hey guys it's adrian here the canadian in a t-shirt and today i'll be breaking down the
best canadian dividend stocks to buy at a discount in 2022. right now the stock market as a whole
is plummeting and that can definitely be scary especially for a new investor but remember as long
as you are investing in quality companies with a solid future do not panic and do not sell i've
talked about this in my past videos but giving interfere and selling stocks at a loss is the only
way you will actually lose money right now instead look at this market downturn as an opportunity
to buy more quality stocks at a discount and that's what this video is about these are some
of my favorite canadian dividend stocks that i am buying right now while they are on sale due
to market panic the share price of these stocks has dropped but nothing has fundamentally changed
about these companies they are still the same quality companies earning profits year after year
but now they are on sale around 20 off so with the same amount of money i can buy more shares take
advantage of that higher dividend yield and earn myself incredible capital gains when these stocks
recover in the next several months but i want to warn you just because the stocks price is dropping
does not mean that it's on sale as i talked about in my how to analyze stocks video many stocks in
the tech sector were incredibly overvalued and their huge share prices were propped up solely
by hype and speculation some of these companies didn't even earn a profit so now just because the
price is dropping by over 50 percent doesn't mean that you should buy them you don't want to catch
a falling knife and if these companies don't have a fundamental future they might continue to drop
and may never recover the stocks i'm covering in this video have a proven track record and a long
history of earning profits and growth year after year even through bad times these are the kind of
stocks that you want to buy and hold especially when they are on sale i'm going to be breaking
down why i think these stocks are great choices so i'll be talking about things like dividends
versus capital appreciation the payout ratio and the amount to qualify for a drip if you need a
refresher on these basics click the pop-up at the top right to check out my dividend investing guide
and then come back to this video so with that let's jump into the best canadian dividend stocks
during the market crash i've already talked about the big banks many times but i do want to touch
on the financial industry with a strong dividend player manulife financial ticker symbol mfc.to
manual life is among the 20 largest canadian companies and it's actually the largest insurance
company in the country but it's so much more than just insurance like the big banks it's one of the
oldest and most established financial institutions it's been around for over a hundred and thirty
years so it's been through it all world wars recessions any crisis you can imagine and they're
still here and offering a huge variety of products and services as you'd expect they offer all types
of insurance health insurance either privately or through your employer's health plan life insurance
travel insurance mortgage insurance and others outside of insurance they also offer bank accounts
mortgages credit cards gics loans and investing through mutual funds manulife is actually one of
the top 30 largest fund managers in the world and these financial and insurance services
are always in demand even during a market crash and while rising interest rates hurt the profits
of most industries when it comes to the financial sector higher interest rates can actually help
with rising interest rates manulife can boost the revenue from mortgages lines of credit and loans
it's not quite this simple but the point is that once the initial fear of interest rates goes away
the financial companies like manulife can actually benefit from this whereas most industries can't
that's why buying a stock like manulife at a discount is such a great opportunity right now
if you're canadian chances are you've had an employer insurance plan with manulife
but beyond canada they have over 30 million customers worldwide in the united states
manulife operates under the brand john hancock but they are even more successful in the asian market
where they continue to expand in fact manulife now makes more money in asia than they do in canada
and there is so much room for further growth because manulife is so consistently profitable
they've always been able to pay a great dividend and with their current drop in share price their
dividend is better than ever with a fantastic yield of 6.2 percent paid out quarterly in the
past two months the share price has dropped by around 20 to a price of 21.50 this is a wonderful
opportunity the share price dropped by 20 but the dividend remained the same so we're seeing an even
higher dividend yield than usual at a whopping 6.2 percent in fact manulife actually increased their
dividend back in november by 18 and even with this higher dividend manulife still has an extremely
low payout ratio of 27 percent which is absolutely incredible that means that only about a quarter of
its profits go out to investors through dividends leaving it with three quarters of its net income
to reinvest in itself and grow as a company and further expand into asia and other markets
because of this super low payout ratio manulife's dividend is very secure and we can expect another
dividend raise later this year in fact manulife has increased its dividend every year for the past
eight years which is exactly what you want from a long-term dividend stock even better because
of its reduced share price it's now easier than ever to qualify for a drip with manulife remember
a drip allows you to reinvest your dividend and use it to buy more shares of a company rather than
receiving cash and the best part is you don't pay any commission at all when you use a drip
to buy these extra shares this is the best way to invest in the long term allowing your dividends to
compound automatically giving you true exponential growth in the case of manulife you only need about
fourteen hundred dollars right now to qualify for a drip which is awesome most of the banks
require over ten thousand dollars to get a drip but with manulife you only need fourteen hundred
dollars right now let's go through the math with a dividend yield of six point two percent our
fourteen hundred dollar investment would give us 86.80 per year in dividends or 21.70 per quarter
manulife currently has a share price of 21.50 so every three months our dividend will allow
us to purchase an extra share of manulife for free and then we received the remaining 20 cents
as cash remember this drip amount is so low right now because the share price is so low
once the share price recovers to its normal price it will take a bit more money to reach the drip
around two thousand dollars which is still one of the easiest drips you'll find to find out how
i calculated this drip amount click the pop-up at the top right to check out my drip explained video
where i go over the long-term benefits of drips and i provide a free excel spreadsheet that
you can use to calculate the drip amount for any stock you want looking at the stock price over the
past three years you can see the massive crash in march 2020 but manulife was able to fully recover
and reach new heights in a matter of months i invested heavily in manulife at this low point
as i talked about in this past video and when it recovered i was awarded with excellent capital
gains and passive income along the way now we can see a smaller but still significant drop
these past two months and once again i'm gonna seize this opportunity and buy more shares at a
discount and once again i expect to see the stock rebound in a few months but until then i'll enjoy
those fantastic and increasing dividends every three months if you're not sure how to actually
buy these stocks click the pop-up at the top right to watch my quest rate tutorial where i give
a step-by-step walkthrough on how to buy stocks and etfs using questrade my favorite online broker
and if you'd like to get started with questrade click my referral link in the box below and you'll
get 50 in commission free trade rebates for the first 30 days when you sign up that basically
means that your first 10 stock trades will be commission free that saves you 50 plus i'll get
a small referral bonus as well next we move into the real estate sector with one of the largest
reits in canada called smart centers ticker symbol sru.un.to a reit is a real estate investment trust
this is a collection of hundreds of real estate properties packaged together as a stock and the
rent from all of these properties goes back to investors as dividends or distributions they're
basically a way to tap into the real estate market through the stock market so you don't need a
hundred thousand dollars for a down payment check out my reits explained videos to learn more smart
centers is a retail read so it owns hundreds of large shopping centers and the individual stores
are their tenants who pay them rent smart centers actually avoids indoor shopping malls 98
of their tenants are open air shopping centers and plazas this is a good strategy because if we have
another pandemic the open air stores will remain open for business even better the majority of the
tenants of smart centers are essential businesses like grocery stores and pharmacies so even during
lockdowns they'll remain open and pay rent the best thing about smart centers is their focus
on quality tenants in major intersections they have an occupancy rate of over 97
and monthly rent collections of almost 99 which ensures their consistent monthly income speaking
of quality tenants over 70 of smart center properties are anchored by a walmart which
is by far the biggest and busiest retailer not only is walmart an essential business as a grocery
store but having a walmart attracts customers to these shopping centers so the other stores gain
business as well this allows the reit to charge higher rent since any store would want access
to the higher traffic of customers in addition to walmart their quality tenants are all staples of
canadian shopping like loblaws shoppers drug mart canadian tire best buy dollarama costco and lcbo
they've also spent the last two years on massive projects in vaughan cambridge and ottawa to expand
into other sectors like residential hotels and city centers all while maintaining a retail focus
because of their reliable income and growth from these quality tenants smart centers has always
been able to pay a generous dividend every month and with the recent drop in the share price their
dividend is even better with a massive yield of seven percent that's incredible if you buy
shares of smart centers right now you'll be buying them at a 20 discount from just two months ago and
that's what i'm doing of course rising interest rates hurt the real estate sector as a whole
but with quality tenants smart centers is still incredibly profitable and they absolutely will
recover but having a large dividend yield is not enough we have to make sure it is sustainable
and when it comes to reits using a dividend payout ratio is not the best metric remember from my
reits explained video i broke down how net income or earnings is not the best way to evaluate a reit
since it doesn't account for the depreciation of its properties when it comes to reits you should
look at the funds from operations or ffo instead the ffo is much more representative of the true
cash flow of the reit so to tell if a dividend is sustainable we look at the ffo payout ratio
in the case of smart centers they have an ffo payout ratio of 83 that means that only 83 of
their income from regular business activities goes out to investors as dividends or distributions
leaving the rest to buy more properties and expand many reits have an ffo ratio above 90
so this tells us that smart center's dividend is sustainable even with this huge dividend yield and
with this discounted share price and the higher yield it's very easy to qualify for a drip you'll
only need forty seven hundred dollars invested to qualify for a drip and this is a monthly drip
with a dividend yield of seven percent our forty seven hundred dollar investment would give us 329
a year in dividends or 27 and 40 cents every month the share price is currently at 27
so every month our dividend will buy us an extra share that's 12 shares every year totally on
autopilot looking at the share price over the past three years you can see the massive crash
in march 2020 and a quick recovery a few months later and then it continued its upward climb now
we're seeing a 20 slump but once again this stock will recover with a retail reach we care more
about that monthly passive income than long-term capital appreciation but if you buy shares now
at this discounted price we'll also earn some great capital gains once the market recovers
at number three let's look at an industry that always performs well even during a recession and
that's utilities my favorite utility stock in canada is fortis ticker symbol fts.t.o fordus
is one of the largest utility companies in canada and it provides a transmission and distribution
of electricity and natural gas to over 3.4 million homes and buildings across north america
fortis is the definition of a defensive dividend stock because no matter what is happening in the
world no matter what season we're in through good times and bad people need their electricity and
gas these are essentials their services are always in demand so a company like fortis will always be
profitable to make this company even safer almost all of its income comes from highly regulated
long-term utility contracts so the company essentially has guaranteed cash flow for years
or even decades down the line this allows the company to pay consistent and increasing dividends
year after year since the market downturn for this stock has dropped by 10 so if we buy these shares
at this 10 percent discount we'll be locking in an inflated dividend yield of 3.7 percent
sure this dividend isn't as high as the others on this list but you cannot beat its consistency they
currently have a dividend pair ratio of 80 percent which is on the low end especially for the utility
sector right now so these dividends are definitely sustainable and will continue to grow we just saw
a dividend raise in november and we'll definitely see another race by the end of the year in fact
with its long-term regulated contracts fortis has already set aside the capital to deliver a six
percent dividend increase every year until the end of 2025 and likely beyond but this is my favorite
fact about fortis they have increased their dividend every single year for 48 years in a row
that is absolutely incredible this makes them the second longest-running dividend aristocrat
in canada we can almost guarantee another dividend increase in november so by the end of next year
fortis will become the second canadian company ever to reach the status of a dividend king a
dividend king means that they have increased their dividend every year for 50 years straight and i
cannot wait for fortis to reach that incredible milestone so how much do you need to invest
in forest to qualify for a drip with a share price of 58 dollars and a dividend yield of 3.7
you'll need 6 hundred dollars to qualify for a drip let's check it out the three point
seven percent yield will give you two hundred and thirty three dollars a year in dividends
or fifty eight twenty seven every quarter that's enough to give us a free share of fortis
every three months without paying any commission looking at the share price over the past three
years you can see an overall upward trend even through the market crash of 2020 we had a solid
recovery and now we see another significant drop of about 10 which again it will recover from but
for a defensive stock like fortis let's zoom out to 20 years to see its remarkable and consistent
upward climb this is why we call it defensive it almost never drops in value even during major
crashes like 2008 it barely had a noticeable dip and it always recovers within a matter of
months hold the stock for 20 or 30 years and you will be able to sell for reliable capital gains
all while collecting that passive income year after year for all these stocks make sure you're
buying them on the toronto stock exchange in canadian dollars always include the dot
to in the ticker symbol to ensure you're buying it on the tsx these are canadian companies so
there's no reason to waste money converting them into us dollars and to actually buy these
stocks check out my referral link down below to sign up with questrade my favorite online
broker and you'll get 50 in commission free trade rebates for the first 30 days when you sign up
and you'll help to support my channel and since these are purely canadian stocks you can also
use wealth simple trade you can use my referral link down below to get a 25 sign up bonus as well
so there you have it those are my top three canadian dividend stocks to invest in 2022
during this market crash manulife pays a huge dividend and is very easy to qualify for a drip
smart centers allows you to dip into the retail real estate market and collect monthly dividend
income and fortis is the most consistent and defensive stock with dividend increases every year
for 48 years straight thanks for watching guys and be sure to like comment and subscribe if you found
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thanks everyone and i'll see you guys on the next episode of the canadian in a t-shirt bye guys