MP Market Review – February 13, 2026

Intro

Our Timely Ten lists remain the fastest way to spot potential value opportunities, which explains why they continue to be the most-read articles every month.

Timely Ten – Canada

Typically, movement up and down the Timely Ten is gradual. Candidates often sit on the list for months before valuation becomes the catalyst and the stock finally moves. Not last month. Two names repriced dramatically in under 30 days.

Magna is the clearest example. It spent nearly two years in the top ten with little movement. Then a strong earnings report hit and the stock surged 27%, falling from #6 last month to #12 today. Moves like this are rare, but they remind us of a core truth: quality companies cannot stay undervalued forever. Magna’s cyclical business adds an element of timing, which is why we built positions in 2023 and again in 2025. When the market finally caught up last week, we were already there collecting a rising dividend. We never know when valuation will normalize, but patience plus dividend growth makes the wait pay.

At the opposite extreme was Thomson Reuters. The business remains strong: recurring revenue, strong free cash flow, and durable dividend growth. What changed was sentiment. The market has pulled software and information services into the AI disruption narrative, and TRI’s valuation compressed faster than expected. The stock’s jump up the Timely Ten from #21 to #9 in one month got our full attention and triggered our second DGI Alert. Unlike Magna’s surge, this was a valuation reset moving in our favor.

Timely Ten – United States

Union Pacific appears to be following Magna’s path. After a long stretch of undervaluation, it has moved out of the Timely Ten and now sits at #12 on our U.S. list. Railroads remain core infrastructure businesses with durable dividend and price growth over full cycles. We have waited patiently for this repricing, and it now looks close.

Automatic Data Processing and Intuit are now firmly embedded in the U.S. Timely Ten after price weakness last month. Intuit’s jump from #20 to #6 mirrors Thomson Reuters in Canada. The market is broadly derating software right now, and high-quality franchises are being marked down with the rest.

One more notable move: Microsoft. The stock climbed from #24 to #17 on the Timely Ten after its recent pullback. It is rare for one of the world’s highest-quality companies to even approach our undervalued range. We used the opportunity to initiate a position in the U.S. model portfolio. When elite businesses briefly go on sale, we act.

As always, the Timely Ten is not a call to action on its own, but a disciplined starting point for deeper research and patient capital deployment.

Here’s a recap on how we select our Timely Ten:

Step three in our process involves monitoring our quality dividend growers regularly, which can become quite challenging depending on the number of companies we track. Fortunately, we rely on ‘The List’ instead of the vast array of stocks in the index, which streamlines our task. Nevertheless, we continually seek methods to enhance our efficiency. Through dividend yield theory, we’ve discovered an approach that has proven remarkably effective in aiding us with our efforts over the years.

Dividend yield theory is a simple and intuitive approach to valuing dividend growth stocks. It suggests that the dividend yield of quality dividend growth stocks tends to revert to the mean over time, assuming that the underlying business model remains stable. In practical terms, if a stock pays a dividend yield above its ten-year average annual yield, its price will likely increase to return the yield to its historical average. Knowing that price and yield go in opposite directions, this theory helps us find stocks poised for a favourable price correction.

We have pre-screened our candidates using the criteria we initially laid out in building our watchlists. This helps us considerably narrow the universe of investable stocks.

1. Dividend growth streak: 10 years or more.
2. Market cap: Minimum one billion dollars.
3. Diversification: Limit of five companies per sector, preferably two per industry.
4. Cyclicality: Exclude REITs and pure-play energy companies due to high cyclicality.

Next, we rank our Canadian and American watchlists based on how far each stock’s price is below its fair value (Low Price), as determined by dividend yield theory. To find fair value, divide the current dividend (Dividend) by the stock’s historical high yield (High Yield).

Since price and yield move in opposite directions, a lower price results in a higher yield, and vice versa. The ten companies above the thick black line have a current price (Price) below fair value (Low Price). Put simply, these stocks have a current dividend yield higher than their historically high yield. According to dividend yield theory, these companies are sensibly priced and have the highest probability of a price increase in the short term. These are our Timely Ten.