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.

Say “growth,” and some investors get excited. Say “value,” and others nod politely. But say “income,” and everybody pays attention.

I get it.

The whole point of investing is not to die with the biggest portfolio possible. At some point, your money must start working for you. It must generate cash flow. It must help you pay the bills. It must replace your paycheck.

That’s exactly why we now have so many income ETFs.

They promise simplicity. They promise regular distributions. They promise retirement income without too much thinking, managing, or tinkering. For investors who want less complexity and more cash flow, it sounds like the perfect recipe.

But there’s a trap hidden in that promise.

Too many investors focus on the distribution and forget to ask what makes that distribution possible. They put the yield ahead of the strategy. They chase the paycheck and ignore the engine behind it.

That’s how you end up buying products that feel good on paper but don’t necessarily make your retirement plan stronger.

Before you buy any income ETF, you must understand why these products exist, what problem they solve, and where the good ones stop being useful and start becoming marketing.

Why do we have so many income ETFs?

The first reason is simple: investors want to live off their portfolio.

That’s not complicated. If you have spent years or decades building wealth, you eventually want your portfolio to send money back your way. If someone tells you that your investments can generate 4%, 5%, or 6% income and show up regularly in your account, that will naturally catch your attention. The appeal is obvious because it feels like retirement is finally becoming real.

If you have $1 million invested and it generates 5%, you picture $50,000 a year showing up like a paycheck. You don’t have to think about selling shares. You don’t have to care as much about market fluctuations. You just collect the income and enjoy the fruits of your labor.

At least, that’s the story investors tell themselves.

Income also fits into a world people already understand. When you work, you receive a paycheck. When you retire, you want your portfolio to replace that paycheck. That’s why monthly distributions are so popular. Some products even go further by paying more frequently, because firms know investors love the feeling of seeing cash land in their accounts. It creates comfort. It creates familiarity. It even gives a little dopamine hit each time a payment comes in.

But let’s stop for a second.

A paycheck isn’t guaranteed. A dividend isn’t guaranteed. A distribution isn’t guaranteed.

In every case, the income only exists if the business or assets behind it are generating enough return to support it. A job can be lost. A dividend can be cut. A distribution can be reduced. That is why I always come back to the same principle: income is only as good as the total return supporting it.

The second reason we have so many income ETFs is convenience.

Many investors are not interested in building and managing a portfolio of individual stocks. They don’t want to review earnings reports, follow sectors, or decide when to sell a position. They want simplicity. Pick a fund, click buy, collect the distributions, move on.

And honestly, that part makes sense.

As you age, convenience becomes more valuable. At some point, many investors would gladly trade a bit of control for a simpler structure. There is nothing wrong with that. ETFs can absolutely help reduce portfolio complexity.

The danger comes when simplicity becomes an excuse to ignore quality.

If your only question is, “How much does it yield?” then you are no longer building an investment strategy. You are shopping for a product. And investment firms know exactly how to sell those.

The classic solution: dividend-focused ETFs

If you want a simpler portfolio while keeping one foot firmly planted in the world of dividend investing, dividend-focused ETFs are the classic answer.

They’ve been around for a long time. They are easy to understand. They don’t rely on fancy structures or seductive gimmicks. At their best, they simply hold baskets of dividend-paying companies and turn them into a one-ticket solution for investors seeking income and diversification in a single package.

That doesn’t mean I suddenly prefer ETFs over stocks.

I still want to know what I own and why I own it. I like controlling my sector allocation. I like choosing the companies that fit my strategy. I don’t enjoy paying fees for something I can often do better myself. And if I dig into almost any ETF, I usually find names I wouldn’t want in my own portfolio. That makes conviction harder.

But I’m also realistic.

For many investors, dividend ETFs are a perfectly reasonable solution. They simplify portfolio management, they reduce the number of decisions you have to make, and some of them are built around exactly the kind of companies I want to own anyway.

That’s where the nuance begins.

Not all dividend ETFs are created equal.

Some are built for dividend growth. Others are built for a higher starting yield. Some are well diversified. Others are little more than concentrated country or sector bets wearing an ETF label.

Let’s look at a few examples.

VIG: the closest thing to a DSR-style ETF

If you are looking for an ETF that feels the most aligned with a dividend growth mindset, Vanguard Dividend Appreciation ETF (VIG) is probably the cleanest example.

This fund is not built for yield chasers. Its yield sits around 1.55%, which will not impress investors who only care about immediate income. But that is exactly why the structure makes sense. VIG focuses on quality companies with a track record of dividend growth. It tilts toward large-cap names and puts more weight in sectors like technology, financials, healthcare, and industrials.

In other words, this is not a product trying to manufacture income. It is a product built around strong businesses.

That’s a big difference.

As of Dec 31, 2025, it held about 338 stocks and it tilts toward quality large caps, with heavier exposure to information technology (27%), financials (21%), healthcare (16%), and industrial (11%).

If your objective is to own durable companies that can keep growing earnings and dividends over time, then VIG deserves respect. It follows a much more yield-agnostic approach. You are not buying a fat yield today. You are buying quality and long-term dividend growth potential.

For investors who understand that wealth is built through business growth first and income second, VIG makes a lot of sense.

VYM: more yield, still grounded in reality

The Vanguard High Dividend Yield ETF (VYM) takes one step closer to the income crowd, but without going overboard.

Its yield was around 2.34%, which is higher than VIG, though not exactly what I would call “high yield.” That is almost ironic given the name. Still, that tells you something useful right away: this fund is not stretching into dangerous territory just to look attractive. It remains a broadly diversified ETF built around established dividend payers.

VYM spreads its exposure across many sectors and holds hundreds of stocks. You will find many familiar names in the portfolio, including several businesses that dividend growth investors already know and respect. That is why I view it as a reasonable middle ground for investors who want a bit more yield today without completely abandoning quality.

It’s diversified by name count (~560 stocks) and spreads across the market’s classic dividend payers. Sector exposure is led by Financials (21%) with meaningful weights in Technology (13%), Industrials (14%), and Health Care (12.55%), and it explicitly excludes REITs in the benchmark design.

The main trade-off is that the dividend growth profile is less clean than VIG. The distributions do rise over time, but not in a smooth, predictable pattern. That is normal for broad ETFs because the fund is simply passing through dividends received from many different companies with different schedules and growth rates.

Still, if your goal is simplicity and a respectable yield, VYM is easy to understand and easy to justify.

I also made a complete review of Vanguard Retirement Income ETF (VRIF) in this video:

SCHD: where yield and dividend growth meet

If you want one ETF that tends to make income investors happy without forcing them into absurd yield territory, Schwab U.S. Dividend Equity ETF (SCHD) is usually the one that gets the spotlight.

And I can see why.

When doing my research, SCHD showed a yield of around 3.40%, which is noticeably higher than VIG and VYM, but it also posted a stronger distribution growth profile over the past decade than VYM. That’s a rare combination. Usually, when you push yield higher, you sacrifice some growth quality. SCHD has managed to offer a more balanced profile.

Of course, you don’t get that for free.

SCHD is more concentrated than VYM. It owns fewer stocks and leans harder into certain sectors. That means you are taking on more concentration risk in exchange for a better blend of yield and growth.

But at least the trade-off is understandable.

This is still a dividend ETF built around actual companies with profitability and dividend discipline. It is not a product trying to impress you with an eye-popping yield while quietly weakening your long-term return.

Sector weights are led by energy (21%), consumer defensive (18.5%), healthcare (16%), and industrial (11.50%). The stock allocation is more equally weighted than with VYM due to the smaller number of stocks.

For investors seeking a one-ticket U.S. dividend ETF and a more generous starting income, SCHD is one of the stronger options.

Why I’m much less excited about Canadian dividend ETFs

Now comes the part where I become more skeptical.

Canadian dividend ETFs often look attractive because their yields are higher. That is enough to pull in a lot of investors right away. But once you look under the hood, the structure becomes far less exciting.

Funds like VDY, XDIV, and XEI are not really as diversified as many investors imagine. They are mostly concentrated in the same sectors: financials, energy, pipelines, and utilities. In some cases, the top holdings dominate the fund to a point where you may wonder why you’re paying a fee at all.

That is my issue with many Canadian dividend ETFs.

It’s not that they own bad companies. In fact, they often own very solid Canadian blue chips. The problem is that they package the obvious and charge you for it. If you have followed the Canadian market for a while, you already know what the recipe looks like: big banks, large insurers, pipelines, one or two utilities, maybe an energy giant or two, and there you go.

That is not exactly deep portfolio engineering.

The higher yield may look attractive at first, but the dividend growth profile is often weaker than on the U.S. side. The concentration risk is also much higher. So yes, you may collect more income today, but you are often doing so with a less balanced, less flexible structure.

That is why I usually feel investors get a better deal with U.S. dividend ETFs.

With Canadian ones, I keep coming back to the same question: why pay fees to buy the obvious?

The question that matters more than yield

The real problem with income ETFs is not that they exist. The real problem is that investors too often buy them for the wrong reason.

If you use a dividend ETF because it simplifies your life, gives you exposure to quality businesses, and fits inside a broader retirement strategy, that can make perfect sense. If the ETF helps you reduce complexity without sacrificing too much quality, then it is doing its job.

But if you buy an ETF because the yield looks attractive and you hope the rest will take care of itself, that is where mistakes begin.

Income is not the strategy.

Income is the outcome of a strategy that works.

That’s why the first question should never be, “How much does it pay?”

The first question should be, “What does it own, how does it generate return, and can this structure support income over time?”

That mindset changes everything.

It moves you away from product shopping and back toward investment thinking. It forces you to analyze the engine rather than just admire the dashboard. And in retirement, that difference matters a lot more than one extra percentage point of yield.

Own quality first. Then let the income follow.

Download the Dividend Income for Life Guide to learn how to build income that can last through bull markets, bear markets, and everything in between.

The post Income ETFs Are Booming. Here’s What Investors Need to Understand appeared first on The Dividend Guy Blog.

But when digging deeper, there are differences to consider.

These four insurers don’t grow the same way, they don’t take the same risks, and they won’t appeal to the same type of investor. One dominates property and casualty insurance with disciplined underwriting. One leans more toward steady retirement and wealth businesses. One offers more upside through Asia. One has built a more balanced platform across insurance, group benefits, and asset management. On the surface, they all look solid. Under the hood, each has a very different personality.

That’s why this is such a useful stock battle. It’s not really about finding a “perfect” insurer. It’s about understanding which one fits your portfolio best.

If we turn this into a ranking of the best Canadian insurance stocks for dividend growth investors, this is where I land: Intact Financial first, Sun Life second, Great-West Lifeco third, and Manulife fourth. That ranking reflects the full picture: business model, earnings resilience, growth profile, and how comfortably each insurer fits inside a long-term dividend growth portfolio.

Four Insurers, Four Different Engines

All four companies operate in financial services, but they don’t rely on the same models.

Intact Financial (IFC.TO) is the one that stands out from the list. While the others are mostly tied to life insurance, wealth, and retirement products, Intact is a property and casualty insurer. It operates across Canada, the U.S., and the U.K./Ireland through brokers, direct-to-consumer brands like Belairdirect, and commercial platforms. This is a business built on underwriting discipline, claims management, pricing accuracy, and risk selection.

Great-West Lifeco (GWO.TO) is the most retirement-and-benefits-oriented of the group. Through Canada Life, Empower, and Irish Life, it has built meaningful exposure to insurance, wealth, pensions, retirement services, and reinsurance. Empower is the standout piece, giving Great-West a strong foothold in the U.S. defined-contribution market.

Manulife Financial (MFC.TO) is the most globally ambitious. It combines traditional insurance and annuity products with wealth and asset management, and its biggest growth driver is Asia. That gives it more upside potential than some peers, but it also adds more complexity and more sensitivity to market conditions.

Sun Life Financial (SLF.TO) sits somewhere in the middle, and that is exactly why many investors like it. It has grown beyond traditional life insurance to offer asset management, wealth management, group benefits, health solutions, and protection products. It is probably the most balanced among the four life insurers.

If I had to summarize each one in a single line:

• Intact is the underwriting machine.
• Great-West is the retirement and benefits compounder.
• Manulife is the global growth story.
• Sun Life is the most balanced all-around life insurer.

What the Dividend Triangle Tells Us

This is where the differences become much easier to spot.

Intact is in a class of its own in this comparison. Its revenue, earnings, and dividend growth profile are meaningfully stronger than those of the three life insurers. That matters because it shows Intact is not just a defensive insurer with a decent payout. It is also producing real business momentum.

Sun Life comes next and stands out as the strongest of the life insurers. It shows the best balance between earnings growth and dividend growth, while its broader business mix helps reduce its dependence on any one segment.

Great-West is more modest. You get a solid dividend, a dependable business, and exposure to sticky retirement and benefits operations. But the growth runway is narrower, and most of its opportunities lie in mature markets.

Manulife still offers respectable dividend growth, but its earnings profile is less stable, and the business carries more execution risk. That does not make it a bad stock. It just makes it a different kind of fit.

These are capital-intensive businesses, and the real question is who can combine income, resilience, and enough growth to reward you for holding through a full market cycle.

#1 Intact Financial: The Best Overall Insurance Stock

Intact takes the top spot because it combines something dividend investors rarely get all at once: quality, growth, resilience, and consistency.

Its biggest advantage is that it plays a different game. Property and casualty insurance is not the same business as life insurance. Success depends on pricing risk properly, managing claims efficiently, and maintaining underwriting discipline year after year. That is where Intact shines.

The company has built a dominant position in Canada and has expanded intelligently into the U.S. and the U.K. through acquisitions such as OneBeacon and RSA. It now benefits from a broad product suite, diversified geography, and multiple distribution channels. BrokerLink, Belairdirect, affinity partnerships, and commercial platforms all strengthen the model.

Intact also has a data advantage. As the largest P&C insurer in Canada, it can use claims data and pricing models to make better underwriting decisions. That edge is hard to replicate. Management has also been clear about its long-term objective: grow net operating income per share by 10%+ annually while maintaining strong returns across the cycle.

The bear case is not hard to find. Catastrophe losses are rising, and severe weather is becoming a more expensive reality. Regulation limits flexibility in some lines, especially auto insurance. Growth outside Canada also comes with integration risks and more competition.

Still, Intact remains the strongest of the four. It has the clearest edge, the best growth profile, and the most complete investment thesis.

Best for: investors who want the strongest overall insurance business and a high-quality dividend growth compounder.

#2 Sun Life: The Most Balanced Life Insurer

If Intact is the best overall insurance stock, Sun Life is the best life insurer in the group.

What makes Sun Life so compelling is its balance. It is no longer just a traditional insurer collecting premiums and hoping for favorable underwriting. Asset management, wealth, group benefits, health solutions, and insurance all contribute to the story. That creates multiple growth levers and more recurring fee-based revenue.

Its asset management arm is an important source of steady earnings. Its Canadian group benefits platform is strong. Its U.S. health and benefits operations broaden the base. Asia adds another avenue for growth. The result is a business that feels more diversified and more resilient than a classic life insurer.

Sun Life is not risk-free. It remains exposed to financial markets, interest rates, underwriting pressure, and acquisition friction. DentaQuest created some noise and reminded investors that even strong businesses can hit speed bumps.

Still, among the life insurers, Sun Life offers the most complete mix of stability, diversification, and dividend growth.

Best for: investors who want a core long-term insurance holding with a healthy mix of income, moderate growth, and business diversification.

A Great Place to Find More Dividend Growers

If you like businesses with durable models, growing payouts, and strong long-term fundamentals, you should take a look at the Dividend Rock Stars List.

It’s a curated list built to help you find high-quality dividend growth stocks faster, without wasting time sorting through companies that don’t meet the mark. If you want proven dividend growers for your watchlist, this is a great place to start.

#3 Great-West Lifeco: The Steady Hand

Great-West is the kind of stock that rarely steals the spotlight, but it often delivers what conservative investors are looking for.

Its biggest strength is the quality of its business mix. Empower has become a major player in U.S. retirement services, while Canada Life and Irish Life provide dependable exposure to insurance, wealth, and benefits. Management has also been repositioning the business toward more capital-efficient and fee-driven operations, which is exactly the kind of move you want to see in a mature business.

The bull case is simple: Great-West has a dependable platform, strong cash flow generation, and sticky relationships in retirement and benefits. It does not need explosive growth to be a useful dividend growth holding.

The weakness is just as clear. Great-West has limited exposure to faster-growing regions, and its core insurance activities still operate in a highly competitive industry. Growth is harder to come by, and pricing power is limited.

That is why it ranks behind Sun Life. Great-West is dependable, but it is not as balanced and does not offer the same growth flexibility.

Best for: conservative dividend investors who want dependable income and a lower-drama financial stock.

#4 Manulife: The Upside Play With More Moving Parts

Manulife finishes fourth, but that does not mean it should be ignored.

In fact, Manulife may be the most interesting name here for investors looking for a bit more upside. Its Asian operations provide exposure to underpenetrated insurance markets and a rising middle class. Add its wealth and asset management operations, along with its strategic push into private credit and other international initiatives, and you can see why the long-term story still attracts attention.

If everything goes right, Manulife could deliver stronger growth than Great-West and maybe even challenge Sun Life.

But there is more baggage here, too.

Manulife is more sensitive to capital markets. Its earnings profile can be more volatile. Competition in Asia is intense. Its U.S. operations have not always delivered the returns investors would like. And unlike Great-West and Sun Life, Manulife still carries the memory of its 2008 dividend cut.

That history matters in a ranking designed for dividend growth investors. It is not disqualifying, but it is part of the picture.

Best for: investors who want a higher-growth angle, more international exposure, and are comfortable with a bumpier earnings path.

So, Which Insurer Wins?

The honest answer is that each one wins for a different type of investor.

If your priority is the strongest overall insurance company, Intact Financial deserves the crown.

If you want the best balanced life insurer, Sun Life gets the nod.

If your priority is dependable income and a steadier business model, Great-West Lifeco is a very good fit.

If you want more growth potential and can accept more variability, Manulife offers the highest ceiling.

When I look at a stock battle like this, I do not want to get trapped by yield. That is the fastest way to miss what really matters. These four all offer respectable income, but the better question is this: which business do you want to own for the next decade?

For the most conservative investor, Great-West makes a lot of sense. For an investor seeking a more global growth runway, Manulife stands out. For the investor building a classic dividend growth portfolio and looking for the most rounded life insurer, Sun Life looks like the cleanest fit. But if you want the best combination of business strength, underwriting discipline, growth, and long-term execution, Intact comes out on top.

In other words, this battle does not give us one weak name to avoid. It gives us four solid contenders, each with a different role to play.

But if we rank them today, the order is clear: Intact #1, Sun Life #2, Great-West #3, and Manulife #4.

Build a Better Watchlist

Want more stocks like these?

The Dividend Rock Stars List helps you find companies with strong dividend growth potential, proven business models, and the kind of fundamentals that can support long-term wealth creation. It’s one of the easiest ways to build a smarter watchlist and focus your research on names worth owning.

Conclusion

Canadian insurers may look similar from a distance, but they are not interchangeable.

Intact stands above the group thanks to its underwriting edge and stronger growth profile. Sun Life offers the most balanced life insurance platform. Great-West remains a steady and dependable choice for income-focused investors. Manulife brings more growth ambition, but also more moving parts.

That is what makes this sector interesting. You are not choosing between good and bad. You are choosing among different strengths, risks, and portfolio roles.

And when you understand that, picking the right insurer becomes a lot easier.

The post The Best Canadian Insurance Stocks: Which One Deserves Your Money? 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.

Q1 2026 In Review

I’ve been fully invested in stocks since 2003, and the market never ceases to amaze me. When you ask me what I think will happen “this year” or what will be the best sector to invest in, I always answer the same way:

Your guess is as good as mine

You know why? Because we never know what will happen next!

Once again, the stock market confirms that I am right.  There is no point in trying to figure out what will happen over the next 12 months.

But first, the results!

Performance in Review

Let’s start with the numbers as of April 6^th, 2026 (before the bell):

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

• Current portfolio value: $321,406.88
• Dividends paid: $5,329.86 (TTM)
• Average yield: 1.66%
• 2025 performance: +7.34%
• VFV.TO= +12.18%, XIU.TO = +28.88%
• Dividend growth: +1.5%

Total return since inception (Sep 2017- November 2025): +195.52%

Annualized return (101 months): 13.74%      

Vanguard S&P 500 Index ETF (VFV.TO) annualized return (since Sept 2017): 15.41% (total return 234.0%)

iShares S&P/TSX 60 ETF (XIU.TO) annualized return (since Sept 2017): 12.97% (total return 179.20%)

When I wrote my investment theme newsletter at the end of 2025, I discussed AI as a macro play, energy (to fuel AI), massive CAPEX driving the bull market, private equity and gold. I didn’t forecast the surprise capture of Nicola Maduro, Venezuela’s President. I was far from telling you a war was imminent in Iran!

Most importantly, I didn’t talk about Iran’s opposition and its move to block the Strait of Hormuz.

All of this is creating tons of noise, leading to skyrocketing energy prices along with the fear of having a helium shortage.

Did you know that about a third of the world’s commercial helium supply is typically transported through the Strait of Hormuz, largely originating from Qatar’s production facilities?

Did you know that we need helium to support the creation of irreplaceable coolants that make MRI scanners and advanced microchips possible?

You can see now why there is so much volatility!

So, we now wake up in early April with the Canadian market outperforming the S&P 500 and the Nasdaq. There is a feeling of déjà vu as this is what happened in 2025. Last year it was gold; this year its oil driving the market.

What Performed so Far in 2026?

Last year, gold investors were quite proud of their portfolios. They were right as gold, silver and other metals created impressive returns. Then, I started to see more questions about how to buy metals.

• Should I store it? At home or with a firm?
• Is investing in ETFs the same thing?
• Should I go for mining stocks or streamers?

In January, we saw silver jump by 60% and gold break $5,000 per oz., and even took its chance to reach $6,000. Since then, it has been a lot quieter. A new FOMO investment is the sheriff in town: oil!

Energy stocks have been surging since the war in Iran started. After three months, energy and materials are generating most of your returns. Utilities continue to do well as the search for more power remains an important theme in 2026.

As we usually see during volatile times, there is an increase in interest for consumer staples stocks. After all, we will need those products regardless of what is going on.

Industrial stocks (mostly related to investment in infrastructure, mining natural resources and AI data centers construction) and REITs are closing the performing sectors.

When I look at my sector allocation (big chunk in financial and technology), I’m happy with my returns!

Here is a podcast about my Q1 portfolio review trades and thoughts:

A word of caution about Fear Of Missing Out (FOMO)

Now that you see what works and what does not, I want to remind you that this chart will change again in 3 months when I review each sector at the end of next quarter.

Therefore, for those who ran after gold and silver at the end of 2025, you will be tempted to run after energy in 2026. What will happen if the conflict in Iran is resolved? Chances are the oil prices will go back down as they have done each time over history. We just had a preview this Wednesday, as a simple cease-fire was enough to push the barrel price down by more than 15%.

Are you tired of buying late at each party?

It’s probably time to have a clear asset- and sector-allocation strategy. For example, I’ve made my peace a long time ago about not having much energy and gold stocks in my portfolio. Since I focus on dividend growers, that makes sense that I don’t have a large exposure to these sectors. I have a little exposure and I’m content with that.

When those sectors suffer, I don’t. When they surge, I look at others making money and I congratulate them for their investment.

When your neighbor makes money, it doesn’t mean you don’t.

So, you can be happy for him and stick to your strategy in the meantime.

That’s how I avoid FOMO investing: by sticking to my strategy and being content that I’m on par with my plan.

Too many moving parts, I remain still

After 3 months in 2026, I heard more noise than quality information. Therefore, I don’t intend to make any modifications to my portfolio at this point.

When the noise is too loud, I close the door and look at the numbers. DSR PRO makes it easy for me to monitor 34 companies’ quarterly earnings in a few hours. I prefer to focus on how revenue, earnings and dividends fluctuated in the past 12 months than how the stock prices have performed.

The DSR PRO report generates a half-page summary of what was important in the past 3 months for each of my holdings. You have an example below with LeMaitre Vascular (LMAT). The most important part is highlighted in green: revenue up 16%, EPS up 39% and a juicy dividend increase of 25%.

Once I’m done smiling at those numbers, I read what the CEO had to say about the quarter. He was quite happy with the results and highlighted international growth for one of its products: Artegraft.

Then, what DSR says will tell me where the growth is coming from. Sales were strong across core products and earnings surged on stronger sales and improved margins. I like when a company can generate economies of scale on top of showing stronger revenue.

Reading this summary takes me about 2 minutes per quarter. I have 34 holdings across all my portfolios, so that’s a little more than one hour per quarter. For most companies, the review stops there. After all, I don’t need to know more about LMAT’s quarter as all the numbers are fine.

Here is a podcast about my 9 biggest dividend increases of 2025  including LMAT:

For a few companies, numbers won’t be as great. This is where I’ll spend a few more hours digging deeper using the Press Release and the DSR stock card links.

Managing a portfolio of stocks with this report takes less than five hours per quarter. It’s a great way to not only save time but also ignore the noise and focus on what really matters: the numbers!

Speaking of which, I’m adding a very important number in my Smith Manoeuvre update: the interest paid so far. Many asked me how much interest I pay per year to have a clear picture of the Smith Maneuver in action.

I didn’t realize, but I started my SM portfolio exactly 4 years ago as my first interest payment was in April of 2022. Therefore, I’m adding the total interest paid so far.

In four years, my portfolio generated a net cash value of $34,447.75 (portfolio value) – $26,000 (total debt) – $2,232.81 (interest paid) = $6,214.94.

It’s a little more than that since the interest is tax-deductible, but I wanted to keep the numbers easy to follow.

If I had only paid my mortgage, I would have paid $26K on my loan. Today, if I liquidate my investment, I would have paid an extra $6.2K on my debt. Not too bad, right?

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 $34,447.75
• The portfolio debt is at $26,000.
• Interest paid since April 2022: $2,232.81
• Monthly contribution is set at $1,000/month.
• The annual income is $721.55, and the projected income is $807.66
• 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 April 6^th, 2026 (before the bell):

$1,000 invested in DOL.TO

Dollarama reported a mixed quarter with revenue up 12%, but EPS was up only 2%. That sent the stock price down and created the temptation to invest a little more in this amazing company.

I still have my eyes on increasing my positions in TMX, Intact, Stantec, and CGI, but I couldn’t resist buying more of DOL after its earnings announcement!

Pension Portfolio Summary

Here’s my pension plan portfolio summary as of April 6^th, 2026 (before the bell):

Total value: $321,406.88 (-$4,568.18, -1.40% from last month).

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: $724.19 (+15.22% VS. MARCH 2025)

It feels good to see the dividend growing this month as the portfolio isn’t doing that well. I love to see those dividends coming in when the market is down!

Since I started this portfolio in September 2017, I have received a total of $35,742.69 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

I’m accumulating more dividends in this portfolio, and I’ll shortly have another $1,000 to invest! I will likely add more of Broadcom (AVGO) as I’m not yet fully invested at 3% of the portfolio in this security.

Cheers,

Mike.

The post Q1 2026 in Review – March Dividend Income Report appeared first on The Dividend Guy Blog.

“How much yield can I get?”

It sounds logical. After all, if the goal is income, the natural reflex is to look for the biggest dividend stream possible. But that question often leads investors in the wrong direction. A high yield may look attractive today, but it does not guarantee safety, growth, or sustainable retirement income.

In fact, the opposite is often true.

Investors who focus too much on yield can easily end up holding slower-growth businesses, stretched payout ratios, or companies the market already sees as vulnerable. That’s why the best dividend investors eventually become yield agnostic. They stop obsessing over the size of the yield and start focusing on the quality behind it.

That shift makes all the difference.

Yield Is Just the Surface

A stock yielding 5% is not automatically better than one yielding 2%. It simply means more cash is being sent to shareholders right now. That’s it.

The real question is whether the business can support that payout while still growing.

That’s why my approach has evolved over the years. Even though the entire brand is built around dividend investing, the process itself is yield agnostic. The focus is not on whether a company yields 0.5%, 2.5%, or 5%. The focus is on whether the investment thesis is strong and whether the Dividend Triangle shows the right trends: revenue, earnings, and dividends moving up over time.

That’s a much better way to build income.

When you focus on quality first, you stop rejecting great companies just because they start with a lower yield. You also avoid being seduced by a fat yield that may be masking weak growth, poor execution, or rising risk.

Sustainable Income Comes From Business Strength

Many retirees want to “live off the dividends” and never touch their capital.

That’s understandable. It feels cleaner. Simpler. Safer.

But the truth is, your income is a function of your portfolio’s total return, not just the current yield it throws off. If your holdings do not generate enough returns over time, your income plan becomes fragile. If the underlying businesses stop growing, your dividend stream becomes exposed. If they run into trouble, cuts can happen. In other words, sustainable withdrawals only work when the portfolio generates enough total return to support them.

That’s why yield alone is never enough.

A high-yield portfolio built on weaker businesses can disappoint quickly. A portfolio of stronger dividend growers, even with a lower starting yield, often gives you a much better shot at creating reliable income through a mix of dividend growth, capital appreciation, and flexibility in retirement.

This is especially important when markets get rough. Dividends and distributions are not magically immune to business pressure. If the market can punish stock prices, companies can also reduce payouts. That’s why retirees should not confuse a high current yield with a safe income plan.

The Yield Agnostic in Real Life: National Bank vs. Scotiabank

A good way to illustrate this is to compare National Bank (NA.TO) and Scotiabank (BNS.TO).

Both are solid Canadian banks. Neither is a bad business. But if you were screening only for yield, you would likely choose Scotiabank first. It offers a more generous yield, which makes it look more attractive to income investors on the surface.

That’s where yield chasing can lead you astray.

When you compare both banks through the Dividend Triangle, National Bank clearly comes out ahead. The chart below shows stronger share price performance, much stronger revenue growth, far better EPS growth, and much stronger dividend growth for National Bank over the period shown. Scotiabank offers a higher yield, but National Bank shows stronger business momentum.

That distinction matters.

National Bank has built a stronger growth profile by diversifying beyond traditional banking. It has expanded in wealth management, capital markets, and alternative lending, while keeping a dominant position in Quebec. Its acquisition of Canadian Western Bank should further broaden its footprint outside Quebec and create new cross-selling opportunities, particularly in private banking. It also continues to benefit from growth vectors like ABA Bank in Cambodia, Credigy in the U.S., and its Private Banking 1859 platform.

Scotiabank tells a different story.

Its international presence is often presented as a long-term advantage, particularly in Latin America. In theory, that should create stronger growth opportunities than a more domestic-focused bank. In practice, it has also brought greater volatility, higher execution risk, and greater exposure to political, currency, and economic instability. Scotiabank has struggled for years to turn that international footprint into superior shareholder returns.

That shows up in the results.

National Bank has rewarded investors with stronger growth because it has executed better. Scotiabank has often paid investors higher yields because the market has assigned it a lower valuation and less confidence.

That’s the kind of difference yield-focused investors miss.

If you only look at today’s income, Scotiabank might seem like the obvious choice. But if you look at the quality of the business, its growth profile, and its ability to keep compounding over time, National Bank stands out as the stronger retirement holding.

This doesn’t mean National Bank is risk-free. It still has significant exposure to Quebec, and its faster growth profile carries some execution risk. Provisions for credit losses must also be monitored carefully. Scotiabank is still a respectable bank with a strong domestic franchise and meaningful wealth management operations. But when you compare the two side by side, one has the better yield and the other has the better business.

For long-term dividend investors, the better business usually wins.

Why Yield Agnostic Investors Win

Yield-agnostic investors widen their universe.

They don’t lock themselves into stocks yielding above 4%. They don’t dismiss low-yielding names automatically. They don’t treat yield like the main evidence of quality.

Instead, they ask better questions:

Is the company growing revenue?
Are earnings supporting the payout?
Is management allocating capital well?
Does the dividend keep rising?
Does the business have durable competitive advantages?
Can this company still thrive in five or ten years?

That mindset leads to stronger portfolios because it focuses on the source of the income, not just the amount distributed today.

And in retirement, that’s exactly what you want.

You want a portfolio built on resilient businesses. You want dividends backed by earnings growth. You want flexibility when markets are down. You want income that can last, not income that only looks good on a stock screener.

Final Thought: Don’t Buy the Highest Yield. Buy the Best Chances.

The investors most likely to succeed with dividend investing are not the ones chasing the highest payout.

They’re the ones buying the strongest businesses.

Yield matters, but it should never come first. When you focus on quality, the dividend trend, the payout ratio, and the Dividend Triangle, you put yourself in a much better position to avoid cuts and build a retirement income stream that can actually hold up over time.

A big yield can feel reassuring.
A great business is what makes that income sustainable.

And if you want to dig deeper into how to build a retirement strategy around dividend growth and sustainable withdrawals, download the Dividend Income for Life guide.

That’s where the real retirement income conversation begins.

The post Dividend Investing: Yield Agnostic Investors Will Win appeared first on The Dividend Guy Blog.