Since launching in May, the Dividend Champions Portfolio performance has been flat but still managed to outperform its benchmark, the Thomson Reuters Canada Equity Index, which lost 3.2% over the same period. The volatility, or risk, of the Dividend Champions Portfolio is also considerably lower than that of its benchmark.

The best-performing stock in the portfolio over the past month was Canadian National Railway Co. (TSX: CNR, NYSE: CNI), which returned 12%. The company recently reported solid quarterly results and a 25% increase in the dividend. We first spotted the share price weakness in May and highlighted the stock as an investment opportunity in that month’s issue.

North West Company Inc. (TSX: NWC, OTC: NWTUF) was another top performer
returning 11% after announcing market-pleasing quarterly results. We increased the portfolio’s weight in the stock last month. We describe the merits of this quality rural grocery retailer in detail on page 5 of this issue.

Other top performers over the past month include George Weston Ltd. (TSX: WN, OTC: WNGRF) and Choice Properties REIT (TSX: CHP-U, OTC: PPRQF), which added 11% and 8%, respectively.

Among the laggards, we (again) note the names of the energy-pipeline companies, Pembina Pipeline Corp. (TSX: PPL, NYSE: PBA) and Inter Pipeline Ltd. (TSX: IPL, OTC: IPPLF), which lost 7% and 8%, respectively, as the renewed decline in oil prices caused some concern about the profit outlook for these companies.

WestJet Airlines Ltd. (TSX: WJA, OTC: WJAVF), a stock we highlighted in July, lost 14% over the past month as investors fretted over the airline industry’s increased capacity and WestJet’s declining load factor (the average percentage of seats filled). Fortunately, the company’s recent results made for good reading, with profits up 30% and the dividend rising 17%, prompting a nice bounce in the share price. Cash flow in the business remains sound, supporting a healthy balance sheet that now holds net cash of C$149 million.

The valuation is also attractive. With a 2015 price-to-earnings ratio of 7.5 times and a dividend yield of 2.3%, WestJet trades at a substantial discount to its peers. The airline is a quality operator in a competitive industry, but we believe investors will be adequately compensated for the risks.

Buy WestJet below C$27.

Fortis’s share price declined about 10% from its January peak as utility stocks fell out of favor. However, the dividend yield is now 3.7% with reasonable growth prospects. We recommend buying more shares.

Buy Fortis up to C$39.

The portfolio now holds about 1% in cash, which we will continue to invest as opportunities arise.