At Dividend Stocks Rock, we sort every name into one of three buckets: core holdings, educated guesses, and falling knives. The label captures the role the stock plays for me and how I expect to manage it. Get the role wrong and a 30% drop will scare you out of a great business. Get it right and the same drop becomes a buying opportunity.

Here is how the three buckets work, with two current examples in each.

*Disclosure: This is education, not advice. Do your own due diligence.

What is a core holding?

A core holding is a stock you can own for ten years without checking the screen (but you still should!). Strong dividend triangle, sustainable payout ratio, durable moat, and capital allocation you trust. These names should make up 70% to 80% of a retirement portfolio.

I want the dividend triangle (revenue growth, earnings growth, dividend growth) clean. I want the payout ratio comfortable. I want a balance sheet that gives management room to keep paying through a recession. And I want a business model I can explain to a 12-year-old in two sentences.

Mastercard (MA): A Real Tollbooth

Mastercard sits at the top of its category. PRO rating 5 of 5, Dividend Safety 5 of 5. The dividend triangle is one of the cleanest in the market. Payout ratio sits under 20%. Cash payout ratio is 17%.

The business model is a tollbooth. Every swipe puts a few cents in Mastercard’s pocket. The network effect runs decades deep. Cash, fraud, and crypto get the headlines, but the core machine keeps growing as commerce moves online and cross-border.

MA’s yield is nearly non-existent, which can be unattractive to income-seeking investors. However, it exhibits a double-digit dividend growth rate over the past five years. The forward yield is currently above the 5-year average. It does signal that the market is paying less for the same business than it has for most of the last decade. A 12% drop over the last 12 months gives long-term investors a rare entry point.

Dollarama (DOL.TO): King of Operating Margins

Dollarama is the Canadian version of “do not overthink it.” PRO rating 5 of 5. The dividend triangle shows double-digit revenue, EPS, and dividend growth over five years. The yield is small. The growth is not.

The moat is procurement and scale. Dollarama buys in volume, controls its own private labels, and runs a footprint of more than 1,500 stores in Canada with a longer runway through its stake in Dollarcity in Latin America. Operating margins keep climbing. Same-store sales hold up in good and bad consumer environments.

If you want a Canadian compounder that has raised its dividend every year since 2011, this is one of the best names on the TSX. I do not check on Dollarama between earnings calls. That is the point of a core holding.

What is an educated guess?

An educated guess is a stock close to core quality, with one visible flaw. Maybe the dividend triangle has cracks. Maybe debt is creeping up. Maybe the business is in a cyclical patch. The thesis is intact, but the metrics are not where I want them for a “set and forget” position.

I keep educated guesses in industries I know well. They need more monitoring than core holdings. Their status can flip in a quarter or two, either back up to core or down to falling knife.

Union Pacific (UNP): A Slowing Dividend Growth

Union Pacific is a high-value educated guess. PRO 3, Safety 3. The triangle is mixed: revenue 5-year growth 3.6%, EPS 5-year growth 6.4%, dividend 5-year growth 6.6%. The streak is 17 years. The flaw is recent: dividend hikes and revenue have slowed. That is a warning shot.

The thesis is still strong. North American rails are an oligopoly. Trucks cannot replace the cost advantage of moving heavy freight by rail. UNP is now working through a merger with Norfolk Southern that would create the first true coast-to-coast US railroad. If management executes, the situation could change.

P/E sits at 21.9 versus a 5-year average of 21.6. Forward P/E at 20.5. Forward yield of 2.08% is below the 5-year average of 2.34%. The market is not giving away the rails. The question is whether the merger and freight recovery turn the dividend triangle back up.

Bank of Nova Scotia (BNS.TO): Weaker than Its Peers

BNS is what an educated guess looks like in a Canadian bank. PRO 3, Safety 3. The streak reset to 3 years after the 2024 dividend freeze.

BNS is not a bad bank. It’s simply weaker than its Canadian peers. The reason I keep watching is that CEO Scott Thomson is running a credible restructuring. He has trimmed Latin America, taken a stake in KeyCorp to build out US exposure, and is shifting capital to higher-return businesses. The forward P/E of 12.4 sits in line with peers. The forward yield of 4.0% is well below the 5-year average of 5.7%, suggesting the market already gives BNS some credit for the turnaround.

If the dividend triangle starts climbing again in 2026 and 2027, BNS moves back to a 4. If it stalls, the rating drops. This is a position to monitor quarter by quarter, not a stock to forget.

What is a falling knife?

A falling knife is a stock that has dropped 20 to 30 percentage points faster than the broader market, while the underlying business is also deteriorating. The dividend triangle is broken or breaking. The payout ratio is unsustainable. A dividend cut is on the table, or has already happened.

Falling knives feel cheap, and that is the trap. A stock down 70% can fall another 70%. A 12% yield is a signal, not income you will collect for long. The market is not stupid. When something looks too cheap to be true, the business is breaking faster than the price.

I rarely own falling knives. When I do, the position is small, and the thesis is specific.

Dollar General (DG): A Frozen Dividend Growth

Dollar General was once a defensive consumer staples darling. Today it is a PRO 2, Safety 2. The dividend growth has been frozen for two years. Dividend 1-year growth is zero. Dividend 3-year growth is 1.75%. EPS 5-year growth is negative 8.8%. Total return over five years is -45%.

The story people lean on, “rural discount moat,” still holds some truth. The problem is that the business model keeps under-earning. Shrink (theft and damaged inventory) hit margins hard. Staffing costs have climbed. Store-level execution has slipped. Every quarter, the company promises a turnaround. Every quarter, the earnings come in lighter than expected.

A 2.3% forward yield against a 5-year average of 1.9% is not enough compensation for the trend. There may be a value play here at some point, but why lose time on it when there are much better options on the market?

Goeasy (GSY.TO): An Inverted Triangle

This one has quickly lost all its shine to a PRO 1. goeasy is paired with a Safety 1. The stock is down 75% over the last 12 months. The dividend yield has ballooned to 16% amid falling prices. The payout ratio reads zero because earnings have collapsed. Free cash flow yield is -35%. Debt to EBITDA above 15.

goeasy is a subprime lender. The business depends on a healthy credit cycle and on the company’s ability to underwrite loans to customers that other lenders will not touch. When the cycle turns, this is the kind of name that gets hit twice: rising defaults and tightening capital markets at the same time.

A 16% yield is a warning. The first rule on a falling knife is to look at the dividend triangle. If it is inverted, the price is telling you the truth, not lying.

How to use the three buckets in a portfolio

For an investor in the accumulation phase, all three categories can play a role, with weights heavy on core holdings. Educated guesses give you upside as ratings improve. Falling knives are rarely worth it unless you are prepared to be wrong for a long time.

For an investor in or near retirement, the case for anything but core holdings weakens fast. A retirement portfolio should hold 80% or more in core names. Educated guesses get smaller weights. Falling knives, in most cases, do not belong. Sequence-of-returns risk does not care about your contrarian thesis.

The Ultimate Safe List to Get Dividend Growth Stock Ideas

To help you build a solid portfolio with dividend growth stocks, I have created the Dividend Rock Stars List, showing about 300 companies with growing trends.

You can read on to understand how it is built and why it’s the ultimate list for investors, or you can skip to the good stuff and enter your name and email below to get the instant download in your mailbox.

The post Core Holdings, Educated Guesses, and Falling Knives appeared first on The Dividend Guy Blog.

That gap between feeling and reality is the difference between the accumulation phase and the decumulation phase. When you are 40, a market drop is a sale. When you are 65, it can feel like the end of your retirement plan. The portfolio did not change. Your relationship to it did.

This article walks through what volatility means at each stage, why your age matters less than your conviction, and the practical steps that let you sit through any market drop without flinching.

Short answer: Volatility tolerance has nothing to do with your birthday. It is a function of conviction, cash position, and a written plan. Get those three right and you can hold equities at 75 without losing sleep. Get them wrong and you will panic at 40.

Risk, Hazard, and Volatility Are Not the Same Thing

Most investors mix three concepts together. Untangling them is the foundation of everything else in this article.

Risk is the chance your return differs from what you expected. Every equity investment carries some.

Hazard is any condition that raises the odds of a loss. A penny stock is a hazard. A blue chip with a clean dividend triangle is not. You reduce hazard by avoiding concentration, weak balance sheets, and speculative plays. You cannot eliminate risk.

Volatility tolerance is how much price movement you can stomach before you sell at the wrong time. Investor questionnaires call it risk tolerance. What they measure is volatility tolerance.

The Canadian banks in 2008 are the textbook case. Their fundamentals were fine. The subprime mess was a US problem. But their share prices dropped 30% to 50% as global markets sold off. Investors who held through the noise recovered their money by the end of 2009, dividends included. The risk was perceived. The volatility was real.

Knowing the difference between price action and business action is the first move toward holding through a downturn.

What Volatility Means at 40

The 2008 crisis hit two groups of investors at the same time. I was in my late twenties. My retired clients were in their seventies. Same crash. Opposite reactions.

When you are still building wealth, volatility works in your favor. Lower prices mean more shares for the same dollar. The math is straightforward. The emotional part is not.

If you contribute every two weeks through a payroll deduction, a 30% drop is the best thing that can happen to a 40-year-old. You buy more units. Your future dividend stream gets a discount. Every bear market you survive while contributing is a gift to your 65-year-old self.

The accumulation phase is also when you learn what kind of investor you are. Not in theory. In practice. How did you feel in March 2020? In 2022? If you sold a position at a loss because the headlines got loud, that is data. It means your allocation is above your true volatility tolerance.

You have two options.

Reduce your equity exposure until you can sleep.

Learn more about the businesses you own so the next drop scares you less.

I prefer option 2. A solar eclipse used to mean the end of the world. Now we put on glasses and watch the show. Knowing how something works changes your reaction to it.

If you struggle with volatility at 40, it will be worse at 65. The accumulation phase is your training ground. Use it.

What Volatility Means at 65

In retirement, the fear changes shape. It is no longer about a bad year. It is about watching your portfolio deplete while you withdraw from it.

This is where sequence-of-returns risk shows up. Qtrade published a study a few years ago with three portfolios. Same starting balance ($500K). Same average annual return (5.40%) over 30 years. Same $21,000 annual withdrawal indexed at 2%.

Only the order of the returns changed.

Three identical averages. Three very different outcomes. The Scenario A, the retiree finishes with $731,000 less than the Scenario C retiree. Same math. Same withdrawal. Just bad luck on the timing.

This is what keeps retirees awake at 3 am. Not the drop itself. The drop combined with withdrawals.

The fix is not to hide in cash. That looks safe, but it kills your purchasing power over 30 years. The fix is to build a structure that lets you stop selling shares during downturns.

The Cash Wedge: Your Volatility Shield in Retirement

A cash reserve covering 24 to 36 months of withdrawals is the simplest defense against sequence-of-returns risk. When markets fall, you stop selling shares. You pull from the wedge. Your equities get time to recover.

One detail most retirees miss. The wedge does not need to cover 36 months of your full retirement budget. It only needs to cover the gap between what your portfolio generates and what you spend.

Budget $50,000. Portfolio generates $50,000 in dividends and interest. No wedge needed. Your income covers your spending.

Budget $50,000. Portfolio generates $30,000. A $20,000 gap. Three years of wedge means $60,000 in cash.

Budget $50,000. Portfolio generates $20,000. A $30,000 gap. Three years means $90,000 in cash.

The bigger the gap between income and budget, the bigger the wedge. The bigger the wedge, the lower your expected return. That is the price you pay to sleep at night. For some retirees, it is a fair trade.

The 2025 tariff scare is a good example of the wedge in action. Markets dropped in February. They had fully recovered by May. Three months. A retiree with a wedge pulled from cash and never touched their equities. A retiree without one sold at the bottom and locked in the loss.

A GIC or bond ladder sits well alongside the wedge. Split a portion of your fixed income across one, two, three, four, and five-year maturities. Each year, one rung matures. You take what you need and reinvest the rest at the long end. It smooths your income and keeps you from chasing rates.

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Three Rules to Stay Calm in a Drop

Understanding markets does not make you immune to panic. Loss aversion is wired into human brains. Behavioral finance research shows that a loss hurts about twice as much as the equivalent gain feels good. Losing $10,000 stings more than gaining $10,000 pleases.

These three rules let you act on logic when your gut wants to act on fear.

Rule 1: Separate price from value. A stock dropping 20% is a price event. Whether it is also a value event depends on the business. If the dividend triangle is intact and the business model is unchanged, the price drop is noise. This is why you build your investment thesis before you buy. You read it again when the price drops.

Rule 2: Pre-commit your response. Decide today what you will do if your portfolio drops 10%, 20%, or 30%. Write it down. When the drop comes, you execute a pre-made decision instead of inventing one under stress. Pre-committed rules beat real-time emotion almost every time.

Rule 3: Measure income, not price. During a downturn, check your dividend income instead of your portfolio value. If your holdings are still paying and raising their distributions, the portfolio is doing its job. The screen number is temporary.

None of this eliminates discomfort. A 30% drop still feels bad. The goal is to act rationally anyway.

Your Personal Volatility Stress Test

Run this checklist once a year, ideally in January, before you look at your annual return.

Cash reserve check. How many months of expenses does your wedge cover? Those below 6 months are vulnerable. 24 months is reasonable. 36 months handles most downturns.

Income concentration check. What percentage of your dividend income comes from your top three holdings? If one company accounts for more than 15% of your income, a dividend cut there will hurt your cash flow. Aim for no single holding above 10% of total income.

Core holdings check. What percentage of your equity portfolio sits in core holdings versus educated guesses versus falling knives? A retirement portfolio should be at least 80% in core holdings.

Sequence-of-returns check. Run the scenario. Markets drop 30% in year one of your retirement and stay flat for two years. Can you cover expenses from cash and fixed income without selling equities? If yes, you have protection. If no, that is the gap to close.

A Projections spreadsheet comes with the Retirement Loop’s membership. It is designed to test out such scenarios, only at the press of a button. Join us now.

Behavior check. Think back to March 2020 and 2022. Did you stay invested or did you make moves you later regretted? If you sold and missed the recovery, your current allocation is above your true volatility tolerance.

Conclusion

Volatility is the price you pay for equity returns over 30 to 40 years. There is no investment strategy that delivers stock-like returns without stock-like volatility. The math has never allowed it.

What changes between age 40 and age 65 is not the volatility. It is the cost of a bad reaction. At 40, a panic sale costs you years of compounding. At 65, it c

an mean running out of money.

Build the wedge. Stick to core holdings. Measure value, not price. The portfolio will look after itself.

If this is the year you want a retirement plan finished before your summer trip, the doors are open until Monday, June 1st. The 10-Day Bullet-Proof Plan kicks off June 2nd, and our coaches will review your work for free.

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The post Market Volatility at 40 vs. 65: What Changes appeared first on The Dividend Guy Blog.

Financials get a bad reputation in dividend portfolios. Some investors associate the sector with 2008. Others remember the 2023 regional bank failures. Many do not trust companies whose products they cannot describe in one sentence.

I get it.

But the sector is too important to ignore. Banks set the price of credit. Asset managers absorb pension and 401(k) flows. Stock exchanges and financial data firms power the modern market. Insurance companies underwrite the risks that the rest of the economy runs on. If you skip financials, you are skipping the engine room of capitalism.

The trick is to know what you are buying.

Below are my picks across four US financial sub-sectors. Each one scores well on the DSR PRO Rating and the Dividend Safety Score, and each one has a real reason to live in a long-term portfolio.

Disclosure: I own shares of Visa (V). I am a shareholder of Royal Bank (RY.TO) and National Bank (NA.TO) on the Canadian side. This is education, not advice. Do your own due diligence.

How I rank US financial stocks

I run every candidate through the same four-step checklist:

• DSR PRO Rating + Dividend Safety Score: I want both at 3 or higher, from a classic “hold” to solid fundamentals and a reliable dividend. A 5 means top of the class.
• Dividend Triangle: revenue growth, EPS growth, and dividend growth over five years. All three need to move in the same direction.
• Dividend history and streak: how long has the company raised the dividend without interruption? In financials, the streak matters more than in most sectors because of how often the cycle bites.
• Yield vs 5-year average: if the forward yield sits above the 5-year average, the stock may be undervalued.

No screener tricks. Just discipline.

Best US Banks

JPMorgan Chase (JPM): PRO 4 | Safety 4

Investment thesis: JPMorgan is the most dominant bank in the United States, leading in investment banking, commercial banking, credit cards, retail banking, and wealth management. The diversified model lets it capitalize on every part of the cycle and spread technology costs over a base of clients no competitor can match. Higher rates have driven record net interest income. Forward yield 1.90% (5-year average 2.35%), 15-year streak, payout 28.85%. JPM is the rare US bank I would want in a dividend portfolio.

Bank OZK (OZK): PRO 4 | Safety 4

Investment thesis: Bank OZK is a specialized regional bank led by CEO George Gleason since 1979. Its Real Estate Specialties Group runs disciplined construction and bridge lending on large commercial real estate projects, and the bank is scaling a Corporate and Institutional Banking division that has grown from 18 to 97 employees across 42 industry niches. Net interest margin sits at 4.20%, one of the strongest in regional banking. Forward yield 3.90% (5-year average 3.45%), 27-year streak, payout 28.35%. A regional bank with a dividend track record most US banks cannot match.

Best US Stock Exchange and Financial Data

S&P Global (SPGI): PRO 4 | Safety 4

Investment thesis: S&P Global is the dominant financial information business in the world. Credit ratings, indices, market intelligence, and commodity insights live inside the financial system itself. The S&P 500 is licensed by every major ETF issuer. Forward yield 0.90% (5-year average 0.80%), 52-year streak (Dividend King), payout 26.15%. The longest streak in the group.

CME Group (CME): PRO 4 | Safety 4

Investment thesis: CME Group is the leading US derivatives exchange operator, with a near-monopoly in US futures and options across interest rates, equities, FX, commodities, and metals. CME holds a 27% stake in S&P Dow Jones Indices and is the exclusive venue for S&P futures trading. The dividend structure pairs a regular quarterly with an annual variable special, so the headline forward yield (0.00%) understates total cash return: the 5-year average yield sits at 2.05% and the 18-year streak shows total dividend growth even when the special varies. The most defensible balance sheet in the sub-sector.

Nasdaq (NDAQ): PRO 4 | Safety 4

Investment thesis: Nasdaq operates the actual exchange and a large analytics and anti-financial-crime software business. Listing fees provide recurring revenue, and the data + tech segments add pricing power. Forward yield 1.35% (5-year average 1.30%), 11-year streak, payout 33.60%. The cleanest way to own a US stock exchange.

Best US Insurance

Chubb (CB): PRO 4 | Safety 4

Investment thesis: Chubb is the largest commercial property and casualty insurer in the world, with global reach and a focus on high-net-worth personal lines. The model is the closest US analog to Intact (IFC.TO), my preferred Canadian insurer. Forward yield 1.20% (5-year average 1.40%), 30-year streak, payout 14.75%, beta 0.44. Low yield, low beta, and a very conservative payout ratio.

H3: Travelers (TRV): PRO 4 | Safety 3

Investment thesis: Travelers is a pure-play US property and casualty insurer with strong commercial lines and personal auto exposure. Underwriting discipline has held up through hurricane seasons and the inflation cycle. Forward yield 1.65% (5-year average 1.85%), 21-year streak, payout 15.80%. A solid backup for investors who want US-only P&C exposure.

Best US Asset Managers

BlackRock (BLK): PRO 4 | Safety 4

Investment thesis: BlackRock is the largest asset manager in the world, with size and scale no competitor can match. The Aladdin technology platform adds a recurring software business inside the asset manager, and the 2024 Global Infrastructure Partners acquisition gave BLK a $150B+ private markets footprint. Forward yield 2.15% (5-year average 2.30%), 14-year streak, payout 58.80%. Management raised the dividend by 10% in 2026 after a quiet stretch.

Main Street Capital (MAIN): PRO 3 | Safety 3

Investment thesis: Main Street Capital is a Business Development Company that lends to and invests in lower-middle-market US companies. The model pairs a monthly distribution with annual special dividends, supported by an in-house underwriting team focused on first-lien senior secured structures and an exceptionally low operating-expense-to-assets ratio. MAIN compounded NAV through cycles and only missed a special dividend in 2020. Forward yield 5.60% (5-year average 6.05%), 13-year streak, payout 76.85%. The 3/3 rating reflects BDC structural risk: this is a yield play, not a sleep-easy stock.

Bonus: payment networks

I cannot write about US financial stocks without flagging Visa (V) and Mastercard (MA). Both score PRO 5 / Safety 5: top of the class. They operate in a duopoly protected by global merchant adoption, and they are money-printing machines with very low capital intensity. Technically classified as Credit Services rather than banks or asset managers, but ignoring them in a US financial article would be a mistake.

Visa moves over $15 trillion in annual transaction volume across 200+ countries, with over 50% global market share. The asset-light model earns a fee on every swipe, tap, or click, with an operating margin of around 67% and an ROE of 52.75%. Forward yield 0.80% (5-year average 0.80%), 14-year streak, payout 23.35%. The moat sits in network effects across 14,500 financial institutions and over 50 million merchants.

Mastercard processed over $8 trillion in payments in 2024 and grows faster than Visa despite being the #2 player. ROE of 210.50% reflects the asset-light, low-capital-intensity model. Cross-border transactions remain the most profitable segment, and management is targeting 12% compound annual revenue growth through 2029, with cybersecurity (the $2.65B Recorded Future acquisition), tokenization (around 40% of transactions), and AI services layered on top. Forward yield 0.70% (5-year average 0.60%), 12-year streak, payout 18.95%.

The Ultimate Safe List to Get Dividend Growth Stock Ideas

To help you build a solid portfolio with dividend growth stocks, I have created the Dividend Rock Stars List, showing about 300 companies with growing trends.

You can read on to understand how it is built and why it’s the ultimate list for investors, or you can skip to the good stuff and enter your name and email below to get the instant download in your mailbox.

The verdict

Canadian banks and insurers remain my preferred dividend ideas in the financial sector. The oligopoly structure, the regulatory protection, and the long dividend track records are hard to beat.

But the US has real heavyweights worth owning. JPMorgan for banks. S&P Global for the financial data and exchange angle. Chubb for global property and casualty insurance. BlackRock for asset management. And Visa or Mastercard, if you want a money-printing machine on top.

Your portfolio has finite room. Pick the one or two names whose thesis you actually understand, then hold them long enough for the dividend growth to do its work.

The post The Best US Financial Stocks for a Dividend Growth Portfolio appeared first on The Dividend Guy Blog.

In 2016, I made a life-changing decision: I took a sabbatical, put my family in a small RV, and we drove all the way to Costa Rica.

Upon my return in 2017, I officially quit my job as a private banker at National Bank and started working full-time on my baby: Dividend Stocks Rock. I also decided to manage my pension account held at the National Bank. I’ve built and managed this portfolio publicly since 2017 to create and track a real-life case study.

In August 2017, I received $108,760.02 in a locked retirement account. Locked means I can’t add capital to the account, and growth is only generated through capital gains and dividends. I don’t report this portfolio’s results to brag about my returns or to suggest you follow my lead. My purpose has been solely to share with our members how I manage my portfolio with all the good and the bad that inevitably takes place each month. I hope you have learned and will continue to learn from my experiences managing this portfolio.

Retirement Webinar Coming Up!

At the end of 2024, I launched Retirement Loop, a membership site for Canadians building or stress-testing their retirement plan. The community grew to 500+ members fast. I had to close the doors to focus on helping those members.

I will reopen the doors for 10 days in May, starting with a free webinar on May 21st.

The topic: the 5 retirement plan vulnerabilities that quietly derail retirement plans that look perfectly solid on paper.

Click here to register for the free webinar on May 21st.

www.retirementloop.ca/webinar

But first, the results!

Performance in Review

Let’s start with the numbers as of May 5^th, 2026 (before the bell):

Original amount invested in September 2017 (no additional capital added): $108,760.02.

• Current portfolio value:$331,857.62
• Dividends paid: $5,699.84 (TTM)
• Average yield: 1.72%
• 2025 performance: +7.34%
• VFV.TO= +12.18%, XIU.TO = +28.88%
• Dividend growth: +1.5%

Total return since inception (Sep 2017- November 2025): +205.13%

Annualized return (102 months): 14.02%      

Vanguard S&P 500 Index ETF (VFV.TO) annualized return (since Sept 2017): 16.18% (total return 257.70%)

iShares S&P/TSX 60 ETF (XIU.TO) annualized return (since Sept 2017): 13.14% (total return 185.60%)

Brookfield does it again

If you hold corporate shares of Brookfield Infrastructure (BIPC) or Brookfield Renewable (BEPC), you probably noticed a big drop in their stock price (about 12% in a single day!). However, if you have the unit version (BIP or BIP.UN.TO), you only noticed a small dent.

Historically, there is a premium paid for the corporate class shares. That is explained by the additional demand for holding shares rather than units from a tax perspective. Institutional investors (mutual funds, pension plans, ETFs, banks), will prefer to hold corporate class shares to avoid dealing with a different tax structure.

So, what happened? Brookfield doing a Brookfield thingy.

The ATM program: what it is and why it matters

In November 2025, Brookfield Infrastructure launched an at-the-market equity issuance program (ATM) for BIPC, with a ceiling of $400 million in BIPC shares sold from treasury at prevailing market prices. By the end of Q1 2026, BIPC had issued 3.8 million shares through this program, raising roughly $180 million.

Here is the key detail: the proceeds are used directly to repurchase BIP limited partnership units on a 1-for-1 basis. BIPC issues new corporate shares, takes the cash, and uses it to buy back BIP units. The combined count of LP units and BIPC shares outstanding is intended to remain roughly the same. The ATM program is structured to be non-dilutive in aggregate.

Why go through this exercise at all? BIPC shares and BIP units are designed to be economically equivalent. Each BIPC share can be exchanged for one BIP unit. They pay the same distribution. They represent the same underlying assets. The difference is structural.

BIP is a limited partnership, which creates tax complexity for certain investors, particularly Americans who receive K-1 forms and institutional investors barred from holding partnership units.

BIPC is a Canadian corporation that trades like a regular stock, pays dividends instead of distributions, and generates T5 or 1099-DIV forms. By shifting the capital mix from BIP units toward BIPC shares, Brookfield expands its eligible investor pool and increases the float of the more broadly investable security.

The bigger picture: a possible full consolidation

The ATM program is the opening move in what may become a more significant structural change. During the Q1 2026 earnings call, Brookfield management disclosed they have begun exploring whether BIP and BIPC should merge into a single combined corporate structure. The stated goals are to improve liquidity, increase index inclusion, and create value for investors on a tax-free basis. Management was clear that this is early-stage work with no timeline attached.

This is worth watching. BIP has been a limited partnership since its inception. A conversion to a pure corporate structure would be one of the more significant structural changes in the company’s history. It would likely increase BIPC’s eligibility for broad equity index inclusion, which would bring in a wave of passive fund buying. Index inclusion is not a trivial event for an infrastructure stock of this size. It would also simplify the tax reporting experience for a large segment of the current unitholder base.

The risk is execution. Any reorganization of this scale requires shareholder votes, regulatory approvals, and careful structuring to maintain the promised tax-deferred treatment. The 2024 reorganization of BIPC to address Canadian tax law changes gives some confidence that management knows how to run this process. But the complexity is real, and investors should not treat the announcement as a certainty.

What this means for you as a DSR member

The Q1 2026 earnings selloff was not a signal that Brookfield Infrastructure’s business is deteriorating. FFO grew 10%. Data segment FFO grew 46%. The company recycled $1 billion in capital in the first quarter alone and is on track toward its 2026 recycling targets. The dividend is growing.

The selloff was driven by three overlapping factors. First, IFRS accounting made the headline net income look terrible while the cash performance was strong. Second, Morgan Stanley’s downgrade gave institutional investors a reason to reduce exposure. Third, the ATM share issuance program, even if non-dilutive in aggregate, creates a visible supply of new BIPC shares in the market that can weigh on price in the short term.

None of these factors change the fundamental investment case. BIPC owns regulated and contracted infrastructure assets across utilities, transport, midstream, and data. Those assets generate predictable cash flows, and those cash flows support a growing dividend. The 7% dividend increase announced not too long ago alongside Q1 2026 results is consistent with the company’s long-term guidance of 5-9% annual distribution growth.

The share structure evolution toward a single corporate entity, if it proceeds, would likely be a long-term positive for BIPC and BEPC shareholders. More index inclusion means more demand. A simpler structure means fewer barriers for institutional capital. These are not reasons to buy the stock today, but they are reasons not to confuse an accounting-driven selloff with a business-driven one.

The underlying Dividend Triangle remains intact. Revenue is growing. FFO per unit is growing. The dividend is growing. If you hold BIPC or BEPC for its income and long-term compounding, nothing about Q1 2026 changes the story.

Stocks are down double-digit after earnings – What the…

As you know, we are in the middle of the earnings season. Dozens of companies are reporting each day. It brings its fair share of fluctuations.

Recently, I received a lot of emails about the Brookfields, as well as about CGI and Capital Power. Those stocks were down between 7.5% and 12% on earnings day.

I get it, it hurts when a stock is down by that much. We want to know if it will get worse or if there is something that we have missed.

But most of the time, it’s just noise.

It’s important to do due diligence, and you are right to email me with questions. I do my best to answer all of them through webinars, podcasts, or I even started recording special videos and send them to PRO members who hold the specific company in their portfolio.

It’s also important to look at the big picture. For example, I do hold CGI, but it’s about 1% of my portfolio. Will it destroy my retirement plan if the stock is down 50%? Not really.

That’s the reason why I don’t look at daily, weekly even monthly stock price movements. Someone told me, “Ah! BICP is back up 3% today, I missed the buy”.

Would 3% make a difference over 25 years? Not really. In fact, even a 10% over 25 years isn’t that significant.

We all love a good deal, but you won’t find them by tracking daily price movements.

Unfortunately, I’ve noticed the market has become quicker to jump to conclusions. Around the same time that some stocks were down double-digit, I saw Visa, Automatic Data Processing and Waste Connection jumping by 8% each.

It seems larger volume of trades are programmed to be executed on earnings reports. It’s either “really good or really bad”. But if you wait a little bit longer, you will notice that great companies always come back.

I will end by telling you I have received zero emails about V, ADP and WCN…

Smith Manoeuvre Update

The portfolio shows 13 companies spread across 8 sectors. My goal is to build a portfolio of thriving companies with a solid dividend triangle (e.g. with positive revenue, EPS and dividend growth trends). The current portfolio yield is at 2.09% with a 5-year CAGR dividend growth rate of 11.93%.

• The portfolio value is now at $34,919.00
• The portfolio debt is at $27,000.
• Interest paid since April 2022: $2,329.91
• Monthly contribution is set at $1,000/month.
• The annual income is $730.26, and the projected income is $814.25
• To report my Smith Manoeuvre, I export the Excel data from my DSR PRO dashboard.

The portfolio is on its way towards generating an extra $1,000 per year in dividends. I’m not there yet, but it will happen in the first months of 2027! By then, my portfolio will be close to $50,000! That will be exciting to see a 13^th influx of $1,000 to boost the portfolio!

Smith Manoeuvre Portfolio Summary

Here’s my SM portfolio summary as of May 5^th, 2026 (before the bell):

$1,000 invested in CGI

CGI reported a good quarter with revenue up 3.3% to $4.16B and diluted EPS up 10.6% to $2.09. Revenue growth was driven by acquisitions: BJSS boosted U.K. and Australia revenue by 16.5%, and Apside pushed Western and Southern Europe up 8.3%. The U.S. Federal segment remained pressured by decision-making delays but posted a 122% book-to-bill ratio which signaled a return to positive organic growth in Q3. Bookings were $4.31B (103.8% book-to-bill) and backlog reached $31.5B, or 1.9x annual revenue. CGI’s AI-first strategy is attracting demand across multiple industries and geographies.

Pension Portfolio Summary

Here’s my pension plan portfolio summary as of May 5^th, 2026 (before the bell):

Total value: $331,857.62 (+$10,450.74, +3.25% from last month).

Automatic Data Processing shows no sign of AI panic

ADP reported a strong quarter with revenue up 7% and adjusted EPS up 12%. Employer Services grew 7% to $3.3B on strong client retention and new business bookings. PEO & HCM Services grew 7% to $1.6B. Interest on funds held for clients added $171M (+13%). Adjusted EBIT margin expanded 80bps to 28.3%. EPS benefited from a lower tax rate. ADP raised full-year revenue guidance to 6-7% growth and adjusted EPS guidance to 10-12%. ADP Assist, its AI assistant, is now embedded across HCM workflows with millions of active users.

Brookfield Renewable generates FFO growth

Brookfield Renewable reported a strong quarter with revenue up 27% and FFO per unit up 10%. Hydroelectric generation reached 8,024 GWh, Wind generated 4,165 GWh, Solar contributed 3,946 GWh, and Distributed Energy & Sustainable Solutions added 1,527 GWh. Total generation hit 17,662 GWh for the quarter. The strong FFO growth was driven by higher generation volumes, inflation-linked contracted revenue increases, and margin enhancements from asset optimization. BEPC added 7 GW of new capacity in 2025. Quarterly dividend held at $0.355/unit after a 5% increase in February 2026. No specific revenue or FFO guidance was provided for 2026.

Fortis as boring as it gets

Fortis delivered a solid Q1 2026, with net earnings of $501M ($0.99/share basic), essentially flat versus $499M a year ago. Revenue rose to approximately $3.4B from $3.3B in Q1 2025, reflecting continued rate base expansion across its regulated utility portfolio. Capital expenditures reached $1.4B in the quarter, tracking toward the full-year $5.6B plan and the $28.8B five-year capital program. The 2026–2030 plan targets a 7% rate base CAGR, growing mid-year rate base from $42.4B to $57.9B by 2030. Management’s 4–6% annual dividend growth guidance through 2030 remains intact, and the $0.64/share quarterly dividend continues. Q1 results met expectations.

Granite REIT improves its payout ratio

Granite REIT posted solid Q1 2026 results. FFO rose to $1.57/unit (+7.5% from $1.46 in Q1 2025) while AFFO held flat at $1.41/unit, impacted by higher maintenance capex. Revenue grew to $165.8M from $154.7M (+7.2% YoY), driven by new leasing activity, contractual rent adjustments, CPI-based increases, and eight US/UK acquisitions made in 2025. Same-property NOI on a constant currency basis grew 8.3%. In-place occupancy was 97.5%, with committed occupancy at 98.3% as of May 6. Granite maintained its 2026 guidance: FFO $6.25–$6.40/unit, AFFO $5.40–$5.55/unit. AFFO payout ratio improved to 63% from 66% in Q1 2025.

LeMaitre Vascular raises guidance

LeMaitre Vascular reported a strong quarter with revenue of $66.6 million, up 11%, and adjusted EPS of $0.68, up 42%. All three geographic regions posted record sales, with EMEA up 20%, APAC up 18%, and Americas up 7%. Grafts led product growth at 20%, followed by valvulotomes at 15% and carotid shunts at 11%. Gross margin reached 72.7%, reflecting strong pricing and product mix. The company raised its full-year 2026 guidance to 12% revenue growth and 26% EPS growth. LMAT compounds steadily through acquisitions and organic growth, supported by a sticky hospital customer base and durable pricing power.

Microsoft disappoints with earnings up 21% (really?)

Microsoft reported a strong quarter with revenue up 18% and adjusted EPS up 21%. Intelligent Cloud led with $34.7B (+30%) as Azure grew 40%. Productivity and Business Processes reached $35.0B (+17%) on Microsoft 365 momentum. More Personal Computing declined to $13.2B (-1%). Microsoft Cloud revenue hit $54.5B (+29%). AI annualized revenue surpassed $37B, up 123%. GitHub Copilot now has 15 million paid users. Operating income grew 16% to $32.0B. Commercial remaining performance obligation surged 110% to $315B. MSFT invested $30.9B in CapEx to support AI and cloud infrastructure build-out. Q4 guidance calls for $86.7B-$87.8B in revenue.

Stella-Jones misses the mark

Stella-Jones posted a mixed Q1 2026. Revenue grew 2.3% to $791M but missed consensus of $819.78M by 3.5%. Adjusted EPS of $1.12 fell 2.6% from $1.15 a year ago and missed consensus of $1.25 by $0.13. Utility Products delivered strong results, driven by sustained demand for wood utility poles and secured contractual commitments. This sales growth was tempered by a decline in pricing, primarily due to a shift in product mix. Residential lumber and industrial products were softer. SJ’s infrastructure-linked business remains durable, though near-term results reflect a softening outside utility poles and some execution headwinds versus analyst expectations.

Toromont Industries continues to surprise

Toromont reported a strong quarter with revenue up 13% and basic EPS up 24%. Equipment Group grew 14% to $1.13B on healthy new and used equipment sales, strong rentals, and solid product support activity. CIMCO added $99M (+3%). Operating margin expanded to 11.6% from 9.1% as AVL enclosure production ramped to support data center requirements in eastern U.S. Bookings surged 44% to $793M and backlog reached $1.7B. Net earnings reached $92.7M (+25%) and operating income grew to $143M (+42%). The balance sheet remained strong with good cash generation.

Visa is… well Visa!

Visa reported a strong quarter with net revenue up 17% to $11.2B and non-GAAP EPS up 20% to $3.31, which was the highest revenue growth since 2022. Payment’s volume grew 9%, cross-border volume ex-intra-Europe rose 11%, and processed transactions increased 9% to 66.1B averaging approximately 730 million per day. Consumer spending remained resilient across geographies. Visa repurchased $7.9B in shares, its largest quarterly buyback, and authorized a new $20B program bringing total buyback capacity to approximately $33B. The quarterly dividend held at $0.670/share. Full-year FY2026 guidance was raised to low double-digit to low-teens revenue and EPS growth.

Waste Connections is no trash

Waste Connections reported a solid quarter with revenue up 6% and EPS up 9%. By line of business, solid waste collection remained the core at $1.7B (about 72% of revenue, up from $1.6B), solid waste disposal and transfer was $386.1M (+6.6%), solid waste recycling was $51.6M (-13%), E&P waste was $179.6M (+19.5%), and intermodal and other was $48.9M (+6%). Management attributed the growth mix to $55.3M of net acquisition contribution in the quarter plus 3.1% organic growth in solid waste, led by 6% core price and 4.7% yield, partly offset by unit volume down 1.5% (with weather called out as a factor) and a small headwind from recycling.

Adding 6.5 shares of Dollorama (DOL.TO)

I had about $1,000 in my cash account (thank you, dividends!), and I benefited from price weakness to buy more of DOL.TO. I considered adding more of Broadcom (AVGO) as mentioned last month. However, at the time of doing the trade, AVGO was sitting at my target of 3% weight while DOL was at 2.65%.

I would have been happy either way.

My Entire Portfolio Updated for Q1 2026

Each quarter we run an exclusive report for Dividend Stocks Rock (DSR) members who subscribe to our very special additional service called DSR PRO. The PRO report includes a summary of each company’s earnings report for the period. We have been doing this for an entire year now and I wanted to share my own DSR PRO report for this portfolio. You can download the full PDF showing all the information about all my holdings. Results have been updated as of April 7th^, 2026. Next quarterly report will be available in July.

Download my portfolio Q1 2026 report.

Dividend Income: $369.98 (+20.1% VS. April 2025)

Another month with more dividends than last year! I added shares of ADP + all companies paid more in dividends vs. last year. That’s the power of dividend growth investing!

Since I started this portfolio in September 2017, I have received a total of $36,112.67 CAD in dividends.  Keep in mind that this is a “pure dividend growth portfolio” as no capital can be added to this account other than retained and/or reinvested dividends. Therefore, all dividend growth is coming from the stocks and not from any additional capital being added to the account.

Final Thoughts

We are now entering the famous “Sell in May and go away” period. The only thing I can say about this saying is that we have been expecting the market to burst in our face for the past 3 years. I’m the first one surprised to see green across the board so far this year again.

As long as your companies report growth, your portfolio will be fine. No matter what the media tells you.

Cheers,

Mike.

The post Portfolio Update – April Dividend Income Report appeared first on The Dividend Guy Blog.

But “own a railroad” is not a strategy. You need to pick the right one.

Three names dominate the North American market: Canadian Pacific Kansas City (CP), Canadian National Railway (CNR), and Union Pacific (UNP). Same industry, same moat, three different profiles.

Here is how I rank them, and why.

Disclosure: I own CNR in my portfolio. I do not own CP or UNP. This is education, not advice. Do your own due diligence.

How I compare railroads

Before I rank anything, I run every candidate through the same four-step checklist:

1. The Dividend Triangle: revenue growth, EPS growth, and dividend growth over five years. All three need to be positive and aligned.
2. Dividend safety: payout ratio, cash payout ratio, and dividend history. I want room to grow and a clean track record.
3. Balance sheet: debt to EBITDA, credit score, and current ratio. A leveraged railroad in a recession is not fun to hold.
4. Yield vs. history: if the forward yield sits above the 5-year average, the stock may be offering better income value than usual.

No spreadsheet tricks. Just discipline.

The scorecard

Source: Dividend Stocks Rock stock cards, Q1 2026 review.

Now, let me walk through why each one lands where it does.

#3: Canadian Pacific Kansas City (CP)

Investment thesis: CPKC is a capital appreciation story, not a dividend story. Management runs the business for total return rather than a growing paycheck.

CPKC has the best growth story in the group. The 5-year revenue number is inflated by the Kansas City Southern acquisition, but the thesis is real: a single-line network linking Canada, the United States, and Mexico, with access to Gulf Coast ports and Mexican trade flows no competitor can match. This integration is now delivering gains in the operating ratio. Cash flow benefits from demand for bulk commodities (grain, fertilizer, metallurgical coal).

So why is it third?

Because CP is not a dividend grower. Management has paused dividend growth multiple times over the past decade. The current dividend streak is one year. The 5-year dividend growth rate is 4.40%, below both CNR and UNP.

If you want a dividend paycheck that grows every year, it does not belong on your shortlist.

#2: Union Pacific (UNP)

Investment thesis: UNP owns an irreplaceable Western U.S. rail network with exclusive access to Asia trade flows through West Coast ports and all six U.S. to Mexico gateways. Coal volumes are in secular decline, but other goods are rebounding. The proposed Norfolk Southern acquisition could add $2.75B in synergies if regulators approve it (decision expected by early 2027), but adds integration risk and regulatory uncertainty. The business is cyclical and tied to the global economy.

The dividend story is where it loses points.

UNP used to be a dividend growth machine. Since 2022, the policy has been hectic. A pause during COVID. A generous post-COVID increase. Another pause in 2023. Two 3% increases in 2024 and 2025. The 3-year dividend growth rate has slowed to 1.75%. The forward yield sits below the 5-year average, suggesting the stock is not offering better income than usual.

UNP also has the lowest credit score and the highest debt-to-equity ratio of the three.

Solid business. Choppy dividend growth policy. That combination keeps it out of first place.

#1: Canadian National Railway (CNR)

Investment thesis: CN runs the only three-coast rail network in North America, connecting the East, the West, and the Gulf of Mexico via the U.S. Midwest. Precision scheduled railroading delivers industry-leading efficiency, and exclusive access to the Port of Prince Rupert is a structural advantage for trade between Asia and North America. Growth comes from pricing power above inflation, new customer projects, and intermodal expansion. 2025 was soft on tariff-induced industrial weakness, and 2026 guidance points to flattish volume with stronger EPS growth, implying continued margin gains in a muted demand environment.

CNR wins on the dividend triangle and the dividend history.

The triangle is balanced: 4.62% revenue growth, 8.63% EPS growth, 8.49% dividend growth over five years. The dividend has been raised every year since 1996. That is 30 consecutive years of increases through recessions, rail strikes, and pandemics. The forward yield sits at 2.40%, above the 5-year average of 2.15%. That is a signal the stock may be offering better income value than usual.

Payout ratios are reasonable (46.78% classic, 61.84% cash), margins are strong (ROE 22.15%, ROIC 9.26%), and the balance sheet carries an investment-grade credit score of 89. CNR also runs the lowest beta of the three (0.99), which matters when the economy wobbles.

The watch-item: management slowed the dividend growth rate to 5% in 2025 and announced a 3% increase for 2026. If that trend continues, the Dividend Safety Score could be downgraded in 2027. I am watching the next two dividend announcements.

For now, CNR is the railroad I want in a dividend growth portfolio.

The verdict

If you want one railroad for dependable dividend growth, CNR is my pick.

If you want growth optionality and you do not need the income, CP is worth a look.

If you want world-class margins but you can live with a choppy dividend policy, UNP fits.

All three are great businesses. Only one fits a dividend growth thesis without compromise.

The post CP vs CNR vs UNP: Which Railroad Belongs in Your Dividend Portfolio? appeared first on The Dividend Guy Blog.