Last updated by BM on July 4, 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.’
- ‘The List’ was up slightly last week with a minus -5.8% 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.’
- One company on ‘The List,’ Alimentation Couche-Tard Inc. (ATD-T), reported their Q4 Fiscal 2022 earnings.
- No companies on ‘The List’ are due to report earnings this week.
- Are you looking for a portfolio of ideas like these? Magic Pants DGI Premium Membership Subscribers get exclusive access to the MP Wealth-Builder Model Portfolio (CDN). Learn More
“The intelligent investor is a realist who buys from pessimists and sells to optimists.”
– Ben Graham, The Intelligent Investor
We read many financial articles over the long weekend, none predicting a fast turnaround in the fortunes of the stock markets. Many economists are now saying that a recession is most likely. Being a ‘realist’, we know that markets do not only go in one direction, so we are okay waiting for sensible prices on our excellent dividend growers.
The hardest part in markets like today is resisting the urge to buy too soon when a stock you have been following goes down in price. When we look at all the stocks on ‘The List’ since May 1 of this year, only three have positive returns. That’s twenty-four of our twenty-seven quality dividend growers, in the red, in the last two months. The only saving grace is that our loss is only half of what the overall market is experiencing. Having a process protects our capital.
Earnings season has begun, so we will soon get a clearer picture of how companies feel about their businesses and the economy for the rest of the year.
Performance of ‘The List’
Last week, ‘The List’ was up slightly with a minus -5.8% 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 Brookfield Infrastructure Partners (BIP-N), up 4.73%; TFI International (TFII-N), up 4.03%; and Stella-Jones Inc. (SJ-T), up 3.75%.
Alimentation Couche-Tard Inc. (ATD-T) was the worst performer last week, down -9.88%.
Recent News
TC Energy to build $5-billion gas pipeline in Mexico, official says
“Canada’s TC Energy (TRP-T) has agreed with Mexico to build a $5-billion gas pipeline in the Mexican Gulf Coast state of Veracruz, senior foreign ministry official Roberto Velasco said on Friday.”
Boston Water and Sewer Commission selects Stantec (STN-T) for next phase of US$150 Million East Boston Sewer Separation project
“Water infrastructure plays a crucial role in a city like Boston, where factors such as climate change, population growth, and new development only further stress existing resources,” said Mike Carroll, Stantec Project Manager. “We’re proud to continue a decades-long relationship with the BWSC to improve the historic and essential waterways while helping modernize this infrastructure across several neighbourhoods to support residents and businesses into the future.”
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, one company on ‘The List’, Alimentation Couche-Tard Inc. (ATD-T), reported their Q4 Fiscal 2022 earnings.
Alimentation Couche-Tard Inc. (ATD-T)
“We are proud to report a remarkable year despite the continued pressures caused by the pandemic, global inflation, and staffing challenges. With our operational and financial resilience, we had record-breaking results across key metrics and remained focused on our strategic goals. During the quarter, we made notable progress accelerating organic growth both inside the store and on our forecourts, as well as innovating for the future, including beginning our e-mobility journey in North America and rolling out smart checkout frictionless technology in targeted geographies. We also started the work with select partners to get a better understanding of our consumers’ interests in rapid delivery. I want to thank all our team members, customers, and shareholders for their continued commitment to the business as we prepare for an even stronger year ahead,” said Brian Hannasch, President and Chief Executive Officer of Alimentation Couche-Tard.
Highlights:
- Net earnings per diluted share of $2.52 compared with $2.44 for fiscal 2021, an increase of 3.3%, while adjusted diluted net earnings per share were $2.60 compared with $2.45 for fiscal 2021, an increase of 6.1%.
- Fulfillment of the Corporation’s share repurchase program, totaling $1.9 billion, including $834.7 million during the fourth quarter of fiscal 2022. Subsequent to the end of fiscal 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 $429.2 million were repurchased.
- Increase in the annual dividend declared for fiscal 2022 of 25.6%, from CA 33.25¢ to CA 41.75¢.
- Return on capital employed remained strong at 15.4%, a slight decrease from 15.9%, driven by impairment costs incurred during the year which had a negative impact of approximately 0.3%.
- Leverage ratio at 1.39 : 1, a slight increase from 1.32 : 1, driven primarily by the use of cash for share repurchases.
- Despite its annual growth rate of expenses of 14.3%, the Corporation has deployed strategic efforts to mitigate costs increases and inflationary pressures, which is demonstrated by a compound annual growth rate of 3.4% of normalized growth of expenses compared to 2020, including employee-related costs, remaining below inflation.
Outlook:
“As we look ahead to fiscal 2023, our healthy financial position and strong capital structure, including our newly implemented US Commercial Paper Program, position us well to continue delivering strong results and return further value to our shareholders as we remain focused on our ambitious double-again strategy.”
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 June 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 | 5.1% | $13.78 | -4.0% | $0.70 | 5.4% | 11 |
| ATD-T | Alimentation Couche-Tard Inc. | 0.9% | $50.21 | -3.6% | $0.44 | 18.1% | 12 |
| BCE-T | Bell Canada | 5.8% | $63.27 | -4.0% | $3.64 | 4.0% | 13 |
| BIP-N | Brookfield Infrastructure Partners | 3.7% | $38.93 | -4.4% | $1.44 | 5.9% | 14 |
| CCL-B-T | CCL Industries | 1.6% | $60.84 | -10.3% | $0.96 | 14.3% | 20 |
| CNR-T | Canadian National Railway | 2.0% | $144.79 | -6.5% | $2.93 | 19.1% | 26 |
| CTC-A-T | Canadian Tire | 3.6% | $162.40 | -11.3% | $5.85 | 24.5% | 11 |
| CU-T | Canadian Utilities Limited | 4.6% | $38.39 | 4.9% | $1.78 | 1.0% | 50 |
| DOL-T | Dollarama Inc. | 0.3% | $74.12 | 16.9% | $0.22 | 9.2% | 11 |
| EMA-T | Emera | 4.4% | $60.30 | -3.7% | $2.65 | 2.9% | 15 |
| ENB-T | Enbridge Inc. | 6.3% | $54.36 | 9.7% | $3.44 | 3.0% | 26 |
| ENGH-T | Enghouse Systems Limited | 2.5% | $28.43 | -38.0% | $0.72 | 16.3% | 15 |
| FNV-N | Franco Nevada | 1.0% | $134.59 | -1.1% | $1.28 | 10.3% | 14 |
| FTS-T | Fortis | 3.5% | $60.85 | 0.6% | $2.14 | 2.9% | 48 |
| IFC-T | Intact Financial | 2.2% | $181.56 | 10.9% | $4.00 | 17.6% | 17 |
| L-T | Loblaws | 1.3% | $116.09 | 13.0% | $1.54 | 12.4% | 10 |
| MGA-N | Magna | 3.2% | $55.79 | -31.6% | $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 | 4.0% | $124.64 | -8.9% | $4.96 | 14.8% | 11 |
| SJ-T | Stella-Jones Inc. | 2.5% | $32.50 | -20.1% | $0.80 | 11.1% | 17 |
| STN-T | Stantec Inc. | 1.3% | $56.39 | -19.7% | $0.71 | 6.8% | 10 |
| TD-T | TD Bank | 4.2% | $84.41 | -15.0% | $3.56 | 12.7% | 11 |
| TFII-N | TFI International | 1.3% | $81.89 | -26.1% | $1.08 | 12.5% | 11 |
| TIH-T | Toromont Industries | 1.5% | $104.08 | -8.5% | $1.52 | 15.2% | 32 |
| TRP-T | TC Energy Corp. | 5.4% | $66.68 | 11.6% | $3.57 | 4.4% | 21 |
| T-T | Telus | 4.6% | $28.67 | -3.7% | $1.33 | 6.2% | 18 |
| WCN-N | Waste Connections | 0.7% | $125.32 | -6.5% | $0.92 | 8.9% | 12 |
| Averages | 2.9% | -5.8% | 10.2% | 18 |
