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 invest in 2020 during the current
market crash and beyond in this video I'm only going to be talking about
dividend stocks in Canada I'll be making a separate video on the best u.s.
dividend stocks and the best growth stocks I picked these stocks because
they all pay a generous dividend they have a long history of increasing their
dividends they are staples of the Canadian economy so they will continue
to keep earning money even during this market crash and in the possible
recession and finally I picked these stocks from different industries giving
you a diversified portfolio of the Canadian market these are stocks that
you can hold onto for life and collect that passive income every month or every
quarter and now is an especially great time to buy these stocks at a huge
discount around 30% off make sure you check out my last video on how to invest
during a stock market crash so click the pop-up at the top right to watch that
video first before you jump into investing basically now is not the time
to panic and start selling stocks it is an incredible time to buy these
high-quality stocks at a huge discount but before you put a single dollar into
the stock market right now make sure you have enough saved up in your emergency
fund especially if you're worried about having your income reduced or even
losing your job in the next few months also in this video I'm gonna be breaking
down exactly why I think these stocks are great choices to invest in so I'll
be talking about things like dividends vs. capital appreciation dividend payout
ratio and the amount required to qualify for a DRIP if you need a refresher on
these dividend basics then click the pop up at the top right to check out my
playlist the dividend investing guide and then come back to this video so
without further ado let's jump into the best Canadian dividend stocks to buy in
2020 let's start with one of the best dividend investments in the world BMO
the Bank of Montreal with ticker symbol BMO.TO BMO it's one of the largest
companies in Canada it is the 4th largest bank and it is the oldest bank
in Canada it has been around for over 200 years honestly you can't go wrong
with any of the big five banks in Canada Royal Bank TD Scotia Bank BMO or CIBC
they are all world renowned banks and investments due to their security their
reliability and their strict regulations especially
compared to some of the big US banks if you saw my past video
on my top three Canadian dividend stocks of all time you know that TD is my
overall favorite Bank stock and I still agree even during this market crash but
I can't keep talking about TD every video so my second favorite Bank stock
is BMO in fact a lot of the reasons why I love TD stock are true for BMO as well
I think that TD has the greatest growth potential of any Bank mainly due to the
fact that they have been expanding into the United States and BMO is following a
similar strategy with great success so far another reason why I love BMO
especially right now is that BMO is not very reliant on the housing and mortgage
market especially compared to other banks like CIBC which are heavily
dependent on mortgages which is not the best place to be during a possible
recession don't get me wrong CIBC is still a great investment to make
I just think that BMO is a little bit better due to the recent drop in share
price BMO is currently paying out an astounding dividend of 6.3% paid
out every quarter you can buy the stock for a 34% discount off its regular price
just a few weeks ago the prices dropped by 34% but the dividend remains
unchanged which is why the dividend yield is so high right now my normal
rule of thumb is that any dividend above 6% is probably too good to be true but
not in this case even with such a high dividend BMO still has an extremely low
dividend payout ratio of 47% which is amazing this means that BMO only pays
out 47 percent of its profits out as dividends leaving 53 percent of its net
income to reinvest in itself and grow as a company here is an amazing fact BMO
has never missed a dividend payment in almost 200 years BMO has paid out its
dividend every single quarter since 1829 even through World War 1 World War 2 the
Great Depression the dot-com bubble the housing market collapse of 2008 BMO has
always paid out its dividend even better BMO increases its dividend almost every
single year which is exactly what you want from a long-term dividend stock
especially during a market crash also because of the reduced share price it is
now easier than ever to qualify for a DRIP with BMO remember a DRIP allows you
to reinvest your dividend and buy yourself more shares of a company rather
than receiving cash and the best part is you don't pay any Commission's at all
when you use a DRIP to buy extra shares this is the best way to invest in a
long-term allowing your dividends to compound automatically giving you true
exponential growth in the case of BMO you only need forty two hundred dollars
right now to qualify for a DRIP with a dividend yield of 6.3% our 4200
investment would give us two hundred and sixty four dollars a year in dividends
or $66.15 every quarter BMO currently has a share price of sixty
six dollars so every three months our dividends will allow us to purchase a
new share of BMO for free and then we receive the remaining fifteen cents as
cash remember this DRIP amount of $4,200 is so low because the share price is so
low right now once BMO stock recovers and returns to its normal price the
amount required to qualify for a DRIP will also increase to around the eight
thousand dollar range to find out how I calculated this required amount to
qualify for a DRIP click the pop-up at the top right to check out my video on
DRIPs where I go over the long term benefits of DRIPs and I provide a useful
Excel spreadsheet that you can use to calculate the DRIP amount for any stock
looking at the stock chart of BMO over the past 20 years you can see a very
clear and strong upward trajectory in the past 20 years there have been two
significant drops a huge drop this past month and a big drop during the 2008
housing crisis but you can see that BMO was able to recover in a matter of
months and continue its upward climb all about paying a generous dividend along
the way and number two let's move on to another industry which performs well
even during a recession and that's utilities my favorite utility stock
right now is Fortis ticker symbol FTS.TO Fortis is one of the largest utility
companies in Canada and it provides the transmission and distribution of
electricity and natural gas to over 3.3 million homes and buildings in Canada
and the United States this is the poster child of a strong dividend company
because no matter what is happening in the world whether it's an economic boom
or a recession people will need their gas and electricity and so a company
like Fortis will always be profitable and continue to pay consistent and
increasing dividends year after year Fortis is currently paying a great
dividend of 3.8 percent paid out every quarter the price of four to stock
dropped a bit by around 13 percent so even when things return back to normal
Fortis still pays out a great dividend yield of 3.5% like BMO the best thing
about Fortis is its consistency. Fortis currently has a super low
payout ratio of only 48 percent that means that only 48 percent its profits
go out to investors leaving 52 percent of his profits to grow as a company here
is a really cool fact Fortis is number 2 in the list of Canadian dividend
aristocrats a dividend aristocrat is a company which has increased its dividend
every single year for at least 25 years in a row this is a difficult feat and
there are only a handful of Canadian companies that have done this but Fortis
has increased its dividend for 46 years in a row it is just behind Canadian
Utilities who has a 48 year streak so in a few years Fortis and Canadian
Utilities will become the very first dividend Kings in Canadian history
meaning that they have increased their dividend for 50 consecutive years
that's incredible so how much do you need to invest in Ford is to qualify for
a DRIP? with the share price of $50 and a dividend yield of 3.8 percent you'll
need fifty three hundred dollars to qualify for a DRIP let's check it out
the 3.8 percent yield will give you two hundred and one dollars in dividends
every year or $50.35 every quarter that's enough to buy yourself a free share of
Fortis every three months without paying any Commission looking at the stock
chart over the past 20 years you can see a remarkably consistent upward climb
this is definitely a defensive stock it almost never drops in value even during
the last market crash of 2008 it barely had a noticeable dip and it always
recovers in a matter of months hold the stock for 20 or 30 years and you'll be
able to sell it for great capital gains all while collecting that passive income
year after year and number three let's move on to the real estate sector with
the REIT called allied properties ticker symbol AP.UN.TO remember a REIT is a
real estate income trust and there are a collection of hundreds or thousands of
properties packaged together as a stock and the dividends of these rates come
from the rent earned from these properties a lot of REITs which focus on
retail properties like shopping malls or plazas have been hit very hard by this
current state of emergency since stores are closed to the public
Allied properties however hasn't been affected that much because instead of
retail properties Allied focuses on offices and urban workspaces especially
in cutting-edge high-tech companies these are some of the fastest growing
companies in Canada and so the rent and the value of these offices will continue
to increase Allied owns a lot of the biggest tech hubs in Toronto Waterloo
and Montreal the building I work in along with the
new Google offices in downtown Kitchener Waterloo are owned by Allied and so I
know that the value of this REIT will continue to grow hand in hand with
Canada's booming tech sector allied currently pays out a generous dividend
of 3.7 percent but the best part is that they pay out their dividend every month
not just every quarter so with allied you'll receive 12 dividends every year
whereas most stocks only pay you 4 that's because REITs make their income
through rent which is collected every month and so as an investor you get a
portion of that monthly rent one of the best things about allied is that they
have an incredibly low payout ratio of only 28% so they pay out 28% of their
profits to you through dividends and so they get to keep 72 percent of the
profits to buy even more property which allows the company and thus your stock
to grow further in value all this extra spending money allows allied to increase
their dividend every single year and they've done so for the past 10 years
and with such a low payout ratio even if something catastrophic happened and
their profits were hit hard they would still be able to afford dividends and
continue to increase them every year since Allied pays out a monthly dividend
the actual dividend amount you receive each month will be smaller than the
other stocks on this list and so it will require a larger amount to qualify for a
monthly DRIP with allied you'll need to invest fourteen thousand six hundred
dollars which is a lot with a dividend yield of 3.7 percent that gives you five
hundred forty dollars a year in dividends or forty five dollars per
month that's just enough to buy yourself a free stock of Allied every single
month Commission free that's 12 free shares every year looking at the stock
chart over the past 20 years you can once again see a very clear upward
trajectory there have been a few drops along the way such as the housing market
crash in 2008 but every time, Allied was able to recover within 16 months and
every month along the way investors continue to earn that passive income I
should note that with all of these stocks in this video you should hold
them in your TFSA and if that's maxed out then hold them in your RRSP that way
you won't pay any taxes on the dividends you receive or on the capital gains you
make when you sell these stocks these tax sheltered dividends will allow your
investment to grow much faster than they would in a non-registered account this
is especially true for REITs like allied or RioCan which are not
considered eligible dividends and so you would pay higher taxes on these
dividends than you would for BMO stock for example so make sure to keep your
REITs in a TFSA or an RRSP to avoid this tax entirely check
out my video on how to invest in your TFSA to learn more about how to
minimize your tax bill and maximize your long-term growth finally at number four
let's move on to the telecommunication sector with Telus ticker symbol T.TO
Telus is one of the three telecom Giants in Canada along with Rogers and Bell these
three companies hold such a strong monopoly on the Canadian telecom market
that I don't think it's ever possible for any new or outside company to ever
compete with them and that means that Telus is never going away telecom
companies are very similar to utility companies in the sense that they are
always in demand no matter what is happening in the world people will
always need access to the Internet and mobile devices and the demand for this
technology will only continue to grow with each generation so a company like
Telus will always be profitable and thus they will always be able to pay out
consistent dividends and increase these dividends year after year tell us it's
currently offering an amazing dividend of 5.5% paid out
every quarter Telus normally pays out a generous dividend but over the past
month the stock price has dropped by over 20 percent this is a huge discount
for a blue chip stock like this the reason why I choose tell us over Rogers
and Bell is because of its consistency tell us has a great payout ratio of 76%
that means that 76% of its profits go out to investors leaving 24% of its
profits to reinvest in itself as a company this extra spending money
ensures the security of its dividends in fact tell us has increased its dividends
every single year for 16 years straight that's exactly what we look for in a
long-term dividend stock with a current share price of $21.50 you will only need
1600 dollars invested in Telus to qualify for a DRIP with the yield of 5.5 percent
that's $1600 investment we get you 88 dollars a year in dividends or 22
dollars every quarter that's enough to buy yourself a free share of Telus
every quarter plus you'll get 50 cents in change for every $1,600 you invest
in Telus you'll earn yourself a free share every three months of course as
the stock price bounces back up to normal the required DRIP amount will go up as
well but even if the stock price reaches 29 dollars a share which is higher than
its all-time max you'll only need 3,000 dollars invested to qualify for a DRIP
that's great so you only need 3,000 dollars invested and tell us and then
you could sit back and watch your investment grow and compound on
autopilot looking at the stock chart over the past 20 years you can
definitely see some ups and downs in the early 2000s but
after the emergence and popularity of smartphones starting in 2009 you can see
a clear upward trajectory if this trend continues we can expect to see
considerable capital appreciation all while collecting those increasing
dividends year after year for all these stocks make sure you are buying them on
the toronto stock exchange in Canadian dollars all of them accept allied are
cross listed on the New York Stock Exchange in u.s. dollars
so to avoid paying unnecessary currency conversion fees make sure you include
the ".TO" in the ticker symbol to ensure that you're buying it from the
toronto stock exchange if you're not sure how to actually buy these stocks
click the pop-up at the top right to watch my Questrade tutorial where I
give a step-by-step walkthrough of 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 fifty dollars in
commission free trades when you sign up that basically means that your first ten
stock trades will be commissioned free that saves you $50 plus I'll get a small
referral bonus as well so there you have it those are my top four best Canadian
dip in stocks to invest in 2020 especially during this market crash BMO
is currently offering the highest discount and dividend yield with a huge
potential for growth Fortis is the most consistent stock here with dividend
increases every year for 46 years straight Allied properties allows you to
dip into the real estate market while collecting monthly dividends and Telus
allows you to take advantage of DRIPs with only a small investment while still
increasing dividends every year thanks for watching guys be sure to LIKE
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and I'll see you guys on the next episode of the Canadian in a T-Shirt. Bye guys!