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 |
