Prices are Oct. 2, 2026 TSX closes. All dollar figures are Canadian.

Most Canadian investors already own every major Canadian bank without ever having decided to buy one. A broad TSX index fund holds all six, a balanced fund holds all six, and so does the dividend mutual fund your advisor chose a decade ago. I am in that position. When I say I’m thinking about buying a Canadian bank stock, I am not really asking whether to get bank exposure, because I have it. I am asking whether any one of the six deserves to become a deliberate overweight, a bet that this particular bank will outperform its weight in the index I already hold.

That is a different question from the ones bank articles usually answer. It is not which bank is largest, which has the highest dividend, or which is the “best company.” Those can have different answers, and in this case they do. The best business, the best historical compounder, the cheapest stock, the highest income and the best purchase at today’s price are not the same bank, and treating them as one is how people end up with a 3.5% yield and a decade of disappointing returns.

Every month, a meaningful chunk of the typical Canadian household budget disappears into wireless plans, home Internet, perhaps a television package nobody watches properly, and increasingly a second or third mobile line for the family. For this article, I am going to use C$250 a month, or C$3,000 a year, as a simple hypothetical household telecom bill. It is an illustration, not an estimate of the current national average.

The investor’s version of grievance is obvious. If I am going to keep sending these companies thousands of dollars a year, perhaps I should own enough of them to get some of it back. Call it the moral hedge. A Bell price increase shows up on my statement, and a Bell dividend shows up in my brokerage account, and the two feel faintly related even though they have nothing to do with each other. It is a good hook and I intend to use it, but resentment toward a monthly bill is not an investment thesis. The only question that matters is whether BCE, TELUS, Rogers, Quebecor or Cogeco offers enough value, sustainable cash flow and long-term growth to deserve a place in my portfolio as an individual stock, rather than as the small slice of each that my index funds already hold.

I own both CN and CPKC. I also own them a third way, through the Canadian index funds and mutual funds that hold both almost by default. So when I ask which railroad I would buy next, I am really asking about the margin: what an extra C$10,000 should do in a portfolio that already has a fair amount of both.

Part of what I like about railroads is that they are infrastructure whose physical replacement value is enormous. Canada is not going to wake up one morning and decide that railways are obsolete. The economic cycle will keep turning, commodity prices will swing, governments will change and trade routes will shift, but the country still has to move grain, potash, crude and chemicals, automobiles, containers, lumber, metals and consumer goods across a very large piece of geography, and trains are still the cheapest way to do much of it. Nobody is going to build another CN or another CPKC from scratch. The rights-of-way, the urban corridors, the bridges and tunnels, the yards and terminals, the port connections and the signalling systems took more than a century to assemble, and the political and environmental approvals required to repeat the exercise today would take longer than most investment horizons. Inflation makes the theoretical bill higher every year.

If my family spends $15,000 a year on groceries and grocery prices rise 3% a year, the bill in twenty years is about $27,000. That is roughly $12,000 a year more than we pay now, and about $115,000 of extra grocery spending along the way.

Canadians have an obvious thing to say about this, and we say it constantly. Grocery prices are too high. The industry is concentrated. Loblaw, Sobeys and Metro make billions of dollars.

So here is a tidy Canadian idea. If Loblaw, Metro and Empire, the parent of Sobeys, really are earning more as grocery prices rise, why not own them? Collect the dividends, let the shares compound, and get a little of the money back from the checkout counter.

I wanted to know whether that actually works.

The answer is yes, but not for the reason I expected.