The 2026 BTSX and Banking in May

 

I recently seen a post about how the BTSX Portfolio is performing so far in 2026 and it is beating the TSX index thanks to the energy stocks. I get some of my best portfolio ideas and stock/ETF picks from Blogs, newsletters and various sources. 

The latest BTSX news is from Cut the Crap Investing in a post entitled, The 2026 Beat the TSX Portolfio has the Energy to outpace the TSX Composite where Dale highlights the 2026 10 stock portfolio and follows up with additional stocks and ETF's, the majority of which I own.

Years back I had a loose plan for long term investing until I came across an article in Canadian Money Saver Magazine about the BTSX strategy and that eventually made for a more concrete foundation for my portfolio as I got more interested in the concept.

I eventually tweaked it and called it the Modified BTSX where I looked into each of the 10 stocks in the list and didn't buy all 10 where a company wasn't to my liking and I didn't sell all the stocks at the end of each year as per the plan. I looked further down the list of top 20 dividend paying stocks in the TSX 60 to add substitutes.

That original list keeps expanding and I'm pleased with the total return results. 

The BTSX held a few banks in past years but they have certainly climbed in price these days and valuations are high causing yields to come down with only the Bank of Nova Scotia or Scotiabank, BNS.TO making the 2026 list while owners of that stock are being rewarded with gains and dividends.

In the last week of May, the Big Banks of Canada are reporting earnings and as always, I'll be interested in seeing the numbers and overviews.

Looking at ETFs, RCDC.TO holds 5 of the banks and other top corporations in Canada. I'm getting overweight compared to the other ETFs I hold but with a current yield around the 7% range, it's providing the preferred monthly distributions for income. That's not investment advice. Just my opinion on one of the many bank related ETFs on the market.

Some of the more popular ETFs out there hold one or more of the Big Banks for a reason such as VDY and XEI. Stability, growth and dividends with increases.

XIU, the iShares S&P/TSX 60 Index ETF, with a low Management Expence of 0.18% also holds the top 5 banks in Canada in it's top 10 and gained about 7.5% while the BTSX is around 14.5% year to date where energy related stocks are surging over the ongoing US/Iran conflict.

In June, several of my high flying energy and pipeline stocks are on my ex-dividend calendar such as Canadian Natural Resources, CNQ.TO, Pembina Pipeline, PPL.TO and Keyera, KEY.TO in the first half of the month.

1st Quarter 2026 Earning Reports in May

 

Quarterly earning reports for the first three months in 2026 are coming out for my stocks in May and after reading the condensed news releases crunching the numbers, I have a look down through the financials on the company sites. 

However, it's just one quarterly report with what's going on in the economy or politically motivated in a given year that either weighs on a company in the short or long term or boosts it's earnings and outlook. 

I tend to focus on the money available to support dividends while some companies have different methods of supporting it such as Distributable Cash Flow, Funds From Operations, etc.

A good example is the Canadian Natural Resources, CNQ.TO first quarter report with some highlights about dividends. Here is the BOE Report link, https://boereport.com/2026/05/07/canadian-natural-resources-limited-announces-2026-first-quarter-results/

FIRST QUARTER HIGHLIGHTS

• Generated net earnings of approximately $1.3 billion and adjusted net earnings from operations of $2.4 billion.
• Generated adjusted funds flow of approximately $4.4 billion.
• Direct returns to shareholders totaled approximately $1.5 billion, comprised of $1.2 billion in dividends and $0.3 billion in share repurchases.
  • Year to date, up to and including May 6, 2026, the Company has returned a total of approximately $3.2 billion directly to shareholders through $2.5 billion in dividends and $0.7 billion in share repurchases.
  • 26 consecutive years of dividend growth with a CAGR of 20% over that time.
    • Subsequent to quarter end, declared a quarterly cash dividend on its common shares of $0.625 per common share.
  • Subsequent to quarter end, share repurchases were significant at approximately $309 million in April 2026.

The majority of the individual stocks I own are large cap in the top twenty ranked by yield in the TSX index.

With the Iran-US war still looking for a workable peace plan as of today, it's no surprise that my energy stocks are making more money with the price of oil remaining about $100 a barrel while the middle east supply is choked off for now. Back in February 2026, the price of oil was around $67 a barrel.

Meanwhile, the Markets are pushing up the price of stocks in that sector such as Suncor Energy.

Suncor, SU.TO reported a 50% increase in earnings from the 4th quarter of 2025 with 2.1 billion and boosted exports to countries looking for more oil to keep their economies moving along. Interesting and good timing is their Montreal refinery is producing jet fuel not knowing initially the high demand because of that war and began exporting more of the jet fuel and diesel as well.

Until the Iran conflict ends, getting back to normal oil and other commodity related shipping will take awhile to get back to expected time frames for delivery, I expect my stocks will stay elevated in price and may come down later. I was thinking of trimming and using the funds for other stock sectors with potential and dividend growth but then I'd be missing out on compounding dividend increases.

Reading up on preferred shares, I seen a rare Globe and Mail article about that very subject and got me interested where investors seek yields of 5% and higher on preferred shares starting at a standard price of $25 each. Catering more to income seekers than growth stocks.

Companies redeem these preferred shares from time to time for $25 with some investors looking to buy a preferred at lower than $25 to potentially make money on the company redemption plus earning the dividends while they watch and wait. The majority reset every 5 years with the yield and what's happening with central bank interest rates.

Unfortunately, there is not a lot of news or data on preferred shares compared to common stock but the opportunity is there to buy company preferred stock rather than paying more for common stock much higher than the Graham Number or Fair Value price range from analysts.

I experimented and looked at Brookfield Corporation Class A, BN.TO with a low yield of 0.61% currently but with a market cap of 30 billion. I'm an income seeker so I bought the series 32 preference shares, BN.PF.A with a yield of 6.47%. With a 52 week low of $23.45 and a high of $26.37, the current price is $26.06.

That may have me hooked into looking into more preferred shares with the companies I own which are more expensive from when I bought in the past but a good scenario to have with the total return. There are ETFs with preferred share holdings keeping in mind they are interest rate sensitive but pay distributions monthly such as BMO's ZPR, BMO Laddered Preferred Share Index. 

Under the Brookfield umbrella of companies, I do own units in Brookfield Infrastructure Partners LP, BIP.UN which pays their dividend in USD with a current 5% yield. BIP.UN has an ex-dividend date of May 29th.

In the second half of May I have ex-dividend dates on the calendar for financial insurance companies such as Sun Life Financial, SLF.TO, Manulife Financial, MFC.TO and others in that sector with a starting position in Sagicor Financial, SFC.TO I plan to add to which raised it's dividend by 11.11% in March of 2026.