So are they falling knives that will cut you, or good buying opportunities? Some of them are in my portfolio. Around Thanksgiving, I looked at what happened over the past year and reviewed each name. The numbers below are 12-month price changes as of October 29.

*Disclosure: I own Stella-Jones (SJ), Brookfield Corporation (BN), Brookfield Renewable (BEP), Stantec (STN), Constellation Software (CSU) and CGI (GIB.A). I don’t own FirstService (FSV) or Capital Power (CPX). This is education, not advice. Do your own due diligence.

Stella-Jones (SJ): Down 15% on Squeezed Margins

I discussed Stella-Jones not too long ago. The company is struggling to show good margins, and the market doesn’t like that.

When your margins get squeezed and management tells you things will get better in 12 to 18 months, the valuation takes a hit.

The business model is still solid. Stella-Jones sells railway ties, utility poles and industrial lumber. At this point, the valuation is what hurts.

I am holding on to my shares. Being an investor means being patient sometimes.

You can read more about Stella-Jones below.

Why Does Stella-Jones Stock Keep Going Down?

FirstService (FSV): Down 11% With a Great Business Model

FirstService is not in my portfolio, but it caught my attention. It is down about 11% over the past 12 months, even after a bounce on its third-quarter results. Over the past five years, it has been dead money in a great bull market. That is strange when you look at the business.

FirstService is the largest property manager in North America. It runs more than 9,500 community associations under multi-year contracts, which means a lot of recurring revenue. Its FirstService Brands division groups small property services companies: plumbing, closets, maintenance, restoration and roofing. They sell those services to the same communities.

The FirstService Dividend Triangle

Revenue is a line going up. It grew 12% a year over the past five years. The dividend grew above 10% a year over the same period.

The problem is earnings. EPS grew about 4% a year over five years, and it was almost flat between 2022 and 2026.

The valuation doesn’t help either. The P/E ratio sits at 35, and the forward P/E is 20, so I expect some normalization.

This was the first time FirstService popped up on my list, so I haven’t done much digging yet. A well-established business, recurring revenue, good dividend growth and a falling share price. It looks worth a closer look.

The Brookfields Are Testing Your Patience

The Brookfield family is down over the past 12 months:

• Brookfield Corporation (BN): down 17%
• Brookfield Asset Management (BAM): down 12%
• Brookfield Renewable (BEP): down 8%

Holding Brookfield long-term has paid off. Many people are not that patient, and they sell.

Brookfield Renewable

Higher interest rates weigh on Brookfield Renewable. Brookfield Renewable is also merging its two share classes, so BEP and BEPC are becoming one.

Every time Brookfield does this, it creates confusion. The stock market doesn’t like confusion, and the stock lags for a while. When Brookfield spun off its asset management business in 2022, the old BAM became BN, and the new BAM became the asset-light manager. The stock had a hard time, then bounced back fast.

Corporation and Asset Management

For BN and BAM, the problem is the industry narrative. Money is leaving private equity at some of Brookfield’s competitors. Investors see private funds as illiquid and a bit of a black box, and they want their money out.

The more people think that way, the more an asset manager gets squeezed. It can be forced to sell long-term investments at the wrong time and restrict withdrawals.

That is not happening at Brookfield. It is gathering more money quarter after quarter. The narrative around the industry is negative, Brookfield is doing well, and the shares are still down.

Why I Hold Brookfield Renewable

I view Brookfield Renewable like a bond with a good yield. The distribution keeps increasing, which I like.

I am 100% invested and 100% in stocks. In my mind, this is my fixed income. I don’t care much about the stock price. I care about the money coming in to stabilize the rest of the portfolio.

The AI Disruption Names

This group bothers me the most. The results are great, but the shares still haven’t gotten back on track. The AI disruption narrative is the reason.

The engineering firms, WSP Global (WSP) and Stantec, are down more than 30%. Thomson Reuters (TRI) is down 30%. CGI and Constellation Software are both down 11%.

In the U.S., some companies that suffered from the same narrative are getting back on track. I think of Salesforce, even if the rebound is not as strong. In Canada, we haven’t seen this yet.

It’s only concerning if you don’t have conviction in your investment. I am happy to have Stantec and Constellation Software in my portfolio, plus a tiny position in CGI. I am letting them ride.

As long as the numbers show up, I don’t care about the narrative. My narrative is different. Maybe I will be wrong, and that is fine. At this point, I am still investing with conviction.

Outside those groups, Capital Power (CPX) is down 11%. It is a great business, well positioned in Canada and in the U.S.

Get the Dividend Rock Stars List

If you want more ideas, my Dividend Rock Stars List is a good starting point for your research.

It is built with companies showing a positive dividend triangle: revenue, earnings and dividends all growing over the past five years. About 300 companies make the cut.

The list is updated every month and comes with my free newsletter.

Enter your name and email below to get it.

The post Falling Knives or Buying Opportunities? Canadian Stocks Down in a Strong Market 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.

Roasting a Listener’s Portfolio

This month I tried something different on the podcast. A listener sent me one of his portfolios and asked me to roast it. We’ll call him Caleb, which isn’t his real name; it’s one of my kids’ names.

But first, the results!

Performance in Review

Let’s start with the numbers as of October 8th, 2026 (before the bell):

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

• Current portfolio value: $340,113.76
• Dividends paid: $5,552.21 (TTM)
• Average yield: 1.63%
• 2025 performance: +7.34%
• VFV.TO= +12.18%, XIU.TO = +28.88%
• Dividend growth: +1.5%

Total return since inception (Sep 2017- Sep 2026): +212.72%

Annualized return (108 months): 13.51%      

Benchmark: 14.995%

Out(under)performance: -1.485%

Vanguard S&P 500 Index ETF (VFV.TO) annualized return (since Sept 2017): 16.89% (total return 307.40%)

iShares S&P/TSX 60 ETF (XIU.TO) annualized return (since Sept 2017): 13.1% (total return 202.90%)

Roasting a Listener’s Portfolio

This month I tried something different on the podcast. A listener sent me one of his portfolios and asked me to roast it. We’ll call him Caleb, which isn’t his real name; it’s one of my kids’ names. 

He holds 29 stocks with roughly equal weight, so I built a mock $100,000 portfolio and reviewed it the way I review my own money. I don’t know Caleb’s full situation, so this isn’t advice, just a look through the DSR lens. At the big-picture level, nothing jumped out as wrong. There are four core sectors: financials at 21%, then consumer discretionary, technology and industrials at about 17% each. Consumer staples, healthcare and one materials name complete it. The forward yield is about 1.75%, and only Pepsi and BAM yield more than 4%. It’s a low-yield, high-growth portfolio, very close to how I invest.

Most of Caleb’s questions were about overlap. 

• Lowe’s and Home Depot are direct competitors. If home renovation slows down, both will react the same way, so about 7% of the portfolio is tied to one risk. That’s not ideal, but it’s not the end of the world either; what matters is whether you’re comfortable with that exposure.
• Owning both Visa and Mastercard means owning both halves of a duopoly. It’s not optimal, but it’s not a big overlap (and I own Visa, so I’m a bit biased). 
• Industrials getting close to 20% doesn’t worry me: a railroad, an engineering firm and a waste company have almost nothing in common. Sector labels are fuzzy anyway. I put Stella Jones in materials, Caleb puts it in industrials, and both make sense. The point of watching sector weights isn’t the label. It’s knowing what you own and why you own it, as Peter Lynch said. 
• The one name I’d keep on my radar is UnitedHealth. It’s been a dog for about two years, so patience is required.

Honestly, I could invest in most of these companies. 

Microsoft, Apple, Broadcom and Visa are already in my portfolio, and I used to own Texas Instruments before selling it to buy Broadcom. 

But liking the picks doesn’t mean they’ll do well next year. 

Stella Jones is a good reminder: the numbers are solid, and it has still been lagging for a while. Picking companies that fit your strategy is the first step. Being patient is the second. Most importantly, you should sleep well at night. 

If you like how your portfolio is built, you have the perfect portfolio for you. 

Watch the full roast below and tell me in the YouTube comments what you would change.

Smith Manoeuvre Update

The portfolio shows 13 companies spread across 7 sectors. My goal is to build a portfolio of thriving companies with a solid dividend triangle (i.e., positive revenue, EPS, and dividend growth trends). The current portfolio yield is 1.78%, with a 5-year dividend growth CAGR of 11.69%.

• The portfolio value is now at $41,829.57.
• The portfolio debt is at $32,000.
• Interest paid since April 2022: $2,885.19
• Monthly contribution is set at $1,000/month.
• The annual income is $742.75, and the projected income is $829.95.
• To report my Smith Manoeuvre, I export the Excel data from my DSR PRO dashboard.

The portfolio is on its way to 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! It will be exciting to see a 13^th injection of $1,000 boost the portfolio further!

Smith Manoeuvre Portfolio Summary

Here’s my SM portfolio summary as of October 8^th, 2026 (before the bell):

I Will Buy More Franco-Nevada

Franco-Nevada is among the smallest positions I own (1%), and I want to build it into a full position (3%). It will take time, but I want to grow my exposure to FNV going forward. The point is to have a more balanced portfolio. I can start by adding $1,000 more here and there.

I haven’t deployed my $1,000 this month, but it will go into FNV for sure!

Pension Portfolio Summary

Here’s my pension plan portfolio summary as of October 8^th, 2026 (before the bell):

Total value: $340,113.76 (+$518.64, +0.15% from September).

My Entire Portfolio Updated for Q3 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 on my holdings. Results have been updated as of October 8^th, 2026. The next quarterly report will be available in January.

Download my portfolio Q3 2026 report.

Dividend Income: $828.82 (+15.25% VS. September 2025)

The dividend is larger this month because I added more shares of LeMaitre, I added Broadcom to my portfolio and all companies increased their dividends vs. last year (many double-digit increases!).

Since I started this portfolio in September 2017, I have received a total of $38,693.08 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 have started taking notes on what to look at for my year-end review. I’ll share my process in a workshop in December or early in January. The current economic situation calls for a good review that goes beyond current numbers.

I think it makes sense to position our portfolios to protect ourselves against a potential bear market and to thrive once we get past the storm.

Cheers,

Mike.

The post Dividend Income Report: +15.25% and a Listener’s Portfolio Roast appeared first on The Dividend Guy Blog.

When a whole sector drops for reasons unrelated to the businesses, I want to know which names deserve a closer look. I covered Enbridge and TC Energy in my free pipelines report. Today I am looking south of the border at two companies a Canadian can hold the same way they hold Enbridge.

*Disclosure: I don’t own Williams (WMB) or ONEOK (OKE). This is education, not advice. Do your own due diligence.*

Why Williams and ONEOK?

Williams and ONEOK are ordinary corporations. That matters more than it sounds. They pay dividends, not partnership distributions. The Canada-U.S. tax treaty caps the withholding tax at 15%, and it is waived inside an RRSP.

The highest yields in U.S. midstream come from master limited partnerships. Canadians keep the least of those. Williams and ONEOK are in the other group, the one a Canadian investor can own the same way they own Enbridge.

Both companies move natural gas and natural gas liquids. Both generate strong cash flow. They take very different roads to dividend growth.

Williams (WMB): One Pipe Carries the Thesis

Williams owns Transco, the largest interstate natural gas pipeline in the U.S. It runs from South Texas to New York City and now flows both ways. It links the cheapest gas in North America to the fastest-growing demand on the East Coast. Nobody can build a second one beside it. Morningstar rates Transco as a wide-moat asset inside a narrow-moat company.

The newer piece is power. Williams built a 200-megawatt gas plant for a data center in Ohio in under 18 months. It now has six of these deals, worth US$9.6 billion, on 10 to 12.5-year contracts. In August 2026, it closed the Momentum Midstream acquisition, which connects more Haynesville gas to Gulf Coast LNG plants.

The Williams Dividend Triangle

Management targets EBITDA growth of 11% or more over the long term. The dividend grew about 5% a year over the past five years, and 2026 brought another 5% increase. In 2025, cash flow covered the dividend 2.4 times. That leaves room to keep raising it while funding growth.

The yield sits at 3.0%, below its five-year average of 4.7%. A yield above its five-year average can flag a buying opportunity. Here it is the opposite. Even after the drop, the market prices Williams above its own history. It already pays for the growth story.

What Could Go Wrong at Williams?

Gathering and processing is a large part of Williams, and that business moves with drilling. The Momentum deal pushes debt above the 4 times EBITDA ceiling management prefers, for now. Haynesville wells need firm gas prices to keep drilling. In September 2026, a court reversed a water permit for the Northeast Supply Enhancement project.

Williams is also a pure natural gas company. If the power and LNG demand wave stalls, there is no other business to lean on.

ONEOK (OKE): Built by Acquisitions

ONEOK started as a natural gas liquids specialist. It then spent about US$34 billion in three years buying Magellan, EnLink and Medallion. That added refined products pipelines, crude oil and Permian gas. More than 85% of earnings come from fee-based contracts.

In August 2026, ONEOK sold a $9 billion stake in its operating company to Apollo. It used $4.45 billion to buy Brazos Midstream in the Permian and $5 billion to pay down debt. Leverage is heading toward 3.25 times EBITDA. ONEOK carries a DSR PRO rating of 4, one notch above Williams.

The ONEOK Dividend Triangle

ONEOK yields 4.7%, against a five-year average of 5.7%. The dividend grew about 2% a year over the past five years, and the current streak of increases is three years.

The cash flow picture is tighter than at Williams. In 2025, free cash flow after growth spending fell short of the dividend. The acquisitions should lift cash flow, but they have to deliver first.

What Could Go Wrong at ONEOK?

The Apollo money is not free. It behaves like preferred equity with a 7% hurdle and takes 15% of operating cash flow. That caps what is left for shareholders until it is redeemed, and the earliest date is 2034.

ONEOK also has three large acquisitions to absorb at once. Its marketing pieces swing with commodity spreads. Its Sun Belt Connector pipeline to Phoenix may be canceled because a competing line was sanctioned first. Higher rates also hurt a company that refinances debt every year.

The Verdict

#1 Williams. For dividend growth, Williams wins. It is the closest thing to TC Energy south of the border, with a lower yield and a better growth story. Cash flow covers the dividend more than twice, and the growth comes from a pipe nobody can copy, plus power contracts.

#2 ONEOK. For income in a registered account, ONEOK has the highest yield and the best DSR rating, now that Apollo’s money has reduced leverage. The tradeoff is the slice of cash flow that goes to Apollo before shareholders, and a dividend that has grown slowly.

One more thing from the report. Owning four pipelines does not diversify you. They share the same debt and the same sensitivity to interest rates. You don’t want to put different salts in your soup.

Get the Free Pipelines Report

Williams and ONEOK are two of the names I studied for my North American Pipelines report. The free version gives you the homework I would do before putting any cash to work in this sector.

It explains why pipelines trade like bonds, why GAAP earnings lie here and which cash flow numbers to read instead, and which debt levels call for a closer look. You also get a map of who owns which corridor, scorecards for the Canadian and U.S. names, and full profiles of Enbridge and TC Energy.

Get the free pipelines report here

The post Williams vs ONEOK: Two U.S. Pipelines, One Dividend Growth Winner appeared first on The Dividend Guy Blog.

Stella-Jones went from about $100 to under $70 in the same year. A listener asked me what in the wood is going on. Yes, pun intended. I have three kids, so dad jokes come with the job.

I have owned Stella-Jones for a while, so I am biased. I like the company. I like it less when it drops 30% in a year.

Two things drive a stock price: the numbers and the narrative. Let’s look at both.

*Disclosure: I own Stella-Jones (SJ.TO). This is education, not advice. Do your own due diligence.

Why Is Stella-Jones Stock Down?

Flat sales, a margin squeeze and a guidance cut. The adjusted EPS fell 17% in the second quarter while revenue barely moved.

Flat sales alone do not explain losing $30 on a $100 stock. The margin does, and so does what management said about it.

Is the Stella-Jones Story Still Intact?

Yes. Most of the money comes from utility poles and railway ties, two products that need regular replacement whatever the economy does.

Stella-Jones is an industrial company in the lumber business. What sets it apart is where the sales come from. Utility poles bring in about half of revenue, railway ties 23%, residential lumber 22%, and industrial products 4%.

Residential lumber is the volatile piece. It moves with lumber prices and the housing market, and it is more exposed to tariffs.

The rest works a lot like recurring revenue. Railroads have to maintain their ties. Utilities have to maintain their poles. And in a world that needs more power, grid investment means more pole orders.

The company has also built its moat over decades. It runs treating plants across Canada and the US, close to its customers, and it has long-standing relationships with the utilities and railroads it supplies.

What Happened to the Margin?

Costs rose faster than prices. Fuel, environmental and maintenance costs went up, a plant upgrade slowed the steel structures business, and Stella-Jones could not pass all of it to its customers.

Second quarter sales went from $1.034 billion to $1.042 billion. No growth, but not a reason to lose a third of the stock price either.

The adjusted EBITDA margin is where it went wrong. It fell from 18.3% to 16%, a drop of 230 basis points, and earnings per share fell with it.

When sales are flat and earnings drop that hard, something inside the business changed. Here is what did.

Fuel costs went up. With the war in Iran not likely to end tomorrow morning, fuel will keep putting inflationary pressure on everything for the rest of the year.

Environmental management and maintenance costs increased at some sites.

The steel structures business ran into temporary inefficiencies while Stella-Jones upgraded its capacity. Upgrading a plant is the right move for the long term. In the short term, it hurts the margin.

Then Stella-Jones could not pass all those costs to its customers. It ate them, and the margin paid for it.

Why the Guidance Cut Hurt More Than the Quarter

The market liked the quarter even less once management spoke about the margin outlook.

Stella-Jones had set a target for 2026 to 2028: a margin between 17.5% and 18.5%. Management now says this year will come in below 17.5%.

Analysts built their assumptions on a margin above 17%. The quarter came in at 16%, and management confirmed it will stay under the original range. When guidance goes down, the stock price follows.

Management still expects the second half to improve as some of those costs ease.

One Segment Is Still Growing

The segments tell the same story.

Railway tie sales slipped from $240 million to $235 million. Volumes were lower and competition picked up.

Residential lumber had a rough quarter. Softer lumber prices, softer volume and poor weather all hurt.

Utility products were the bright spot. Volumes were up about 7%, and sales rose from $476 million to $510 million.

What Do the Five-Year Numbers Say?

A slow and steady business with a fast-growing dividend. Over five years, revenue and earnings per share grew about 5% a year, and the dividend grew 13.5%.

Stella-Jones carries a PRO rating of 4 and a Dividend Safety score of 4. All three legs of the dividend triangle point up.

The dividend has almost doubled over the past five years, and Stella-Jones has raised it for more than 20 years in a row. The latest increase was 10%, to $0.34 per quarter.

A dividend growing more than twice as fast as earnings cannot keep that pace forever. It does not have to slow down in a hurry either. The payout ratio sits around 20% of earnings and 15% of cash flow.

Cash generation stayed strong through the bad quarter, at $192 million. Stella-Jones cut its net debt by more than $100 million in the first half.

On valuation, the forward PE is under 12 and the yield is close to 2%, against a five-year average of 1.4%.

Is This Kind of Volatility Normal for Stella-Jones?

Yes. The stock traded around $34 in 2022, near $95 in 2024, around $65 after Liberation Day, back near $100, and now sits around $70.

It goes up, it goes down, it goes up, it goes down.

Over the past few years, Stella-Jones has moved by high single digits, sometimes double digits, in a single day. That is part of owning it. I do not go crazy over the price. The margin is what concerns me.

I explained why I like this company when I picked my top Canadian dividend stocks for 2026.

Top 3 Canadian Dividend Stocks for 2026—And What 2025 Teaches Us

What Will I Watch in the Next Earnings Reports?

Three things: the margin and management’s path back to 17.5%, railway tie volumes, and utility pole sales.

1. The Margin

I want to hear management talk about the margin and how they get it back to 17.5%. That means running more efficiently, getting costs under control, and passing more of the inflation to customers.

This is the key piece. The moment Stella-Jones shows it can improve its profitability, I expect the market to notice.

2. Railway Tie Volumes

Railway ties are still an important segment. If volumes stay weak, it will be very hard for Stella-Jones to come back with strong numbers.

3. Utility Pole Sales

Utility poles are growing, and right now they hold up the rest of the business.

There is one risk here. Interest rates, inflation and a squeezed consumer could push a lot of companies to cut their spending budgets. Railroads and utilities could do the same, and hold off on new projects.

Stella-Jones would keep its baseline. There is a limit to how long you can delay maintenance, and nobody wants railway ties falling apart. The recurring orders will still come. Growth is going to be a tough ride.

I covered those rate and inflation pressures in more detail here.

4 Signs of a Bear Market, and Why I Am Still Fully Invested

The Verdict

The problem is the margin. Revenue growth is weak, and in a cyclical business like this one, that is normal.

The business model has not changed. Poles and ties still need replacing, and the grid still needs more poles. What changed is how much of each sale Stella-Jones keeps.

I still like the company. What you do with Stella-Jones is your call.

Learn to Read a Quarterly Report Yourself

Most of this article came from one quarterly report. Sales, margin, segments and guidance. Knowing which lines to read is what tells you a 30% drop is a margin problem and not a broken business.

Simplified Quarterly Earnings walks you through a report the way I read one. It is one of the three courses in Dividend Simplified, $15 for the set.

Get Dividend Simplified here

The post Why Does Stella-Jones Stock Keep Going Down? appeared first on The Dividend Guy Blog.

That is also where the opportunities are.

Today I am on the positive side. Here are the sectors that shield you, the sectors taking the hit, and three companies that could do well down the road.

*Disclosure: I own Stantec (STN.TO), CGI (GIB.A.TO), Canadian Natural Resources (CNQ.TO), National Bank (NA.TO) and Royal Bank (RY.TO). I do not own Adentra (ADEN.TO). This is education, not advice. Do your own due diligence.

What Should You Do About the Trade War?

Stay invested. Waiting through tariff headlines is what cost investors in 2025, when the market fell about 10% in days and then went back into bull mode.

Some investors are afraid and decide to wait. Waiting is the worst thing you can do.

Tariffs are not news. This has been going on since Liberation Day in April 2025. The market dropped about 10% over a few days and everyone went crazy. A couple of months later, it was back in bull mode and everything was fine.

The people who sat it out in February and March missed the recovery.

This time, we do not know what will happen. Maybe it will go the other way around. That is the point. You do not know. I do not know. Your guess is as good as mine.

Waiting every single year is the worst move you can make. But you do you, I do me, and we are all good.

Should Canadians Stop Buying American Stocks?

A boycott hurts your portfolio and nobody else. The same investors avoiding US companies are reading this on an iPhone and going home to a Windows desktop.

A lot of Canadians do not want to invest in American companies anymore. I get it.

Let me play devil’s advocate for a second. You are probably watching this on an Apple phone. You are probably on Facebook. If you have a desktop at home, it runs Windows. And if you drive a Ford or a Chevy, you are not selling it to buy a Toyota.

There are moves you can make to take a stance according to your values. On the investing side, I think you hurt yourself and no one else.

What matters to me is retiring comfortably and being financially secure. That is easier with a diversified portfolio. Those are plain facts. What you do with them is yours.

Which Sectors Are Protected From Tariffs?

Energy, gold, materials and utilities. Canada is not going to stop selling oil to its southern neighbour, and power stays domestic whatever happens at the border.

Energy comes first. I would be surprised if we stopped selling oil south. The war in Iran is fuelling it, and it also helps protect against inflation.

I am not a big fan of energy. I still have to say that Canadian Natural Resources is one of my favourite stocks in my portfolio these days, on short-term performance.

Gold should do well. Materials in general too, because tariffs land on them, but a lot of materials are a necessity rather than a choice.

Utilities are power. They stay stable.

Financial services are a bit overvalued right now. Would I add more? Probably not. I am comfortable with the banks I hold, so I am not moving.

Which Sectors Take the Hit?

Consumer cyclical, consumer staples and industrials. That is also where the opportunities sit, because good businesses get sold alongside the bad ones.

Consumers get hit on both ends, discretionary and defensive. Staples too, which is the ironic part, because tariffs reach them the same way.

Everything tied to the consumer takes a hit one way or another.

Industrials is the other one, and it is already happening. That is the whole point of a tariff. Unless you move your manufacturing into the other country, you get slapped, and doing business gets harder.

You cannot move a plant within the month. It takes a lot of capital, and adapting a supply chain takes time.

That is where the digging starts.

I wrote about two other names that reached an entry point this way.

Two Quality Stocks Showing an Entry Point: Trane Technologies and AltaGas

Stantec (STN): The Engineering Firm the Market Gave Up On

A PRO rating of 4, a Dividend Safety score of 4, and five-year growth of 13.75% on revenue and 19.25% on earnings. The business is not slowing. The stock price is.

Stantec is a big engineering firm. Its top clients have been with it for more than 25 years and use several of its services.

It is getting hit right, left and centre. It might not win contracts in the US because it is Canadian. AI could replace it, but I don’t believe it will.

So you get a lot of dark clouds and a pessimistic narrative around the name. Then you look at the facts and the financial metrics, and you see high single-digit to double-digit numbers on revenue, earnings, cash flow and the dividend.

The backlog is strong. There are plenty of orders to fill over the next 12 months, so the business is not slowing down right now.

On valuation, Stantec trades at 21.7 times earnings against a five-year average of 35.9. The forward PE drops to 14.4. The forward yield of 1.02% sits above the five-year average of 0.84%, suggesting the stock offers better income value than usual. The earnings payout ratio is under 20%.

Four metrics, all pointing the same way, on a business whose order book is full.

Long client relationships are a moat, and I have written about how that kind of moat works.

Economic Moats: The 7 Types and 4 Stocks I Own

CGI (GIB.A): A Turnaround With a One-Year-Old Dividend

A PRO rating of 4, a Dividend Safety score of 4, and 12 times earnings against a five-year average of 19. The dividend only started in 2025, so the third leg of the triangle has no history yet.

CGI is a very big IT consulting firm. Most of its business comes from recurring, long-term contracts, many of which are government contracts, including with the US government.

It got hurt during that quick DOGE moment. Projects went on hold and the company saw a slowdown. The concern now is that it may not win new contracts, or may lose some of the ones it has.

That is narrative again. Do you really think anyone replaces CGI forever? It might be a rough couple of years. After that, the odds of a turnaround are decent.

I hold a small position, about 1% of my portfolio or not even. It is the riskier of the two I own. I find it an interesting play and an entertaining story to follow.

Why the Dividend Line Looks Flat on the Chart

CGI paid its first dividend in 2025, at $0.15 a share. It raised that by 13% to $0.17 in November 2025, and it has stayed there since.

That is why the chart below reads the way it does. The five-year dividend growth rate shows 0.00% and the dividend line looks flat. That is not a frozen dividend. It is a dividend with one year of history behind it.

Revenue and earnings carry the triangle here, growing 6.28% and 8.29% over five years. The third leg is still being built. Judge it again in three years.

On valuation, the current PE of 12 sits well under the five-year average of 19, and the forward PE is 10. The earnings payout ratio is 8%, which leaves plenty of room for the dividend to grow once management commits to it.

Adentra (ADEN): The Small Cap Flying Under the Radar

A distributor of architectural building products worth $847 million, trading at 9 times earnings, with about 90% of its revenue earned in the US. It is also the riskiest of the three.

Start with the warning, because it belongs first. This is a small cap. The market capitalization is under $1 billion, at $847 million. That means volatility. Expect a 25% drop any day of the week.

Be clear with yourself before you look at it. You invest in that kind of stock; it drops 20%, and you smile, because you knew it would happen.

Adentra distributes architectural building products, including wood, to home builders and the construction market. It runs 81 facilities across the US and Canada.

More than 90% of its revenue comes from the US, and more than 90% of its manufacturers are in the US too. When the first tranche of tariffs came out about 18 months ago, the CEO said 90% of the business was already sheltered, because the company is based there.

That is what makes it interesting. The PE sits around 9 or 10, and it is rare to find this kind of business at that rate.

The stock price has not really moved since 2024. Two years of dead money. It dropped a lot after Liberation Day and has come back, but not by much.

Now the part that keeps it in third place. Adentra is the only one of the three that does not clear the usual bar. Its PRO rating is 3 rather than 4, and the dividend triangle has a negative leg. Earnings per share fell 5.26% over five years, while revenue grew 11.25% and the dividend grew 9.51%.

The Dividend Safety score is still 4 and the earnings payout ratio is under 16%, so the payment itself is not the worry. The earnings trend is. That is the risk I would want to be paid for here, and this price pays for a lot of it. Whether that is enough is your call.

The Verdict

A big engineering firm, a big IT consulting firm, and a small distributor of building products that does most of its business in the US.

Stantec is the quality name, priced as though its order book were empty.

CGI is the turnaround, cheap against its own history, with a dividend too young to judge.

Adentra is the cheap one, and the one where the earnings trend has to turn before the story does.

All three sit in the sectors the tariffs are hitting. That is not a coincidence. It is where the discounts are.

One last thing. You cannot buy a stock because you read a 5-minute article. Dig further, make sure you understand the business, and decide whether it fits your portfolio.

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The post 3 Stocks to Get the Best Out of the Trade War appeared first on The Dividend Guy Blog.