With AI-related stocks dominating both the business news cycle and S&P 500 performance, it’s not surprising that many high quality names have been overlooked despite posting solid results. This is the case for several of the positions in DM US Equity, a profile which is exemplified by Visa Inc., a company we’ve held since the year it went public. In its recently released Q1-26 earnings report, the company handily beat analyst estimates for income and posted its largest revenue increase since 2022. As per the chart below, Visa has been a prodigious grower of free cash flow throughout its history and, despite the purported threats of crypto, buy-now-pay-later services, and other fintech innovations, that growth rate has not slowed in recent years. This attribute is especially notable at the moment, with many of the market’s previous cash flow stars now deploying most or all of that capital to the artificial intelligence buildout. In fact, the free cash flow yield on Visa shares is now nearly 4%, which compares favourably with the 4.5% yield offered on a 10-year US government bond. The reason this comparison is attractive is because, while a government note purchased today will pay the same rate throughout its decade life, Visa has historically grown free cash flow at a compounded rate north of 20%. Even if this growth were to be cut in half going forward, the stock would still rise by about 160% over the next 10 years, assuming that its current multiple to cash flow remains unchanged. At the same time, Visa isn’t resting on its laurels: it’s actively repositioning itself from a pure card network to a “hyperscaler” of payments, adding a cloud-like infrastructure layer to move money in different ways. Instead of only handling consumer to merchant purchases, Visa is grouping its technology into modular services and delivering them through a single API–driven “Visa-as-a-service” stack that banks, merchants, and other fintech companies can plug into; the company also recently partnered with OpenAI to enable secure payments within agentic commerce. Despite its strong results and proactive positioning for the future, Visa shares are down over the past year, reflecting the current plight — and opportunity — of many stocks which find themselves outside of the artificial intelligence limelight.
Portfolio Activity
During May, we used accumulated cash in DM Canadian Equity to add to Element Fleet Mgt., Boyd Group, and Stella-Jones. In DM US Equity we sold TopBuild and trimmed weights in Alphabet and Lowe’s Cos. to add to Berkshire-Hathaway, Domino’s Pizza, and Heico Corp.
Feature Stock
Constellation Software (CSU)
We last highlighted software consolidator CSU in October 2023, noting the company’s disciplined approach to M&A and the fact that it had funded every purchase internally, without issuing a single additional share over its history. Through the ensuing year and a half, CSU shares climbed by more than 80%, making it one of the top performers in the TSX; since mid-2025, however, CSU has been battered by the pervasive fear that artificial intelligence, and specifically AI coding tools, will drain the moats that have allowed software companies to charge premia for their products and maintain outsized margins. While this development definitely merits consideration, we felt that the market reaction was excessive. CSU is focused on vertical market software, which tends to be sold to departments rather than across companies and it emphasizes service in its offering, both of which provide defense for its products. As well, sector dislocation has probably just expanded its shopping list. We’ve added to CSU several times in recent weeks and the stock has since rallied more than 30% from its February low.