5.6% $12.49 -13.0% $0.70 5.4% 11
ATD-T Alimentation Couche-Tard Inc. 0.8% $54.53 4.7% $0.44 18.1% 12
BCE-T Bell Canada 5.9% $61.45 -6.8% $3.64 4.0% 13
BIP-N Brookfield Infrastructure Partners 3.6% $39.61 -2.7% $1.44 5.9% 14
CCL-B-T CCL Industries 1.5% $65.11 -4.0% $0.96 14.3% 20
CNR-T Canadian National Railway 1.9% $150.97 -2.5% $2.93 19.1% 26
CTC-A-T Canadian Tire 3.9% $149.92 -18.2% $5.85 24.5% 11
CU-T Canadian Utilities Limited 4.5% $39.45 7.8% $1.78 1.0% 50
DOL-T Dollarama Inc. 0.3% $76.52 20.7% $0.22 9.2% 11
EMA-T Emera 4.4% $60.48 -3.4% $2.65 2.9% 15
ENB-T Enbridge Inc. 6.7% $51.64 4.2% $3.44 3.0% 26
ENGH-T Enghouse Systems Limited 2.5% $28.53 -37.8% $0.72 16.3% 15
FNV-N Franco Nevada 1.1% $114.13 -16.1% $1.28 10.3% 14
FTS-T Fortis 3.8% $56.19 -7.1% $2.14 2.9% 48
IFC-T Intact Financial 2.0% $197.32 20.5% $4.00 17.6% 17
L-T Loblaws 1.4% $111.98 9.0% $1.54 12.4% 10
MGA-N Magna 3.6% $50.11 -38.6% $1.80 4.7% 12
MRU-T Metro 1.6% $69.84 4.2% $1.10 12.2% 27
RY-T Royal Bank of Canada 4.0% $123.40 -9.8% $4.96 14.8% 11
SJ-T Stella-Jones Inc. 2.1% $37.85 -7.0% $0.80 11.1% 17
STN-T Stantec Inc. 1.2% $59.42 -15.3% $0.71 6.8% 10
TD-T TD Bank 4.2% $84.37 -15.1% $3.56 12.7% 11
TFII-N TFI International 1.2% $91.00 -17.8% $1.08 12.5% 11
TIH-T Toromont Industries 1.6% $95.56 -15.9% $1.52 15.2% 32
TRP-T TC Energy Corp. 6.0% $59.21 -0.9% $3.57 4.4% 21
T-T Telus 4.7% $28.38 -4.6% $1.33 6.2% 18
WCN-N Waste Connections 0.7% $139.72 4.2% $0.92 8.9% 12
Averages 3.0% -6.0% 10.2% 18

MP Market Review – September 16, 2022

Last updated by BM on September 19, 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 -2.6% YTD price return (capital). Dividend growth of ‘The List’ remains at +10.2% 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

“Dividend growth investing (DGI) is not a way to “get rich quickly”, but it is a way to produce a safe, reliable, dependable, rising stream of cash to help pay for your retirement, without ever selling a single share.”

– Robert Allan Schwartz, Seeking Alpha Contributor

The markets continue to be volatile and trend downwards. Try not to focus on the narratives in the news and follow the process. This DGI anecdote should help.

When reading the article in the Globe & Mail on three dividend growth stocks to hold forever, I couldn’t help but comment on our own experience with dividend growth investing over the last ten years.

As dividend growth investors, we like to invest in high-quality companies with enduring competitive advantages, long operating histories, shareholder-aligned management, and large markets that provide opportunities for long-term growth. These businesses maintain reasonable payout ratios, generate consistent free cash flow, and have healthy balance sheets, providing a sturdy foundation for consistent dividend increases.

Like the article, we agree that Fortis is one of the highest quality dividend growth stocks in Canada with a dividend growth streak of 48 years, Fortis (FTS) has increased its dividend every year now for almost five decades.

To demonstrate how dividend growth investing works for a portfolio of dividend growth stocks, let’s look at some data from our Magic Pants Wealth-Builder Portfolio (CDN) portfolio back in 2012 and compare it to today.

Our initial four stock portfolio in 2012:

There is a lot of significant data to grasp from a small chart like this. Our portfolio yield now (Growth YLD) is 6.55%. That is how much we earn today from dividends alone on the money we invested in 2012. Our dividend growth and price growth are aligned at 96% and 101%. This means that both our income and capital have doubled in the last decade. It doesn’t stop there either as dividend growth will more than likely continue and drive our capital growth even higher.

As our timeline progresses, our holdings get safer and safer and throw off even more cash. Our risk becomes negligible as our margin of safety grows with our yield. My mentor, Tom Connolly, has a word for stocks that perform like these; ‘bondified’. After a decade or two, maybe sooner, these stocks offer an attractive alternative to fixed income instruments such as government bonds and can be counted as the fixed income portion of your portfolio.

With decade-long returns like this and some of our quality dividend growers now paying higher yields (due to recent price declines) than they did in 2012, we will soon be buying more of these wealth-building machines and not fretting so much about what is in the news.

If a DGI strategy interests you, please subscribe to our Magic Pants DGI Premium Membership, and you can learn how to build a robust dividend growth portfolio of your own.

We provide real-time trade alerts. So, you won’t miss any of the action!

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 -2.6% YTD price return (capital). Dividend growth of ‘The List’ remains at +10.2% YTD, demonstrating the rise in income over the last year.

The best performers last week on ‘The List’ were Enghouse Systems Limited (ENGH-T), up +0.91%; Intact Financial (IFC-T), up +0.72%; and Enbridge Inc. (ENB-T), down -0.09%.

TFI International (TFII-N) was the worst performer last week, down -9.26%.

Recent News

Surprise jump in U.S. inflation sends stock markets tumbling (Globe & Mail)

More bad news on the inflation front this past week. We would hardly call the data a ‘surprise’ though. Have you filled up your car with gasoline, bought groceries, went out for dinner or paid rent lately?  It seems everything continues to become more expensive.

“This means the Fed and other central banks will likely turn even more aggressive in their determination to wrestle inflation back to about 2 per cent, even if they hurt economic activity.”

When economic activity is hurt, economies go into recession. The Canadian economy is not immune to central bank actions. We still have a long way to go in our own ‘quantitative tightening’ (QT) process.

Three dividend growth stocks to hold forever (Globe & Mail)

The three stocks mentioned in the article are worthy candidates (FTS-T, BIP-N and TD-T). They are however just a small subset of the companies on ‘the List’ we publish and follow each week.

There are some terrific quotes in the article we believe are important to remember.

“One of the biggest investing myths is that you have to put in a lot of work to achieve great results. Without exhaustive research and a knack for savvy trading, you’ll never build lasting wealth and achieve financial independence, or so many investors believe. Nonsense.”

“Many investors know that the buy-and-hold approach makes sense, in theory. Yet they can’t resist the urge to make changes to their portfolios. When a stock rises, they sell to lock in their profit. When a stock tanks, they take their lumps and move on to the next shiny object. The underlying assumption is that they must trade to win at investing. This notion is reinforced by financial websites and ads for discount brokers that feature the latest whiz-bang trading tools.”

“But if you own great companies, the best approach is to do nothing. Stock prices always bounce around in the short run, but over the long run excellent businesses will reward you with capital appreciation and rising dividends.”

As dividend growth investors we believe in purchasing only the highest quality companies and rarely sell. Our strategy is not about trading. We focus on the rising cash flow and the capital appreciation that will follow.

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 September 16, 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 5.3% $13.20 -8.0% $0.70 5.4% 11
ATD-T Alimentation Couche-Tard Inc. 0.7% $59.08 13.4% $0.44 18.1% 12
BCE-T Bell Canada 5.8% $62.29 -5.5% $3.64 4.0% 13
BIP-N Brookfield Infrastructure Partners 3.6% $40.55 -0.4% $1.44 5.9% 14
CCL-B-T CCL Industries 1.5% $65.80 -2.9% $0.96 14.3% 20
CNR-T Canadian National Railway 1.9% $154.61 -0.2% $2.93 19.1% 26
CTC-A-T Canadian Tire 3.7% $157.76 -13.9% $5.85 24.5% 11
CU-T Canadian Utilities Limited 4.4% $40.43 10.4% $1.78 1.0% 50
DOL-T Dollarama Inc. 0.3% $76.75 21.0% $0.22 9.2% 11
EMA-T Emera 4.3% $61.04 -2.5% $2.65 2.9% 15
ENB-T Enbridge Inc. 6.3% $54.42 9.9% $3.44 3.0% 26
ENGH-T Enghouse Systems Limited 2.4% $29.88 -34.8% $0.72 16.3% 15
FNV-N Franco Nevada 1.1% $118.21 -13.1% $1.28 10.3% 14
FTS-T Fortis 3.8% $56.85 -6.0% $2.14 2.9% 48
IFC-T Intact Financial 2.0% $202.66 23.8% $4.00 17.6% 17
L-T Loblaws 1.4% $113.80 10.8% $1.54 12.4% 10
MGA-N Magna 3.3% $54.87 -32.7% $1.80 4.7% 12
MRU-T Metro 1.5% $71.28 6.3% $1.10 12.2% 27
RY-T Royal Bank of Canada 3.9% $126.45 -7.6% $4.96 14.8% 11
SJ-T Stella-Jones Inc. 2.0% $40.97 0.7% $0.80 11.1% 17
STN-T Stantec Inc. 1.1% $62.42 -11.1% $0.71 6.8% 10
TD-T TD Bank 4.0% $87.93 -11.5% $3.56 12.7% 11
TFII-N TFI International 1.1% $94.91 -14.3% $1.08 12.5% 11
TIH-T Toromont Industries 1.5% $101.02 -11.1% $1.52 15.2% 32
TRP-T TC Energy Corp. 5.7% $62.39 4.5% $3.57 4.4% 21
T-T Telus 4.6% $28.77 -3.3% $1.33 6.2% 18
WCN-N Waste Connections 0.6% $144.81 8.0% $0.92 8.9% 12
Averages 2.9% -2.6% 10.2% 18

MP Market Review – September 09, 2022

Last updated by BM on September 12, 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 up a with a minus -0.2% YTD price return (capital). Dividend growth of ‘The List’ remains at +10.2% 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 two 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

“To make money in stocks, you need to have the vision to see them, the courage to buy them and the patience to hold them. Patience is the rarest of the three.”

– George F. Bakers

We talked a lot about patience earlier in the year when the Central Banks began their quantitative tightening into a slowing economy. So far, we seem to have been correct. Markets continue their downward trend.

In the quote above, Mr. Bakers talks about the “ …patience to hold them”, in reference to stocks. We agree. Even when markets are heading south, holding onto your good dividend growers is key to our success. The time to trim a position was late last year, not when markets are down.

If a DGI strategy interests you, please subscribe to our Magic Pants DGI Premium Membership, and you can learn how to build a robust dividend growth portfolio of your own.

We provide real-time trade alerts. So, you won’t miss any of the action!

Performance of ‘The List’

Last week, ‘The List’ was up with a minus -0.2% YTD price return (capital). Dividend growth of ‘The List’ remains at +10.2% YTD, demonstrating the rise in income over the last year.

The best performers last week on ‘The List’ were CCL Industries (CCL-T), up +6.91%; Intact Financial (IFC-T), up +5.15%; and Waste Connections (WCN-N), up +4.16%.

Enghouse Systems Limited (ENGH-T) was the worst performer last week, down -7.67%.

Recent News

Bullish on Alimentation Couche-Tard Inc. (Globe & Mail)

“Behaviour indicators including the rising 40wMA and the rising trend line confirm the bullish status. There is good support near $54-55; only a sustained decline below $52-53 would be negative.

Point & Figure measurements provide targets of $64 and $69. Higher targets are visible.”

We see articles about ‘bullish’ sentiment in the market almost every day. It makes you wonder who to believe. A process to help determine a sensible price helps decipher the narratives.

ATD-T is one of our quality dividend growers, so we pay attention. The company is still slightly overvalued based on historical fundamentals. We are being patient on this one.

Canada’s jobless rate jumps to 5.4% as hiring falls for third consecutive month (Globe & Mail)

“Canada has now seen three consecutive months of job losses, something that hasn’t historically happened outside of a recession,” said Royce Mendes, head of macro strategy at Desjardins Securities, in a note to clients. “The deterioration in the job market appears to be occurring faster than anticipated.”

The signs are all there. Canada is headed for a recession. How deep and how long are yet to be determined. Are your investments ready?

A dividend growth strategy is one way to protect both your capital and income during recessions.

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

Enghouse Systems Limited (ENGH-T) and Dollarama Inc. (DOL-T) released earnings last week. ENGH-T with its third-quarter 2022 results and DOL-T with its second-quarter 2023 results. Let’s start with Enghouse Systems.

Enghouse Systems Limited (ENGH-T)

“Revenue for the third quarter of 2022 was $102.1 million with results from operating activities of $29.8 million and cash flows from operating activities, excluding changes in working capital of $34.1 million. As a result, we closed the quarter with $229.5 million in cash, cash equivalents, and short-term investments with no external debt. This was accomplished while completing two acquisitions for $6.1 million, paying quarterly dividends of $10.3 million and repurchasing $9.0 million of common stock from shareholders. We remain focused on operating a profitable, cash-flow-positive business generating the necessary capital to fund our acquisition strategy without the need for financing.”

–Stephen J. Sadler Chairman of the Board and Chief Executive Officer

Highlights:

Financial and operational highlights for the three and nine months ended July 31, 2022 compared to the three and nine months ended July 31, 2021 are as follows:

  • Revenue achieved was $102.1 and $319.5 million, respectively, compared to revenue of $117.6 and $354.1 million;
  • Results from operating activities was $29.8 and $96.5 million, respectively, compared to $38.5 and $116.1 million; • Net income was $18.1 and $57.5 million, respectively, compared to $21.2 and $62.6 million;
  • Adjusted EBITDA was $32.5 and $104.8 million, respectively, compared to $41.7 and $126.4 million;
  • Cash flows from operating activities excluding changes in working capital was $34.1 and $107.3 million, respectively, compared to $41.1 and $125.4 million.

Outlook:

“Enghouse completed two acquisitions late in the quarter, purchasing Competella AB on June 23, 2022 and NTW Software GmbH on July 6, 2022. Competella AB offers a complete contact center platform focused on the Scandinavian and Swiss markets with both a SaaS and on-premise solution. NTW Software GmbH provides an attendant console and contact center offering for organizations that have adopted the Cisco communications platform. Both acquisitions augment our contact center offerings and broaden our cloud hosted solutions portfolio. We believe that acquisition valuations are becoming more favourable in this environment as rising interest rates increases debt servicing costs and reduces profitability for many companies in the technology segment.”

See the full Earnings Release here

 

Dollarama (DOL-T)

“Our strong performance in the first half of Fiscal 2023 reflects a sustained consumer response to our unique value proposition, especially for everyday essentials, as Canadians from all walks of life adapt to a high-inflation environment. As a result, we are increasing our assumption for annual comparable store sales growth to between 6.5% and 7.5%,” said Neil Rossy, President and CEO.

Highlights:

  • Sales increased by 18.2% to $1,217.1 million
  • Comparable store sales increased by 13.2%
  • EBITDA increased by 25.8% to $369.4 million, or 30.4% of sales, compared to 28.5% of sales
  • Operating income increased by 30.3% to $287.4 million, or 23.6% of sales, compared to 21.4% of sales
  • Diluted net earnings per common share increased by 37.5% to $0.66 from $0.48
  • 13 net new stores opened, compared to 13 net new stores
  • 3,690,894 common shares repurchased for cancellation for $274.9 million

Outlook:

“As we strive to provide Canadians with a wide variety of merchandise, I am pleased with our progress rebuilding our inventory, thereby ensuring that our conveniently located stores are well-stocked for our customers ahead of key seasons in the second half of the fiscal year,” Mr. Rossy added.

See the full Earnings Release here

 

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 September 09, 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 5.1% $13.77 -4.0% $0.70 5.4% 11
ATD-T Alimentation Couche-Tard Inc. 0.7% $59.42 14.0% $0.44 18.1% 12
BCE-T Bell Canada 5.7% $63.71 -3.3% $3.64 4.0% 13
BIP-N Brookfield Infrastructure Partners 3.4% $42.25 3.7% $1.44 5.9% 14
CCL-B-T CCL Industries 1.4% $69.04 1.8% $0.96 14.3% 20
CNR-T Canadian National Railway 1.8% $158.88 2.6% $2.93 19.1% 26
CTC-A-T Canadian Tire 3.6% $160.51 -12.4% $5.85 24.5% 11
CU-T Canadian Utilities Limited 4.3% $41.02 12.0% $1.78 1.0% 50
DOL-T Dollarama Inc. 0.3% $80.59 27.1% $0.22 9.2% 11
EMA-T Emera 4.2% $62.48 -0.2% $2.65 2.9% 15
ENB-T Enbridge Inc. 6.3% $54.47 10.0% $3.44 3.0% 26
ENGH-T Enghouse Systems Limited 2.4% $29.61 -35.4% $0.72 16.3% 15
FNV-N Franco Nevada 1.0% $125.97 -7.4% $1.28 10.3% 14
FTS-T Fortis 3.7% $58.44 -3.4% $2.14 2.9% 48
IFC-T Intact Financial 2.0% $201.21 22.9% $4.00 17.6% 17
L-T Loblaws 1.3% $117.46 14.3% $1.54 12.4% 10
MGA-N Magna 3.1% $57.99 -28.9% $1.80 4.7% 12
MRU-T Metro 1.5% $72.18 7.7% $1.10 12.2% 27
RY-T Royal Bank of Canada 3.9% $127.68 -6.7% $4.96 14.8% 11
SJ-T Stella-Jones Inc. 1.9% $41.20 1.3% $0.80 11.1% 17
STN-T Stantec Inc. 1.1% $63.93 -8.9% $0.71 6.8% 10
TD-T TD Bank 4.0% $88.07 -11.4% $3.56 12.7% 11
TFII-N TFI International 1.0% $104.59 -5.6% $1.08 12.5% 11
TIH-T Toromont Industries 1.5% $104.77 -7.8% $1.52 15.2% 32
TRP-T TC Energy Corp. 5.6% $63.26 5.9% $3.57 4.4% 21
T-T Telus 4.5% $29.33 -1.4% $1.33 6.2% 18
WCN-N Waste Connections 0.6% $146.40 9.2% $0.92 8.9% 12
Averages 2.8% -0.2% 10.2% 18

MP Market Review – September 02, 2022

Last updated by BM on September 05, 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 -1.9% YTD price return (capital). Dividend growth of ‘The List’ remains at +10.2% 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 was one earnings report from companies on ‘The List’.
  • Two 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

“The desirability of a business with extraordinary economic characteristics can be ruined by the price you pay for it.”

– Charlie Munger

We haven’t done our Monthly Portfolio Reviews in a couple of months because ‘The List’ hasn’t changed much. Companies that meet our minimum valuation criteria have remained the same. What has changed, however, is the price we could have purchased them at. For example, Royal Bank (RY-T) and TD Bank (TD-T) have both found their way into our model portfolio on price weakness recently.

During our monthly reviews, we highlight companies on ‘The List’ that meet our minimum criteria of 6.5% EPS yield. Here is the screen from last Friday’s close:

Once a company shows up on our screen, we dive deeper to learn more about what is causing the price weakness and whether the current price meets our other valuation measures. If we like what we see, we enter a position. There are a few exciting candidates on ‘The List’ we are researching right now.

To find out when we buy or sell a position in our model portfolios, subscribe today and build your dividend growth portfolios alongside ours.

Performance of ‘The List’

Last week, ‘The List’ was down slightly with a minus -1.9% YTD price return (capital). Dividend growth of ‘The List’ remains at +10.2% 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 +4.19%; Metro (MRU-T), up +1.00%; and Waste Connections (WCN-N), up +0.65%.

Canadian National Railway (CNR-T) was the worst performer last week, down -4.7%.

Recent News

Bell to buy Distributel, the latest industry acquisition (Globe & Mail)

“Distributel has vocally opposed Bell in terms of wholesale rates and other arenas, like site blocking,” said Andy Kaplan-Myrth, vice-president of regulatory and carrier affairs for TekSavvy Solutions Inc., a telecom based in Chatham, Ont. “This acquisition is a clear loss of independence that will prevent them from taking those positions in the future.”

Interesting take on this latest acquisition from Bell Canada (BCE-T).  In 2019 the CRTC ruled in favour of a rate reduction that big telecoms could charge smaller internet service providers like Distributel. The big telecoms appealed, and the decision was reversed.

The CRTC was warned at that time that small internet service providers would not be able to compete if the prices were raised but chose to reverse the decision anyway.

“In a recent letter to the CRTC, TekSavvy renewed its warnings that small telecommunications companies would go out of business or be acquired in the current telecom landscape, leaving consumers with fewer options and higher bills. The company alleged in its letter that the big telecoms engage in predatory pricing, selling internet to their own flanker brands at cheaper rates than they charge independent competitors.”

As an investor, it appears Bell Canada (BCE-T) came out on top in this battle. One of our quality factors is market capitalization. With BCE-T having a market cap of ~60 billion dollars, they tend to have some added leverage in these disputes.

Bank of Canada expected to raise interest rate for fifth time at pivotal moment for economy (Globe & Mail)

“Inflation appears to have peaked but it’s still running hot and a supersized rate hike from the Bank of Canada next week is widely expected.”

The more expensive it is to borrow money, the less incentive there is for consumers and businesses to borrow and buy things. Central banks hope this will slow the economy and cool inflation. A slowing economy will affect earnings which then puts downward pressure on prices.

Good entry points (sensible prices) on our quality dividend growers could be getting closer!

Two companies on ‘The List’ are due to report earnings this week.  

Enghouse Systems Limited (ENGH-T) will release its third-quarter 2022 results on Thursday, September 8, 2022, after markets close.

Dollarama Inc. (DOL-T) will release its second-quarter 2023 results on Friday, September 9, 2022, before markets open.

Dividend Increases

Last week, there were no dividend increases from companies on ‘The List’.

Earnings Releases

One company on ‘The List’, Alimentation Couche-Tard Inc. (ATD-T), reported their first quarter 2023 earnings last week.  ATD-T is another of a handful of companies on ‘The List’ that follows an off-cycle reporting schedule

Alimentation Couche-Tard Inc. (ATD-T)

“In the face of continued and historic inflationary conditions and high fuel prices, we are pleased to report strong results this quarter, especially in convenience where we had healthy same stores sales in our U.S. market. We also continued to generate robust fuel margins across all of our platforms. In this period of high inflation and high prices, we remain focused on delivering a strong and consistent value to our customers and on maintaining cost discipline in our operations” said Brian Hannasch, President and Chief Executive Officer of Alimentation Couche-Tard.

Highlights:

  • Net earnings were $872.4 million, or $0.85 per diluted share for the first quarter of fiscal 2023 compared with $764.4 million, or $0.71 per diluted share for the first quarter of fiscal 2022. Adjusted net earnings1 were approximately $875.0 million compared with $758.0 million for the first quarter of fiscal 2022. Adjusted diluted net earnings per share1 were $0.85, representing an increase of 19.7% from $0.71 for the corresponding quarter of last year.
  • Total merchandise and service revenues of $4.1 billion, an increase of 0.1%. Same-store merchandise revenues increased by 3.5% in the United States, by 2.8% in Europe and other regions1, and decreased by 1.3% in Canada.
  • Merchandise and service gross margin1 decreased by 0.3% in the United States to 33.9%, and increased by 0.5% in Europe and other regions to 38.9%, and by 0.8% in Canada to 33.1%.
  • Same-store road transportation fuel volumes decreased by 4.0% in the United States, by 3.7% in Europe and other regions, and increased by 0.4% in Canada.
  • Road transportation fuel gross margin1 of 49.00¢ per gallon in the United States, an increase of 12.25¢ per gallon, US 12.26¢ per liter in Europe and other regions, an increase of US 1.94¢ per liter, and CA 14.04¢ per liter in Canada, an increase of CA 3.12¢ per liter. Fuel margins remained healthy throughout the network, due to favorable market conditions and the continued work on the optimization of the supply chain.
  • Despite the growth in expenses of 9.4%, the Corporation has deployed strategic efforts to mitigate costs increases and inflationary pressures, which is demonstrated by the normalized growth of expenses1 of 7.3%, remaining below inflation.
  • Sequential improvement of the leverage ratio1 at 1.31 : 1, and of the return on capital employed1 at 15.9%, both driven by strong earnings.
  • On April 22, 2022, the Corporation renewed its share repurchase program which allows it to repurchase up to 10.0% of the public float. Under the renewed program, shares for a net amount of $478.0 million were repurchased during the quarter.
  • On August 30, 2022, subsequent to the end of the quarter, the Corporation also announces that, following satisfaction of closing conditions, it has closed its proposed acquisition of Cape D’Or Holdings Limited, Barrington Terminals Limited and other related holding entities in Atlantic Canada.

Outlook:

Claude Tessier, Chief Financial Officer, added: “We delivered another impressive quarter highlighted by increases of 10.6% in adjusted EBITDA and 19.7% in adjusted diluted net earnings per share compared to the first quarter of fiscal 2022, bringing our last four quarters adjusted EBITDA to more than $5.4 billion. Our customary cost discipline, combined with an improving labor market, have allowed us to limit the normalized growth of expenses to 7.3%, compared to the first quarter of last year, more than 1% below inflation, which was particularly notable once again this quarter. Our financial position remains strong, highlighted by our leverage ratio1 of 1.31, providing us with opportunities for the future. I am especially proud of our teams’ execution this quarter which resulted in sequential improvements on both of our key return metrics.”

See the full Earnings Release here

 

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 September 02, 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 5.1% $13.70 -4.5% $0.70 5.4% 11
ATD-T Alimentation Couche-Tard Inc. 0.7% $59.46 14.1% $0.44 18.1% 12
BCE-T Bell Canada 5.7% $63.57 -3.6% $3.64 4.0% 13
BIP-N Brookfield Infrastructure Partners 3.5% $41.18 1.1% $1.44 5.9% 14
CCL-B-T CCL Industries 1.5% $64.58 -4.7% $0.96 14.3% 20
CNR-T Canadian National Railway 1.9% $153.76 -0.7% $2.93 19.1% 26
CTC-A-T Canadian Tire 3.7% $157.65 -13.9% $5.85 24.5% 11
CU-T Canadian Utilities Limited 4.4% $40.24 9.9% $1.78 1.0% 50
DOL-T Dollarama Inc. 0.3% $80.29 26.6% $0.22 9.2% 11
EMA-T Emera 4.3% $61.31 -2.0% $2.65 2.9% 15
ENB-T Enbridge Inc. 6.3% $54.31 9.6% $3.44 3.0% 26
ENGH-T Enghouse Systems Limited 2.2% $32.07 -30.1% $0.72 16.3% 15
FNV-N Franco Nevada 1.1% $121.59 -10.7% $1.28 10.3% 14
FTS-T Fortis 3.7% $58.25 -3.7% $2.14 2.9% 48
IFC-T Intact Financial 2.1% $191.36 16.9% $4.00 17.6% 17
L-T Loblaws 1.3% $117.33 14.2% $1.54 12.4% 10
MGA-N Magna 3.2% $56.42 -30.8% $1.80 4.7% 12
MRU-T Metro 1.6% $70.77 5.6% $1.10 12.2% 27
RY-T Royal Bank of Canada 4.0% $123.04 -10.1% $4.96 14.8% 11
SJ-T Stella-Jones Inc. 2.0% $40.03 -1.6% $0.80 11.1% 17
STN-T Stantec Inc. 1.1% $61.52 -12.4% $0.71 6.8% 10
TD-T TD Bank 4.2% $85.53 -13.9% $3.56 12.7% 11
TFII-N TFI International 1.0% $103.31 -6.7% $1.08 12.5% 11
TIH-T Toromont Industries 1.5% $101.33 -10.9% $1.52 15.2% 32
TRP-T TC Energy Corp. 5.7% $63.11 5.7% $3.57 4.4% 21
T-T Telus 4.5% $29.71 -0.2% $1.33 6.2% 18
WCN-N Waste Connections 0.7% $140.55 4.8% $0.92 8.9% 12
Averages 2.9% -1.9% 10.2% 18

MP Market Review – August 26, 2022

Last updated by BM on August 29, 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 -0.2% YTD price return (capital). Dividend growth of ‘The List’ remains at +10.2% 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 two earnings reports from companies on ‘The List’.
  • One company on ‘The List’ is 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

“The evidence is clear. If you like the idea of lower volatility, shallow losses in bear markets and higher long-term returns, then it would be prudent to increase your allocation to high-quality dividend-paying stocks.”

– Noah Solomon, Financial Post article

Stocks the undisputed champion for scoring long-term returns (Financial Post)

The author compares a wide range of historical returns on several types of investments. He cautions investors not to invest in a stock-only portfolio unless they meet three criteria.

“The 100-per-cent stock portfolio is a double-edged sword. If you can 1) stick with it through stomach-churning bear market losses, 2) have a (very) long-term horizon, and 3) don’t need to sell assets for any reason, then strapping yourself into the roller coaster of a 100-per-cent stock portfolio may indeed be the optimal solution. Conversely, it would be difficult to identify a worse alternative for those who do not meet these criteria.”

Our dividend growth strategy seems well aligned with his criteria.

  1. We only buy quality, so bear markets don’t bother us as we know our companies will still be there and be profitable coming out of downturns.
  2. Our time horizon is very long (ten years and more).
  3. We don’t need to sell to generate income and pay bills. We have growing dividends.

My favourite part of the article, though, is this graphic.

Another quote we like from the article is this one:

“With respect to the emotional fortitude required to stand pat through bear markets, there is considerable evidence that many investors are simply incapable of doing this.”

A time-tested dividend growth strategy focused on income and predictable capital returns over the long term certainly helps us with our ‘emotional fortitude’.

If a DGI strategy interests you, please subscribe to our Magic Pants DGI Premium Membership, and you can learn how to build a robust dividend growth portfolio of your own.

Performance of ‘The List’

Last week, ‘The List’ was down slightly with a minus -0.2% YTD price return (capital). Dividend growth of ‘The List’ remains at +10.2% YTD, demonstrating the rise in income over the last year.

The best performers last week on ‘The List’ were TFI International (TFII-N), up +5.19%; TC Energy Corp. (TRP-T), up +2.32%; and Brookfield Infrastructure Partners (BIP-N), up +1.32%.

Magna (MGA-N) was the worst performer last week, down -5.12%.

Recent News

Rule of 20 says market bottom much lower (Globe & Mail)

“The investing rule of 20 states that when a new U.S. bull market starts, the trailing price to earnings (PE) ratio of the S&P 500 added to the inflation rate will result in a number less than 20. Unfortunately, right now the trailing PE ratio is 20.2 and the inflation rate is 8.5.”

Following this rule, inflation would need to go to zero, the S&P 500 would have to fall 40 percent more, or earnings would have to be reported 50 percent above expectations. All three scenarios look improbable in the short term.

There is also mention of CAPE being abnormally high, one of the valuation metrics we use to arrive at a sensible price for our quality dividend growers.

The bear market rally is unravelling. Here’s why it may be two years until stocks truly bottom. (Globe & Mail)

A few months ago, since the markets in the United States entered a bear market, we have been commenting on ‘bear market bounces,’ and the data from past bear markets have backed us up. This article looks at the data and arrives at a similar conclusion. The bear market is likely to continue for at least a year. Based on the behaviour of the market last Friday and particularly the comments from Federal Reserve Chair Jerome Powell, we are in for some more pain in the short term.

There was some excellent advice later on in the article.

“Play the long game by being patient and nimble – since intermittent rallies will come and go – and focus mostly on capital preservation.”

Purchasing individual, quality, dividend growers at sensible prices helps us preserve our capital.

One company on ‘The List’ is due to report earnings this week. ATD-T is another of the handful of companies on ‘The List’ that follows an off-cycle reporting schedule.

Alimentation Couche-Tard Inc. (ATD-T) will release its first-quarter 2023 results on Wednesday, August 31, 2022, before markets open.

Dividend Increases

Last week, there were no dividend increases from companies on ‘The List’.

Earnings Releases

Royal Bank (RY-T) and TD Bank (TD-T) follow an off-cycle reporting schedule. Their year ends on October 31 each year. Last week, both companies reported their Q3 Fiscal 2022 earnings.

 

Royal Bank (RY-T)

Highlights:

Outlook:

“Despite the complicated macroeconomic backdrop, we are operating from a position of strength across our capital, liquidity and allowance coverage ratios. I am confident our competitive advantages will drive premium growth going forward. Our premium return on equity was a source of strong internal capital generation and double-digit growth in book value per share. Our priorities in deploying our capital have not changed. We remain focused on building on our momentum and driving accretive, organic growth. Which I will speak to a little later. As part of our commitment to delivering long-term value for our shareholders, we bought back over 10 million shares while paying $1.8 billion of dividends this quarter. We remain well-positioned to execute on key strategic priorities via acquisitions should they meet our strategic and financial requirements. And we are looking forward to working with our new colleagues following the anticipated close of Brewin Dolphin acquisition later this year. Finally, we are comfortable with operating at a higher capital ratio at this point in the cycle. We believe this is the prudent thing to do given the uncertain environment. Our liquidity coverage ratio provides a $66 billion buffer over the regulatory minimum. And we expect to continue to fund the majority of our organic loan growth in our personal and commercial banking businesses through our large client deposit base.”

See the full Earnings Release here

 

Toronto Dominion Bank (TD-T)

 “Continued business momentum, increased customer activity and the benefits of our deposit rich franchise contributed to TD’s strong performance in the third quarter,” said Bharat Masrani, Group President and CEO, TD Bank Group. “Investments in talent and innovation, combined with our focus on prudent risk and financial management, strengthened our business and extended our competitive advantage.”

Highlights:

THIRD QUARTER HIGHLIGHTS

  • Reported diluted earnings per share were $1.75, compared with $1.92.
  • Adjusted diluted earnings per share were $2.09, compared with $1.96.
  • Reported net income was $3,214 million, compared with $3,545 million.
  • Adjusted net income was $3,813 million, compared with $3,628 million.

YEAR-TO-DATE FINANCIAL HIGHLIGHTS

  • Reported diluted earnings per share were $5.85, compared with $5.68.
  • Adjusted diluted earnings per share were $6.18, compared with $5.83.
  • Reported net income was $10,758 million, compared with $10,517 million.
  • Adjusted net income was $11,360 million, compared with $10,783 million.

Outlook:

“We enter the final quarter of fiscal 2022 with growing businesses, a powerful brand and a proven ability to drive consistent execution across the Bank,” added Masrani. “In a complex macroeconomic environment, we are well-positioned to continue investing in our business and create long-term value for our shareholders.” 

See the full Earnings Release here

 

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 August 26, 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 5.0% $14.15 -1.4% $0.70 5.4% 11
ATD-T Alimentation Couche-Tard Inc. 0.8% $56.97 9.3% $0.44 18.1% 12
BCE-T Bell Canada 5.6% $64.65 -1.9% $3.64 4.0% 13
BIP-N Brookfield Infrastructure Partners 3.3% $43.01 5.6% $1.44 5.9% 14
CCL-B-T CCL Industries 1.5% $64.27 -5.2% $0.96 14.3% 20
CNR-T Canadian National Railway 1.8% $160.99 3.9% $2.93 19.1% 26
CTC-A-T Canadian Tire 3.6% $161.24 -12.0% $5.85 24.5% 11
CU-T Canadian Utilities Limited 4.3% $41.23 12.6% $1.78 1.0% 50
DOL-T Dollarama Inc. 0.3% $80.48 26.9% $0.22 9.2% 11
EMA-T Emera 4.3% $61.35 -2.0% $2.65 2.9% 15
ENB-T Enbridge Inc. 6.1% $56.80 14.7% $3.44 3.0% 26
ENGH-T Enghouse Systems Limited 2.2% $32.33 -29.5% $0.72 16.3% 15
FNV-N Franco Nevada 1.0% $126.96 -6.7% $1.28 10.3% 14
FTS-T Fortis 3.6% $58.83 -2.7% $2.14 2.9% 48
IFC-T Intact Financial 2.1% $192.44 17.5% $4.00 17.6% 17
L-T Loblaws 1.3% $117.31 14.2% $1.54 12.4% 10
MGA-N Magna 3.1% $58.98 -27.7% $1.80 4.7% 12
MRU-T Metro 1.6% $70.06 4.5% $1.10 12.2% 27
RY-T Royal Bank of Canada 4.0% $124.97 -8.7% $4.96 14.8% 11
SJ-T Stella-Jones Inc. 1.9% $41.08 1.0% $0.80 11.1% 17
STN-T Stantec Inc. 1.1% $63.22 -9.9% $0.71 6.8% 10
TD-T TD Bank 4.1% $86.87 -12.6% $3.56 12.7% 11
TFII-N TFI International 1.0% $107.33 -3.1% $1.08 12.5% 11
TIH-T Toromont Industries 1.4% $105.49 -7.2% $1.52 15.2% 32
TRP-T TC Energy Corp. 5.4% $65.74 10.1% $3.57 4.4% 21
T-T Telus 4.4% $30.10 1.1% $1.33 6.2% 18
WCN-N Waste Connections 0.7% $139.64 4.2% $0.92 8.9% 12
Averages 2.8% -0.2% 10.2% 18

We buy quality individual dividend growth stocks when they are sensibly priced and hold for the growing income.