I see buying and selling as two sides of the same coin. The reasons you use to buy a stock should be the same reasons you use to sell it. Get that right and you stop trading on price swings.

Ask yourself this. Does it make sense to sell a stock because it dropped 25%, while refusing to buy another because it climbed 25%? It doesn’t. Yet that is how most portfolios get managed.

You don’t need a CFA. You don’t need a dozen spreadsheets. You need a repeatable way to look at a business. Here is mine, in three parts: identify, understand, take action.

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

Identify: start by eliminating

The first step of stock analysis is not research. It is elimination.

You cannot review 9,000 public companies. So you need a starting point. The easiest way is to pick your cherries from the best fruit basket. That is why I focus on dividend growth stocks. Those companies have already proved that their models work. They throw off enough cash to pay shareholders and keep growing the business.

There are many doors into that basket. Here are the eight I see most often.

Where good ideas come from

1. Top-down. You start with the big picture, the economy, rates, geopolitics, then narrow to the sectors that benefit, then to individual names. “Rates are falling, so utilities and REITs may benefit, so I will look at quality names there.” It works when your macro call is right, which is harder than it sounds.
2. Bottom-up. You ignore the macro noise and hunt for great businesses one at a time. You look at revenue, earnings, and dividend growth. The dividend triangle lives here. A great business compounds through most environments, so why try to time the economy?
3. Stock screeners. You set your criteria and let the screener hand you a shortlist. This is a tool, not a strategy. It fits inside top-down or bottom-up. The catch: a screen only sees what is quantifiable, so the qualitative work still falls on you.
4. Observation. You notice the line is always out the door at Starbucks and start there. I never use it. I have been a BCE customer for ten years and never wanted a single share.
5. Peer and competitor analysis. You own a company you like, so you study its rivals and suppliers. Back in 2016, I bought Amazon after comparing Walmart, Target, and Amazon. Amazon won that round. It sat in my portfolio as a rare non-dividend payer for years.
6. Thematic investing. You pick a long-term trend you believe in, aging demographics, AI infrastructure, the energy transition, and find the companies riding it. Top-down, but built on structural shifts instead of the cycle.
7. Following smart money. Insider buying and fund manager filings can spark ideas. They are dangerous as recommendations. I avoid them. I can never know why an insider sells. The company might be in trouble, or they just want to buy a villa.
8. News and events. Spinoffs, dividend hikes, earnings surprises, 52-week lows on quality names. I call this FOMO investing. A recent headline can’t taint how you see the next ten years.

My own approach combines two of these. I start with a screener to surface companies with a strong dividend triangle. Then I sort my research by sector, based on what I already own and which themes could move the market over the next five to ten years.

Read the dividend triangle first

The dividend triangle is not three financial metrics. It is a ten-year story about a business.

The three lines are revenue growth, earnings growth, and dividend growth. If you can explain why each one moved the way it did, you know the company inside out.

Revenue tells you how the company grows. A big jump usually means an acquisition. A flat line means a struggling business, often paired with a fat yield. A roller coaster means you are looking at a cyclical name.

Earnings, read against revenue, tell you about margins and cash flow. When earnings lag revenue, free cash flow tends to lag too. When revenue is soft but earnings still climb, the company is squeezing out efficiency. That is fine, but it cannot last forever. Sooner or later, sales have to grow.

Dividend growth tells you how confident management is. When the raises slow down, dig in. Sometimes it is prudence ahead of a storm. Sometimes it is a structural crack.

The relationship between the three matters most. I do not like seeing earnings grow 4% while the dividend jumps 8% to 10% a year. That pushes the payout ratio higher every year, and it does not last. In a perfect world, all three grow at the same pace. Easier said than done.

That one chart covers about 80% of the work.

Understand: build your conviction

The first part was about numbers. I look at the numbers before I fall in love with the story. Numbers speak louder than words.

Once the numbers make sense, it is time to understand what I am about to own. Before I click buy, I write down my investment thesis. That is my tool for conviction. Once you have looked at a business from every angle, you stop checking the market every day.

Here is my test. You should be able to explain the good and the bad of a business to a 12-year-old. If you can’t, you do not understand how the company makes money or what could break it.

Write the bull case (Costco Case)

Your thesis is the list of reasons you like the company. Break it into three blocks.

Playbook. How does it make money? The structure, the core products, the operational edge. Costco sells staples in bulk at thin margins and collects membership fees. Over 70% of operating income comes from those fees. That makes revenue predictable and keeps customers loyal.

Growth vectors. What drives future revenue and earnings? Costco continues to expand overseas, with strong results in Asia. Its e-commerce and same-day delivery are gaining ground. It keeps opening warehouses in North America. The map is not full yet.

Economic moat. Why can it defend its share and its margins? Costco’s moat is cost leadership and loyalty. Renewal rates top 90%. Its scale lets it squeeze suppliers and pass the savings on, which protects its reputation for low prices.

Write the bear case (Costco Case)

Every company has a downside. Writing it out helps you stay calm when the stock drops, because you will know whether the market is wrong or the business is. Break the risks into three blocks.

Business vulnerabilities. The internal cracks. Costco leans on physical traffic and a narrow product range. A supply chain shock or cost inflation could compress margins fast. The stock is also priced for perfection. Miss a quarter and it can fall more than 20% in a year.

Industry and market threats. Zoom out. A long stretch of high inflation could erode Costco’s pricing edge. Wage inflation could pressure its cost base more than that of rivals that outsource labor.

Competitive landscape. Who is gaining or losing ground? Walmart and Amazon press on grocery and e-commerce. This block is also where you might find a better idea. Study Costco against Walmart and you may decide Walmart is the stronger buy.

Dividend safety is dividend growth

Now the question that matters most. Will I get paid, and will my paycheck grow every year?

For me, dividend safety and dividend growth are the same thing. A safe dividend has to rise. If a company can’t raise its payout, the dividend is already low quality.

Picture retiring in 2006 on a portfolio paying $30,000 a year. Now, picture that payment never moving. To buy today what $30,000 bought back then, you need about $49,581. A frozen dividend is a 40% cut to your lifestyle.

The first check is a healthy dividend triangle. Then look at how the dividend has climbed year after year, and watch the payout ratio over time. If earnings grow as fast as the dividend, the payout ratio holds steady. That is the goal.

When the numbers leave a gap

The dividend triangle and the standard metrics answer most of your questions. Sometimes you finish and still have a gap. A number that makes no sense. A trend you can’t explain.

That is not a problem. It is a signal worth following.

Before you move to valuation, ask yourself five questions:

1. Do I understand where the revenue comes from and why customers pay for it?
2. Can I explain why the earnings trend looks the way it does?
3. Do I know the main competitors and why this company wins or loses against them?
4. Is there anything in the debt or balance sheet I cannot explain?
5. Has anything changed in the last two years that the numbers have not caught up to yet?

If you answer “no” or “not sure” to any of them, that is where your next 20 minutes go. Start with cash flow from operations, free cash flow, long-term debt, and the payout ratio. Then read the financial statements until you have a clear answer.

Take action: valuation is context, not the trigger

Valuation is not the trigger. It is the context.

The best business in the world bought at a crazy price will lag for years. A solid business bought at a fair price compounds. That is the whole game. Not the cheapest stock. A quality business at a fair price.

Here is the hard part. You will never know for sure whether the price is too high or too low. Fancy models can boost your confidence, but they all run on assumptions. Plenty of the stocks I bought at all-time highs and “ridiculous” valuations turned into my best performers.

I use two checks to add context. They make valuation feel less like astrology.

Price-to-earnings against its own history. Compare today’s P/E to the company’s average over the past 5 to 10 years. Not the market. Its own record. If a name usually trades at 18 times earnings and sits at 14, that is a possible entry. If it trades at 26 with no change in growth, you are paying up for nothing.

Always ask why the discount exists. The business or the environment might be changing. BlackBerry once traded under 8 times earnings, with no debt and $4 billion in cash, right before the iPhone buried it.

Dividend yield against its own history. Same logic. If a stock typically yields 2.5% and now yields 3.5%, its price has fallen relative to its dividend. If nothing changed in the business, you may be looking at a fair entry.

Together, these two give you a clear yes-or-no answer without a spreadsheet.

Then there is the waiting trap. Holding out for the perfect price is one of the most expensive habits in investing. If the business is strong, the thesis is solid, the risks are clear, and the valuation is reasonable, the move is usually to start a position.

You do not need to buy the bottom to make money. You only need to avoid a price that makes a good return almost impossible. Stop using uncertainty as an excuse. There will always be uncertainty. Great companies survive, adapt, and thrive anyway.

Full Process in Only Three Parts!

You now have a full stock analysis process in three parts: identify, understand, take action.

It is not the most sophisticated method out there. It works, you can run it in one to two hours per stock, and it has held up through every market I have seen in the last decade.

The investors I have watched win over the long run do not own the best spreadsheets or the fastest news feeds. They follow a repeatable process, stay calm when markets turn emotional, and let the numbers lead instead of the headlines.

Process beats instinct. Numbers beat narratives. Conviction beats hope.

One last note before I let you go. You will make mistakes. You will hold losers. Once you accept that and start judging your portfolio as a whole rather than 30 separate bets, investing gets a lot more fun.

Skip the Screening and Start With 300 Strong Candidates

Finding companies with a strong dividend triangle takes time. I built the Dividend Rock Stars List to give you a head start. It tracks about 300 dividend stocks with growing trends, already sorted so you can spot buy candidates faster.

Enter your name and email below and I will send the instant download straight to your mailbox.

The post How to Find and Analyze Stocks to Buy 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.

We Have a Valuation Problem

You know that I’m not a big fan of valuation models because they rely on assumptions. And you know what we say about assumptions…

However, I’m not blind either. In the past 30 years, the S&P 500 Shiller CAPE ratio has been at a higher level only once.

But first, the results!

Performance in Review

Let’s start with the numbers as of June 2^nd, 2026 (before the bell):

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

• Current portfolio value: $337,629.57
• Dividends paid: $5,299.15 (TTM)
• Average yield: 1.57%
• 2025 performance: +7.34%
• VFV.TO= +12.18%, XIU.TO = +28.88%
• Dividend growth: +1.5%

Total return since inception (Sep 2017- June 2026): +210.44%

Annualized return (103 months): 14.11%      

Vanguard S&P 500 Index ETF (VFV.TO) annualized return (since Sept 2017): 16.99% (total return 284.5%)

iShares S&P/TSX 60 ETF (XIU.TO) annualized return (since Sept 2017): 13.40% (total return 194.2%)

I don’t love valuation models because they rely on assumptions, and assumptions can be dangerous. But we still need to pay attention. Over the last three decades, the S&P 500’s Shiller CAPE ratio has been higher only one time.

The Shiller CAPE ratio (Cyclically Adjusted Price-to-Earnings ratio) is a valuation measure for the U.S. stock market popularized by Nobel laureate economist Robert Shiller of Yale. It’s also called CAPE, P/E 10, or the Shiller P/E.

However, it’s not necessarily a reason to panic… not just yet anyway!

• It is a terrible short-term timing signal. The market can stay “expensive” for years or even a decade (the late 1990s and most of the 2010s–2020s are examples). High CAPE does not mean a crash is imminent.
• The “normal” level may have shifted upward. Critics argue structural changes justify a permanently higher CAPE: lower interest rates, changes in accounting rules (e.g., write-down treatment that depressed reported earnings around 2008–2009), higher profit margins, more buybacks, and a different sector mix (more high-margin tech, fewer capital-heavy industrials).
• It says nothing about individual stocks — it’s a whole-market measure.

However, it’s not a reassuring level to say the least.

But the following graph got me thinking a little further.

Last week, I did two podcast episodes about Canadian Banks (you can watch them below). While I covered their most recent earnings (which were excellent), I noticed something: Canadian banks’ dividend yields were abnormally low.

From the top of my memory, I couldn’t remember the last time I saw so many banks with a yield under 3%. 4 Banks now look like they are growth stocks and BMO is not too far behind at 3.07%.

The two metrics I like to use to see if a stock is overvalued is the PE Ratio and the dividend yield vs. their historic averages. For Canadian banks, I didn’t have to calculate the average yield over the past 5 years. They are all clearly offering their lowest yield in history!

Those two graphs are saying pretty much the same thing: investors are paying a higher price than usual for stocks.

The real question is not whether the market is overpriced. The real question is:

Are investors changing their valuation perception?

Most of the time, Canadian banks trade around 11-13 times their earnings. The Forward PE (expected PE in 12 months) is now between 13 and 16! That means investors are paying a premium of 16/13 = 23% on banks like Royal Bank, TD Bank and National Bank.

On the other side, the Canadian bank business model has greatly evolved over the past 20 years:

• Expansion in the U.S. or internationally
• Massive growth of their wealth management business segment
• Massive growth of their capital markets business segment
• Banks are not just savings and loans anymore

Since banks are not what they used to be, it’s only normal to review what price we should be paying. Ironically, you will spend hours trying to find companies growing with high-single to double-digit numbers and still trading under a PE of 20 across the rest of the market.

Maybe a shift is happening in pricing, and it’s not just banks.

Priced for perfection

We see a lot of companies trading above 30 times their earnings. I often use the expression “priced for perfection”. This means investors expect companies not only to grow their revenue, earnings and cash flow by double-digits, but they also expect them to beat estimates like we expect Aaron Judge to hit a homerun every game, or Cole Caufield to score on a Saturday night.

When it doesn’t happen, the stock gets heavily punished. A good example is Microsoft. In the past 2 years, the stock is pretty much flat (+2.85% as of the beginning of June). However, MSFT’s revenue exploded by 30% and its EPS jumped by 40%.

In the last 12 months, the stock is down 8% while revenue is up 13% and EPS up 20.5%.

That is exactly what happens when a stock is priced for perfection.

What to make of it?

Good question, right?

At this point, I want to raise the question, but I don’t necessarily have a clear answer. I see too many pieces moving at the same time to determine if we are on the edge of a bear market or the edge of another strong bull run driven by efficiency.

I wish I had a clear answer to give you today, but I don’t. The market is clearly expecting a lot from companies right now, and that could lead to serious problems.

More than ever, the focus on quality companies that can withstand a massive crisis is central to my strategy. I certainly don’t want to make any wild guesses at this point.

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 1.91% with a 5-year CAGR dividend growth rate of 12.24%.

• The portfolio value is now at $36,839.47.
• The portfolio debt is at $28,000.
• Interest paid since April 2022: $2,431.58.
• Monthly contribution is set at $1,000/month.
• The annual income is $704.84, and the projected income is $791.13.
• 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 further!

Smith Manoeuvre Portfolio Summary

Here’s my SM portfolio summary as of June 2^nd, 2026 (before the bell):

Sold Brookfield Infrastructure, Bought Stantec

I sold my position in BIPC not because I don’t like the stock or that I’m spooked by recent movement, but rather in the optic of portfolio simplification. I didn’t hold BIPC anywhere else across all my accounts. Therefore, it was more of an “additional line” in my investment statement than it was a position playing a role in my portfolio.

By selling BIPC, I was able to add more Stantec at a depreciated price. I see this as a pretty good deal considering STN’s numbers aren’t slowing down while the price keeps on dropping. Its most recent quarter shows 9% revenue growth and 15% EPS growth. I will take that kind of results any day of the week!

I now have 33 positions across all my investments.

Pension Portfolio Summary

Here’s my pension plan portfolio summary as of June 2^nd, 2026 (before the bell):

Total value: $337,629.57 (+$5,771.95, +1.74% from last month).

Broadcom was priced for perfection…

Broadcom reported a robust quarter with record revenue of $22.2B (+48%) and adjusted EPS was up 85%. AI semiconductor revenue surged 143% to $10.8B, representing 49% of total revenue. Infrastructure software revenue was $7.2B (+9%). Management attributed the outsized growth primarily to accelerating AI-related semiconductor demand, noting AI semiconductor revenue of $10.8 billion that grew 143% YoY, driven by custom AI accelerators and AI networking. Despite the beat, the stock fell approximately 15% on June 4 on guidance disappointment as there are growing fears that many AI companies (such as Alphabet) are working on reducing their reliance on chip makers such as AVGO.

Brookfield keeps on generating cash

Brookfield Corporation reported a strong quarter with distributable earnings before realizations up 7% to $0.59/share and total DE of $0.66/share. Asset management led with DE of $765M and fee-bearing capital growing 12% to $614B, while wealth solutions contributed $430M at a 15% ROE and operating businesses $360M. Revenue grew 4% to $18.6B and net income surged to $1.0B from $215M. BN repurchased $470M of its own shares year-to-date at $41 average, a 38% discount to management’s $66 intrinsic value estimate, with $188B in deployable capital available. The BN-BNT merger is on track to close by year-end, combining $145B in permanent insurance capital with the platform.

CCL Industries shows good results from CCL and Avery segments

CCL Industries reported a good quarter with revenue up 2.8% to CAD $1.94B and adjusted EPS up 1.7% to $1.20. Growth was led by the CCL segment (+4.3%, organic +3.1%) and Avery (+4.3%, organic +2.4%), while Checkpoint was essentially flat (-0.2%) and Innovia declined 5.5% on volume weakness in the U.K. and Australia. An equipment outage at the Pennsylvania aluminum container facility constrained capacity for much of the quarter. Input cost inflation in resins and aluminum is being managed through supply chain levers and customer pass-throughs. CCL closed the quarter at 0.85x leverage with $999M cash, and the Sleever acquisition is expected to close in June 2026.

Home Depot is building slowly

Home Depot reported a decent Q1 FY2026 with revenue up 4.8% to $41.8B and adjusted EPS of $3.43, down 4%. Results were driven by the SRS Distribution acquisition adding incremental revenue, a 2.3% increase in average ticket size to $92.76, and continued strength in the Pro contractor segment. Comparable sales grew 0.6% overall (US +0.4%), reflecting stable underlying demand offset by a 1.3% decline in transaction count as consumers remained cautious on large discretionary projects. Gross margin contracted 75bps to 33.0% on higher acquisition-related costs. Management reaffirmed FY2026 guidance of total sales growth of 2.5-4.5% and flat to +2.0% comparable sales growth.

National Bank disappoints (WHAT???)

National Bank reported a good quarter with EPS up 13%, but it was the weakest performance of all 6 major Canadian banks!

Personal & Commercial was up 18%, driven by the growth in loan and deposit volumes, lower PCLs, but partly offset by a lower net interest margin. PCLs were down $257M, mainly due to initial PCLs of $230M on acquired non-impaired CWB loans recorded in 2025. Wealth was up 18%, driven by growth in all types of revenues, mainly fee-based revenues. Capital Markets was down 3%, mainly due to a decrease in global markets’ revenues, partly offset by an increase in corporate and investment banking revenues.  U.S. & Intl was up 10%, driven by a strong performance from ABA bank and lower PCLs. NA increased its dividend by 6%!

Here is a video about National Bank’s disappointing quarter:

Royal Bank stays the king of banks

RY reported a robust quarter with EPS up 25%. By segment: Personal Banking was up 17%, primarily driven by higher net interest income reflecting average volume growth of 2% and higher spreads. Commercial Banking was up 43%, primarily driven by lower PCL. Last year, PCLs increased significantly due to tariff concerns. Wealth moved up 28% due to higher fee-based client assets reflecting market appreciation and net sales. Insurance was up 3% and Capital Markets were up 23%, driven by higher revenues in Global Markets and Corporate & Investment Banking. PCLs of $912M decreased $512M (36%). RY increased its dividend by 7%!

Here is a video about Royal Bank’s Q2 earnings:

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: $331.87 (-21.80% VS. May 2025)

We can see a drop this month as I sold my Starbucks and Apple shares (that used to pay this month), and the dividend from LeMaitre Vascular will be paid in June this year.

Since I started this portfolio in September 2017, I have received a total of $36,444.54 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

Watching my dividend grow is easing my concerns about the stock market valuation. After all, it’s not the first time I’ve seen the market as being “expensive”. And yet, my dividends keep growing and so do my portfolio values.

Ironically, what was “the end of the world” in 2008 is now just a small blip on a graph, and most people have forgotten what it was like during that “dark time”.

Cheers,

Mike.

The post We have a Valuation Problem – May Dividend Income Report appeared first on The Dividend Guy Blog.

Three names dominate the space: Enbridge (ENB), TC Energy (TRP), and Pembina Pipeline (PPL). Same sector, same business model on paper, three different dividend profiles.

Here is how I rank them, and why.

*Disclosure: I do not own ENB, TRP, or PPL. This is education, not advice. Do your own due diligence.

How I compare midstream stocks

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

1. The Dividend Triangle: revenue growth, EPS growth, and dividend growth over five years. For midstream, EPS is the weakest signal because the business runs on long-lived assets with heavy depreciation. I weigh cash flow and dividend history more.
2. Dividend safety: payout ratio, cash payout ratio, and dividend history. Important trap: midstream GAAP payout ratios often look stretched. Management reports against distributable cash flow (DCF) instead. Always check that number.
3. Balance sheet: debt to EBITDA, credit score. Midstream companies finance their growth with debt. A 4 to 5 times leverage range is normal. Above 6 is the watch item.
4. Yield vs. history: if the forward yield sits above the 5-year average, the stock may be trading at a better entry point than usual. All three pipelines have run up, so this metric matters.

No spreadsheet tricks. Just discipline.

The scorecard

One note before the numbers. For midstream, two rows carry more weight than the rest. Debt-to-EBITDA shows how much leverage each name carries, and because pipelines fund their growth with debt, it is the metric that determines who holds up in a downturn. The GAAP payout ratio is the trap: on a midstream company, it always looks stretched, because heavy depreciation distorts the earnings it is measured against. Read it next to distributable cash flow, not on its own.

Source: Dividend Stocks Rock stock cards, Q2 2026 review.

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

#3: Pembina Pipeline (PPL)

Pembina is the smallest of the three. It runs a diversified midstream portfolio in Western Canada and the Bakken, with gas gathering, fractionation, storage, and an LNG export option through the Cedar LNG joint venture with the Haisla Nation.

On paper, Pembina has the best balance sheet of the group. Debt to EBITDA sits at 3.90, well below its peers. Management targets 5% to 7% fee-based EBITDA per share growth through 2030.

So why is it third?

Because the dividend track record is the shortest. Pembina cut its dividend in 2020 and only resumed annual increases in 2022. The current streak is three years. We also note the company has no formal economic moat and a history of overpaying for acquisitions.

A note for U.S. readers: do not confuse Pembina with PPL Corp, the U.S. utility. On the NYSE, Pembina trades under PBA.

#2: TC Energy (TRP)

TC Energy is now a focused natural gas pure-play after spinning off its oil pipeline business as South Bow in October 2024. The new TRP runs more than 60,000 miles of natural gas pipelines, plus the Bruce Power nuclear stake.

About 95% of earnings sit under regulated or long-term contracts. Management guidance for 6% EBITDA growth through 2028 and 3%-5% dividend growth going forward. The natural gas demand backdrop is strong: U.S. Heartland demand is expected to grow 40% through 2035, driven by data centers, LNG exports, and power generation.

The 26-year dividend streak survived the South Bow spinoff. The 2024 dividend “decrease” you may see in databases was the proportionate adjustment for the spinoff, not a cut. Shareholders received South Bow shares to make up the difference.

Watch-items: debt to EBITDA at 6.25 is at the high end, the GAAP payout ratio is stretched at 97.90%, and the forward yield (3.80%) sits well below the 5-year average of 5.80%. The stock has run up. The entry point is not what it used to be.

#1: Enbridge (ENB)

Enbridge wins on scale, moat, and dividend history.

The Mainline system moves roughly 70% of Canadian oil pipeline volume. The company also operates North America’s largest natural gas distribution business following the 2024 acquisition of three U.S. gas utilities. Add a $40 billion secured capital backlog and another $50 billion in unsanctioned projects, and you have a growth engine that does not depend on the energy cycle.

On dividends, ENB just raised its payout by 3% in early 2026. That is the 31st consecutive annual increase. Management guides for roughly 5% annualized growth through the end of the decade, with about 3% from the dividend.

About the payout ratios: the 117% GAAP payout and 425% cash payout look terrifying. They are not the relevant numbers for midstream. ENB targets a payout ratio of 60% to 70% of distributable cash flow. The full-year 2025 number landed at 66%, right in the middle of the range. Always check the DCF payout, not the GAAP payout.

The watch item is leverage. Debt to EBITDA sits at 6.65 and the credit score is 65, the lowest of the three. Enbridge needs steady cash flow to keep funding its backlog and its dividend. Any operational hiccup gets noticed.

The forward yield of 5.15% sits below the 5-year average of 6.60%. Translation: the stock has run hard. You are paying more for the same business than you used to.

The verdict

For income reliability and scale, ENB is my pick.

For the natural gas restructuring story and faster EBITDA growth, TRP is the more interesting trade if you can live with the debt and the recent run-up.

For the cleanest balance sheet of the group, PPL leads, but the dividend record is too thin to lead a dividend growth portfolio.

All three are PRO 3 with a Dividend Safety Score of 3. None of them is a dividend triangle ace. If you want a pipeline in your portfolio, pick the one that fits the role you are filling.

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 ENB vs TRP vs PPL: How I Rank Canada’s Three Pipeline Giants appeared first on The Dividend Guy Blog.

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.

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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.

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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.

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