hey guys it's Adrian here the canadian in a t-shirt and today
i'll be breaking down some more of my favorite canadian dividend stocks to
invest in 2020 during this current market crash and
beyond in this video i'm only going to be talking about
dividend stocks in canada i've already made a separate video on the best u.s
dividend stocks so check that out these are stocks that i'm personally
investing in during this market crash and i pick these stocks because they all
pay a generous dividend they have a long history of increasing their dividends
and they are staples of the canadian economy so they will continue to be
profitable and earn money even during a recession
these are all well-established and secure companies that you can rely on
although one of the stocks on this list is definitely riskier than the rest
so i'll be saving it for last i picked these stocks from different industries
giving you a diversified portfolio of the canadian market and no
i'm not going to be talking about canadian banks i've already covered the
banks in detail in my past videos as well as my other favorite dividend
stocks that i own so click the pop-up at the top right to check out that playlist
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 percent off investing during a
market crash is a huge opportunity but it can be
scary so make sure you check out my past 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 sell
stocks it is an incredible opportunity to buy
these top quality stocks at a huge discount but before you put a
single dollar into the stock market make sure you have enough money saved up
in your emergency fund especially if you're worried about losing your job in
these next few months also in this video i'm gonna be breaking
down exactly why i think these are great choices
so i'm gonna be talking about things like dividends versus capital
appreciation the payout ratio and the amount required
to qualify for a DRIP if you need a refresher on these basics
of dividends 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 part two of my best canadian dividend
stocks to buy in 2020. i'm not going to talk about any
banks this time but i will talk about the financial sector
starting with our first stock manulife financial ticker symbol
mfc.to manulife is the largest insurance company in canada
and like the big banks it's one of the oldest and most established financial
institutions in the country it's been around for over 130 years
the great thing about manulife is that they offer a huge variety of
services and products 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 in fact they are one of the top 30
largest fund managers in the world these insurance
banking and investing services are always in demand even during a market
crash most canadians have probably had a
manulife insurance plan at some point in their life but manulife
is also very successful in the united states and in asia with over 30 million
customers worldwide in particular the expansion of manulife
into the asian market has been so successful that they're actually making
more money in asia than they do in canada
and this will only continue to grow because manulife is always so
consistently profitable they've always been able to pay a great
dividend but with the recent drop in share price in march of 2020
manulife is now paying an even higher dividend of 5.7 percent
paid out every quarter the stock has started to climb up since march
but it's still selling at a huge discount about 30% off of its regular
price this is a fantastic opportunity the
share price has dropped by 30% but the dividend remains the same which
is why you should invest now to take advantage of these great
dividend yields even with such a high dividend
manulife still has an extremely low payout ratio of 54%
that's amazing that means that only about half of its profits
go out to investors through dividends leaving it with half of its net income
to reinvest in itself and grow as a company because of its super low payout
ratio main life's dividend is extremely secure
and likely to increase again in fact manulife has increased its
dividend every single year for the past seven years which is exactly what you
want out of a long-term dividend stock also because of its reduced share price
it's now easier than ever to qualify for a DRIP
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 invested to qualify for a DRIP which is awesome
but let's check the math with a dividend yield of five point seven percent
our $1400 investment would give us $79.80 in dividends every year or
$19.95 per quarter manulife currently has a
share price of $19.60 so every three months
our dividend would allow us to buy an extra share of manulife for free
and then we receive the remaining 35 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 value the amount required to qualify for a DRIP will also increase so
keep that in mind to find out how i calculated the amount
required to qualify for a DRIP click the pop-up at the top right
to check out my DRIP video where i go over the long-term benefits of a DRIP
and i provide a useful excel spreadsheet that you can use to calculate the DRIP
amount for any stock you want looking at the stock price over the past
10 years you can definitely see some ups and downs but there is an overall
upward trend every time it did drop it was able to recover in a matter of
months of course the biggest drop happened this
past march during the market crash and this is a great opportunity to buy
this stock at a price that we haven't seen in over four years
it will recover in a matter of time and you'll collect that great dividend along
the way at number two let's look at another
industry which always pays reliable dividends
and that's the energy sector i've already talked extensively about
enbridge but another canadian energy stock that i love
is tc energy ticker symbol trp.to you might know them as trans-canada
pipelines but they renamed it in 2019 to tc energy to emphasize the energy
aspect of their business but also to show that they operate across all of
north america not just canada they have a massive
network of natural gas pipelines in fact they transport over 25% of all
the natural gas in canada united states and mexico in addition to
natural gas distribution they also operate oil pipelines
and electricity production and storage they run multiple nuclear power plants
as well as natural gas power plants to generate electricity
all across the continent this power generation division is always profitable
and always in demand even during an economic crash people
still need their electricity which is why this company can always pay such
reliable dividends you might be worried about its oil
division since the price of oil plummeted a few months ago but the great
thing about tc energy is that they don't produce and
sell oil they just transported across their pipelines so their profits aren't
nearly as affected by the volatile oil prices
in fact their pipeline revenue comes from long-term rate regulated contracts
so they're pretty well insulated from changing oil prices
tc energy currently pays out a fantastic dividend of five percent
paid out every quarter the stock is currently trading at about a fifteen
percent discount from before the crash so even when prices return to normal
tc energy still pays out a great dividend of around 4.4%
this dividend is extremely reliable
because of its consistent profits regardless of the economic climate but
also because of its solid dividend payout ratio
of only 68% this payout ratio is much lower than most of the other
companies in the energy sector many of which have ratios above 100% this
ratio means that 68% of its profits go out to investors
leaving it with 32% of its net income to grow as a company
and finance new projects this dividend is definitely sustainable
and most likely it will continue to increase
every year in fact tc energy has increased its dividend every single year
for the past 20 years and they are not going to end that streak anytime soon
so how much do you need to qualify for a DRIP? With a share price of $65
and a dividend yield of 5% you'll need $5300
invested to qualify for a DRIP let's check it out the five percent yield will
give you $265 a year in dividends or $66.25 every
quarter that's enough to buy yourself a free share of tc energy
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 there have been some notable drops in value but it was always
able to recover in a matter of months currently we're in the middle of one of
these drops TC energy has already started to recover
but now is still a fantastic opportunity to buy the stock at a great discount and
take advantage of those boosted quarterly dividends
at number three let's look at an industry which always performs well
even during a recession and that's utilities and this stock
has a very simple name canadian utilities ticker symbol
CU.TO i briefly mentioned this company in my last video when i talked
about fortis another fantastic utility stock like
fortis canadian utilities is a great defensive stock with
consistent profits reliable dividends and the longest running streak of
dividend increases in canada this is due to the fact that the
profits come from long-term rate regulated contracts so you can always
count on this income no matter what is happening in the world
as you can probably guess canadian utilities operates utilities in canada
so they provide the transmission and distribution of electricity and natural
gas all across the country on top of that
they're also involved with power generation and storage
plus water utility services no matter what is happening in the economy whether
it's a boom or a recession people will always need their
electricity and their gas and so canadian utilities will always be
profitable and so they'll continue to pay out and
increase their dividend every single year
currently they're paying a great dividend yield of 5.25%
paid out every quarter this is a great time to invest since they're selling the
stock at a huge discount around 22% off of the price in march
before the crash even with this large dividend yield it
still has a solid payout ratio of only 77% which is in line with
most utility companies this means that 77% of its profits go out
to investors leaving it with 23% to invest by
expanding operations and infrastructure by far the best thing
about canadian utilities is its consistency in my past video when
i talked about fortis i said that they had the second longest
running streak of dividend increases but the top spot goes to canadian
utilities with a staggering record of 48 years canadian utilities has
increased their dividend every single year for 48 years in a row
that's incredible they are the longest running dividend aristocrat in canada
and in two years they'll become canada's very first
dividend king meaning that they've increased their
dividend for 50 consecutive years there is no way that this company is
going to cut their dividend and miss out on this
historic moment so buy the stock and hold on to it for decades
to grow your passive income year after year with the current share price of
$33 you'll only need $2,550
to qualify for a DRIP let's run the numbers with a dividend yield of
5.25% your $2550 investment would get you $133
a year in dividends or $33.46 every quarter that's enough to get you a free
share of canadian utilities every three months and it doesn't take a
lot of money to get to that point looking at the stock chart over the past
20 years you can definitely see some steady growth for the first part of the
century but over the last eight years it's been pretty flat overall
just some seasonal fluctuations but no overarching growth again this is a very
defensive and well established company we don't really expect it to appreciate
too much in value but we can rely on it to always be profitable and so we can
sit back and collect those increasing dividends
year after year at number four we move on to the real estate market
particularly the senior housing sector with a REIT called chartwell retirement
residences ticker symbol CSH.UN.TO
chartwell is definitely the riskiest stock on this list
all the other ones are extremely secure well established and can guarantee their
dividends for years to come but chartwell is on thin ice right now
i'm taking a calculated risk with chartwell because i do see
huge growth potential and i'll explain why. Chartwell is a REIT
a real estate investment trust which is a collection of hundreds of real estate
properties packaged together as a stock and the
rent from these properties go back to investors as dividends or
distributions chartwell is a REIT which only focuses on senior housing in fact
they are the largest player in the senior housing sector in canada
chartwell owns over 200 retirement homes and residential properties
all across the country the great thing about chartwell is its diversification
within this sector chartwell's properties cover every form
of retirement housing from independent living
to assisted living and even more intensive medical facilities like memory
care for patients dealing with dementia and
long-term care for patients dealing with chronic illnesses
with this variety you get multiple streams of revenue for independent
living or assisted living the residents themselves or their families
pay for their own rent whereas the long-term care properties are funded by
the government it's nice to have both income streams
you get the stability of government funding
but you aren't overly reliant on government policies which can change
after an election currently chartwell is paying an enormous dividend yield of
6% paid out every month chartwell has
always paid a generous dividend but now the yield is so high
because the share price has dropped significantly since march at the start
of the crash the share price has dropped by over 30%
whereas the dividend has remained unchanged you can look at this drop as a
red flag which is fair but i prefer to look at it
as a 30% discount which is an opportunity that i am taking advantage of
so let's address the main concerns as you can imagine retirement communities
have been devastated by this pandemic especially since older citizens are far
more susceptible to the virus i don't want to be indelicate but the
fact is occupancy rates are far lower than normal usually chartwell
properties have around 90% occupancy but now they only have about
85 percent unfortunately hundreds of residents have
passed away due to the virus and obviously there aren't any new
seniors looking to move in during a pandemic
the government has announced additional funding to help during this pandemic but
it will only go towards long-term care facilities
clearly the company's revenue has been decimated but on top of that
their expenses have also shot up in this past quarter chartwell had to spend over
eight million dollars in addition to its regular operating expenses
to retrain its staff purchase personal protective equipment
and install barriers and shields across all of its properties
because of this chartwell recently announced a net loss for its second
quarter and so there is no dividend payout ratio
for the stock since the company lost more money than it gained i want to
stress this again this stock is definitely riskier than
the others on this list all the other dividends on this list are
extremely secure with solid payout ratios whereas chartwell
is reporting a net loss clearly its dividend is not guaranteed right now
it is possible that they might reduce this dividend but as of right now
they're still paying that six percent monthly dividend
and even if they do reduce it from six percent it should still be a good source
of passive income up until this crisis chartwell had been
increasing this dividend every single year for the past six years
so we'll see if they're able to continue the streak again this stock is a risk if
you don't feel comfortable investing in it i totally understand
stick to the secure dividends i've talked about in my past videos but i do
see a huge potential for growth since we have an
aging population in canada and with a huge variety of living options
i believe that the stigma against retirement homes is going away
i think that more and more seniors will be selling their homes at peak prices
and using that money to live comfortable and exciting lives
in these retirement communities obviously this pandemic will force the
senior housing market to adjust but chartwell is an industry leader and
they are well positioned to fill this unmet and growing demand
if you're still with me and assuming that chartwells dividend doesn't change
let's see how much you'll need to invest to qualify for a DRIP with a share
price of ten dollars you'll only need two thousand dollars invested to qualify
for a monthly DRIP with two thousand dollars your six
percent dividend will give you a $120 a year in dividends
or $10 a month that's enough to get you a free share of this REIT
every single month that's 12 free shares every year! Looking at the share price
over the past 10 years you can see a nice upward trend at the
beginning of the decade and then a plateau over the past four years
and then in march 2020 the stock plummeted to almost 10-year lows
again this is a risk but if you can handle it i think this is a huge
opportunity for growth and you'll collect that generous
dividend every month along the way for all these stocks make sure you're buying
them on the toronto stock exchange in canadian dollars
some of them 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
and make sure to hold these in your tax sheltered accounts like your TFSA
and your RRSP to avoid paying taxes on these dividends
if you're not sure how to actually buy these stocks click the pop-up at the top
right to check out my Questrade 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 5$0 plus i'll get a small
referral bonus as well so there you have it those are some more
of my favorite canadian dividend stocks to invest in 2020 during this market
crash manulife offers a huge discount a great
dividend and it's very easy to qualify for a DRIP. TC energy offers an
increasing dividend while tapping into the energy sector. Canadian utilities
is the most consistent dividend in canada with a dividend increase
every single year for 48 years straight and chartwell is definitely a risk but
it comes with huge growth potential and an attractive monthly DRIP thanks
for watching guys and be sure to like comment and subscribe if you found this
video helpful every thumbs up and comment really does help me build this
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every thursday and hit the playlist button at the very end to watch my stock
pick recommendations and my canadian tax guide videos and if
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@CanadianTShirt click my link in the box below or click the links on my
homepage be sure to tune in to my next video
where i'll be finishing up my RESP series
and i'll be talking about how to withdraw money to pay for your child's
education thanks everyone and i'll see you guys on
the next episode of the canadian in a t-shirt bye guys