5 stocks I want to buy in 2022

5 stocks I want to buy in 2022

As I approach 15 years as a DIY investor, a hybrid investor no less, we inch closer to some major financial independence dreams. I’ll link to that update later on, below. 

Our hybrid investing approach has been both very successful and very simple over these 15 years, an approach I believe many investors can easily replicate for great investing results:

  • Approach #1 – we own a number of Canadian dividend paying stocks for income and growth. We own nearly 30 different Canadian stocks within our non-registered account and across our Tax Free Savings Accounts (TFSAs). We own these stocks because we believe buying and holding our DIY bundle of Canadian dividend-paying stocks will, over time, provide some steady monthly income for future wants and needs in retirement.

You can find more details about how I built my own Canadian dividend stock portfolio here.

  • Approach #2 – we’re owning more units of low-cost U.S. Exchange Traded Funds (ETFs) inside our RRSPs over time.While dividend paying stocks are great, we believe this is smart because we’re investing abroad beyond Canada’s borders. In doing so, we’ll add growth and diversification to our portfolio. While we still own some Canadian stocks and some U.S. stocks inside our RRSPs, (names like Procter & Gamble, BlackRock, and Johnson & Johnson to name a few) we’re buying more (and holding more) U.S. ETF units every quarter going-forward.

This way, via approach #2 we can largely set and forget part of our investment approach. 

5 stocks I want to buy in 2022

With a bias to getting paid and being rewarded to be a long-term shareholder, via dividend payments, I find myself gravitating to a few stocks in particular in 2022 to bolster my future dividend income for semi-retirement while remaining tax-efficient. 

With that theme in mind, here are 5 stocks I want to buy more of in 2022, from Canada:

1. Equitable Group (EQB)

Equitable Group (EQB) is a growing Canadian financial services business that operates through the company’s wholly owned subsidiary, Equitable Bank. Equitable Bank provides a range of personal and commercial banking accounts and services, including a range of smart banking solutions for Canadians: fast international money transfers, easy U.S. dollar accounts and more. It operates several business lines, including single-family lending services, commercial lending services, commercial mortgage, and deposit services.

EQB has been growing in recent years and I don’t see the trend stopping. The company has excellent metrics and delivers a tax-friendly dividend yield of under 2% for non-registered accounts, focused on growth. I’ve owned EQB for the last year or so and I was the recipient of the recent two-for-one share split in 2021. 

In Q3 2021, the company saw assets under management (AUM) increase 13% year-over-year while posting major bank deposit growth thanks to a growing customer base: from 88,000 to 237,000. EQB shows off an impressive price-to-earnings (P/E) ratio in the high-single digits, offers a quarterly dividend of $0.185 per share (which is only going to increase in 2022), and sports a modest yield around 1%.

EQB is one of many Canadian banks I own and I have full intention of addiing more to my portoflio in 2022, and in fact, I already bought some early this year. I hope to add more after our TFSA and RRSP accounts are maxed out of contribution room by spring 2022. I see owning EQB as a long-term growth story. I hope I am right!

2. Algonquin Power (AQN)

With little surprise to many dedicated readers, AQN is back as another stock I want to own in 2022 – to pad my holdings in this company beyond the hundreds of Algonquin Power shares I already own. I’ve been a shareholder of this company for more than a decade now and I I see no reason why not to add more.

My thesis on AQN remains simple – for the sake of our planet, we need to go more green far sooner than later. I’m happy to support that push with my wallet. Algonquin Power & Utilities Corp. is a growing renewable energy and regulated utility company with assets across North America. This company both acquires and operates green and clean energy assets including hydroelectric, wind, thermal, and solar power facilities, as well as sustainable utility distribution businesses (water, electricity and natural gas).

Algonquin Power purchased Kentucky Power for a few billion recently and once the deal is complete, this is expected to add to its regulated asset base portfolio by billions of income more: bringing in more than 200,000 paying utility customers. Based on this acquisition and others over time, Algonquin Power management expects adjusted earnings per share to grow by 7-9% per year from 2022 to 2026. That means shareholders like me should see a steady rise in dividend growth of about at least 5% for the coming years. AQN has already raised their dividend payout by 10% per year over the past decade – don’t you know!

I feel anything under $20 per share makes AQN an attractive buy for yield and growth. 

3. TD Bank (TD)

It has been said/written that to weather any market calamity, an investor might consider elements of an all-weather portfolio – one that is designed to do well regardless of changing market conditions. That all-weather concept was developed by Ray Dalio, a billionaire investor and founder of Bridgewater Associates, one of the largest hedge funds in the world.

Well, I don’t have the money to invest (nor throw away!) via a hedge fund (ha!) but I do believe a bank stock like TD Bank (TD) is one that can likely weather most market storms. I’ve been a shareholder in TD since early 2010, coming out of the Great Financial Crisis and TD is another a stock I hope to buy more of in 2022.

TD is one of our biggest banks and one of the best brands around. As interest rates rise in 2022 (maybe, eventually??), banks like TD and EQ Bank should benefit a bit. Last year, the stock prices of EQB and TD surged. Of course, we’ll see what 2022 brings but I intend to buy more of TD if and when I get the chance in my taxable account. I’ll have to decide if I add more EQB or TD since there is likely only so much money to go around!

In the meantime before that purchase, I’ll earn a tidy 4% or so in dividend yield and get paid to wait for another dividend increase likely in the 5-10% range in the coming 11 months. 

4. Summit REIT (SMU.UN)

While many REITs are usually in a portfolio for distributions and yield, I have a slightly different bias in my asset accumulation years: I don’t shy away from growth potential. You’ve seen this above with EQB and Summit REIT is yet another example. Although the current yield is hardly a mouth-watering 2.5%, I like the upside as the pandemic rolls on with some exposure to industrial real estate assets — I own some light industrial properties and warehouses without being a direct landlord.

I started to own SMU.UN in early 2021. I will keep an eye on this one.

That said, I have enough Canadian stocks and REITs.

So, I’m likely to buy more U.S. ETFs (i.e., VTI or QQQ) to continue to diversify my portfolio. There is also more XAW to consider for my TFSA to offset individual stock risk which is where I am leaning.   

Further Reading: Lessons learned in diversification.

Lessons learned in diversification – reducing my Canadian home bias

Besides, aligned to the diversification and all-weather comments I made above, I like REITs as their own asset class per se given when other sectors dip, REITs can sometimes thrive. I already own other REITs in my portfolio like REI.UN and CAR.UN in particular, so owning Summit is a nice industrial complement to those other retail and residental real estate assets. 

Just don’t own too much real estate in your portfolio. I mean, some REITs are all fine and good but I wouldn’t go overweight. The same things that can make you wealthy are the same things that can make you poor, if you’re not careful.

Further Reading: How much real estate should you have in your portfolio?

5. Waste Connections (WCN)

While past performance is never indicative of future results, it’s hard to imagine a world without appropriate waste management. Waste Connections (WCN) is one of the largest waste management companies in North America, operating in dozens of U.S. states and throughout most of Canada, headquartered just north of Toronto. Waste Connections also provides non-hazardous oilfield waste treatment, recovery and disposal services in several basins across the U.S., as well as intermodal services for the movement of cargo and solid waste containers in the Pacific Northwest. 

At last check, the company manages some $14 billion in assets that include its vehicles, dump sites, and waste processing/recycling facilities. In the last 10 years, the stock has grown well over 400% but unfortunately I didn’t own it 10 years ago! (I do now and have done so throughout 2021 that saw my returns in this stock over 30%).

Regardless if the economy is wide-open (let’s hope!) or partially closed, you need waste management services to opeate effectively and efficiently in our modern world. I own this stock for this recession-proof reason. 

In October of 2021, WCN increased their dividend by 12.2%. I anticipate another low-double-digit dividend increase will occur in 2022. If I buy more shares of WCN, like I intend to, I’ll take advantage of that increase even more.

5 stocks I want to buy in 2022 summary

Of course, investing in dividend paying stocks is hardly everything. There are far more ways to invest. Then again, I do enjoy getting paid to be a shareholder from all of these companies and more.

I have a bias to owning companies that have a long, established history of rewarding shareholders and some of these stocks above definitely fit that template. Part of the reason I will continue to invest in dividend paying stocks is higher inflation. When it comes down to it, there are two key ways to make money in the stock market: capital appreciation and dividends. Capital appreciation gets lots of attention, as it should, but this is a good reminder that dividend payments have accounted for ~ 40% of the U.S. stock market’s return since 1930. Full stop, with inflation on the rise, companies that pay a sustainable and growing dividend have the potential to grow their income to keep up with inflation.

On my Dividends page, I highlight some other inflation-fighting stocks I own:

  • Canadian banks (examples: RY, BMO).
  • Canadian insurance companies (example: MFC).
  • Canadian pipeline companies (examples: ENB, TRP).
  • Canadian telecommunications companies (examples: BCE, T).
  • A few major Canadian energy companies (like SU).
  • Canadian utilities (examples: FTS, EMA). 

In the U.S., at the time of this post, I own BlackRock (BLK), Johnson & Johnson (JNJ), Procter & Gamble (PG) and a couple more.  

My thinking?

Basically, I buy companies that people need. People need to bank, so I own banks. People need insurance. Last time I checked people want to heat and cool their home(s) in Canada, so I own those companies too.  As you can see above, people also need waste management and smaller companies need warehousing space to thrive. So, I own those assets as well. 

How might these purchases fit into my overall investment plan?

For the curious, I continue to keep my portfolio aligned to these general rules:

  • For the Canadian portion of my portfolio, I strive to keep <30% in financials including banks. 
  • I prefer to keep <20% of my overall portfolio in energy companies. I’m DRIPping many shares of pipeline stocks like Enbridge (ENB) and TC Energy (TRP) every quarter so I don’t intend to buy any more in 2022 even with energy potentially soaring in 2022. 

You can learn all about DRIPs (Dividend Reinvestment Plans) on this dedicated page here.

  • I target about 10-15% utilities overall, including AQN. I like the “bond-like” income from the regulated assets most utilities own and operate. Other examples include Fortis (FTS) and Emera (EMA).
  • I strive to keep 5-10% communications weighting, so I own stocks like Bell Canada (BCE) and Telus (T).
  • Generally speaking, I try and keep any individual stock to <5% of overall portfolio value. I call that my “5% investing rule”. That said, I’m more than fine if some of my low-cost indexed ETFs like VTI or QQQ eventually exceed that 5% portfolio value as part of capital appreciation. Happy to let those ETFs “run” over the coming years… 

(You can more personal investing rules and FAQs on this page here.)

Owning my blend of individual stocks and low-cost ETFs has been a formidable 1-2 investing punch on my path to semi-retirement. Those days are getting very close thanks to the success of this plan and just plainly, sticking to it. You can do the same. 

You can read more about my financial independence update here and I look forward to providing some updates on that plan in the coming months. 

Financial Independence Update

What stocks do you have on radar for 2022?

What do you make of my picks or choices to add more of these companies to my portfolio? Any sleeper picks you have and want to share with me, or do you just want to keep that to yourself? 🙂

Thanks for reading and I look forward to your comments as always.

Mark

More free content

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Why I invest in low-cost ETFs – along with dozens of articles about ETFs can be found here.

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Here are the benefits of owning a 6-Pack Portfolio. 

These are ETFs and dividend stocks built to last for your portfolio.

Check out the 5 stocks I bought more of in 2021.

My name is Mark Seed and I'm the founder, editor and owner of My Own Advisor. As my own DIY financial advisor, I've surpassed my goal and I'm now investing beyond the 7-figure portfolio to start semi-retirement with. Find out how, what I did, and what you can learn to tailor your own financial independence path. Join the newsletter read by thousands each day - always FREE. Follow me on Twitter @myownadvisor.

45 Responses to "5 stocks I want to buy in 2022"

  1. It’s been quite the busy week and a half for me and my wife. We sold all our FIE and half our GRT.UN, FIE no longer fit into our portfolio and GRT’s yield has decreased considerably with its big run-up so there’s better places to be. This gave us around $150k to “spend”.

    We only added to existing holdings including BCE, CPX, EMA, FTS, ENB, PPL, TRP, NWH.UN, and ZWB. For over a year, I’ve been saying that the pure renewables are a total mess and have serious flaws and were totally over-priced. We sold all our BEP.UN and NPI in late 2020 and early 2021. At the same time, I’ve been saying that the pipelines are a great buy and I still think they are. I also think the utilities “interest rate increase” correction is pretty much done. I also suspected good things for BCE earnings and divy increase so added to it last week (sweet). We’ll add to Telus in the next little while.

    We do hold AQN but it is on our naughty list with its continual increasing of debt and buying a crappy asset in Kentucky Power and all its coal. We also hold BMO, BNS, RY, and TD but decided to just add to ZWB for now instead. We’ll get t them later this year.

    Anyway, quite the week and a half and it shows what my thinking is on what’s a good buys at this point.

    Ciao
    Don

    Reply
    1. You’re a high-roller Don!!

      I’m biased but I like your calls on: BCE, CPX, EMA, FTS, ENB, TRP….I own all of them and DRIP all of them every quarter, a few shares each.

      Wow, sold all BEP.UN? Interesting. I own a bunch but I don’t see huge returns coming for a few years….it’s a growth story for me.

      I would agree: “interest rate increase” correction is over for utilities. I don’t mind AQN at these low prices. The 5-year and 10-year returns are still way ahead of the TSX. There has to be some reversion to the mean.

      I have no doubt you’ll add to your banks 🙂
      Mark

      Reply
      1. Hey Mark

        Good one on the “high roller”. Generally we’re devout buy & hold Cdn dividend income/growth stocks but every now and again it seems like a “major” event comes along. Usually, it’s a take-over that triggers a spending spree. I hate holding cash and don’t believe in trying to time the market, so usually we just go ahead and do our buys in quite a compressed period.

        The last previous big one was our cleaning house of the pure renewables (all of our BEP.UN and NPI). I could see they were way over-valued and looked into potential problems and found a ton with being unreliable, being an expensive way to generate power, not being able to recycle so many key components, etc, etc. I think it was the best investment decision I’ve ever made. 🙂

        Ciao
        Don

        Reply
        1. Very fair on the run-up via renewables but they should come back 🙂

          I hope to go shopping myself in the coming months once cash for our RRSP contributions is available. Saving up now!

          Reply
    2. Hi Don,

      Thank you for sharing your thoughts and portfolio activity.

      I’m learning and hope you don’t mind a question. You said above that “GRT’s yield has decreased considerably with its big run-up so there’s better places to be.” Hypothetically, let’s say GRT’s yield was, 4% at the time of your purchase and is now 2%, Wouldn’t the initial yield of 4% be what your dividend payments are based on and not the 2% in my hypothetical example? I’m trying to understand why you would sell GRT because the current yield is lower than at the time of purchase. Can you please elaborate?

      Reply
      1. Hey JF

        Thanks for the comment and really good question. It’s sort of one of my favourite topics and it seems that people think quite differently on it. What you are talking about is basically “Yield on Cost”. In my opinion, it is a meaningless number (other than maybe to impress people at a cocktail party 🙂

        Here’s my logic and I’ll actually use our GRT example with a different share count. We have an average purchase price of $59.02 and the price is now $98.85. GRT pays a distribution of $3.10 per year. Therefore our YOC is a quite impressive 5.25% but our current yield is only 3.14%, If we have 1000 shares, our current payout would be $3100 and the current value would be $98,850. If we take that money, we could buy 1800 shares of ENB at $54.72. ENB pays out $3.44 per year so the dividend income would be $6192 so we’d be way ahead on the dividend income per year.

        This is why I always argue that YOC is meaningless and it’s only the current yield that matters as that is what replacement dividend value is calculated against.

        Take care
        Don

        Reply
        1. Thank you so much for the quick reply, Don. I understand your thought process now. How often do you compare the current yield on your holdings with the yield at the time of purchase to see whether it would make sense to sell an existing holding and purchase something else? Annually?

          Thanks again and take care.

          Reply
          1. Hey JF

            You’re more than welcome on the explanation.

            It is actually quite rare for us to sell because of the current yield getting too low but we have done it a couple times. Usually it’s when the current yield gets down under 2.5%. The GRT trim at that type of yield was quite unusual for us but I was on a bit of a roll with our selling of FIE and deciding to add to most of our main holdings. I did up a spreadsheet to see how more dividend income we would get and saw it was worthwhile.

            As an aside, we never really compare the current to the initial yield. It is all strictly based upon the current yield and what the buy opportunities are.

            Ciao
            Don

            Reply
    1. Thanks Graham. Nice to hear from you and I hope 2022 is treating you well. I’ve own TD for > 10 years and AQN for about the same. We’ll see if WCN and EQB take off over the next decade like I think they might 🙂 Ha.

      Best wishes,
      Mark

      Reply
  2. I have lots of AQN but kind of wondering whether or not holding them now. I don’t like AQN continues to dilute the shares. I might reduce my holding if the price went up. Right now my shares in taxable account are all under water.

    EQB sounds interesting, but as I am already overweighted on finance, I might want to seek growth somewhere else. Already own quite a bit TD so will not add more. Interested to add more NA but right now it’s very expensive.

    Will take a look at SUMMIT. Good diversification I guess.

    Always wanted to buy WCN but it’s always so expensive. Maybe WCN will not be cheap no matter what and I should just buy it with my eyes closed.

    Feel I have enough dividend growth stocks for now. So this year want to expand my investment horizon. My list including msft, google and amazon. They are top three for cloud computation. I see cloud computation continue to grow and it’s not easy to compete with these giants. Also want to add some healthcare stocks but not decided which one.

    Reply
    1. AQN has $16B in assets….so, they are not going anywhere. They’ve acquired a lot, hence the price is down now. Happy to own a 4%-bond like stock for now.

      The P/E on EQB is 9 which is very good.

      Summit is just a hunch on REIT industrial growth – I could be wrong or right!

      May, you have a great list of stocks that I don’t own such as MSFT, Google, Amazon, etc. I own them all via VTI and QQQ so I just focus mostly on CDN stocks for my income. Good or bad! Ha.

      Mark

      Reply
      1. VTI and QQQ are great. I actually want to begin to just buy index to simplify my investment but right now I think lots of stock in QQQ is still overvalued and reluctant to own them even indirectly. MSFT, google, amzn are relatively reasonably priced right now. I already own some msft, but not google and amzn.

        I sometimes have second thoughts with my holdings. That happens to AQN. I also have some MFC as it looks like undervalued comparing to SLF and IFC. But MFC was the worst performed among these three while MFC is the biggest holding among these three in my account. It’s always difficult for me to shuffle the portfolio, so I sold covered call on half of my MFC position recently at strike price 26.5. Maybe it will be called away and I am OK with it. If not called away might continue to sell covered calls. I know I said I won’t do it any more, LOL. This time in my taxable account as the commission is very low at IB. It’s a way for me to avoid directly selling stocks.

        Reply
        1. Yeah, VTI and some QQQ for my tech kicker are great. Then again, what is VTI, some 20%+ tech?

          Set and forget part of my portfolio for sure….

          Same, I do too, we all do I think. I own AQN, MFC, SLF in my portfolio and have done so for about a decade. I figure I’ll simply live off the dividends they deliver. Bond-like and boring I know 🙂

          Reply
  3. I added to AQN with my TFSA money this year and I have some TD as well. I like your idea of percentages to not let any sector run away on you. I’ve decided to keep my REITs under 10% total, and I have three of them, so it’s easy to keep track of. Another point that I’ve slowly learned is to avoid the hot segments and watch for the beat up ones. A couple of years ago, when the world was done with oil (sic), I bought SU and CNQ. That has paid off well for me. This year oil is hot and renewables are getting killed. Like you said, there is lots of growth ahead for that sector, so I also bought more of BEP while it’s at a really good price and am keeping my eye on RNW as well, to add to my position.

    Reply
  4. Hi Mark,

    These are all great picks and we own four of them except SMU.UN. Probably not adding any more REIT as we already have about 10% in each of our TFSA portfolio. Probably will be adding WCN and AQN after letting go of NPI.

    Reply
    1. That makes sense, don’t go over your asset allocation in REITs or other. Stick with your guns and convinctions! Keep up the good work on your progress.

      Reply
  5. Hi Mark. Thanks for sharing your picks for for 2022. Morningstar just published its picks and two are the same as yours, TD and WCN. It also recommends both railroads and RBC. The Dividend Guy reported that he just added to his shares in National Bank. I am able to invest in some stocks right now and am considering CP as my first choice so I can enter the rail market. I am also looking to add to my shares in banks and am thinking more along the lines of National. EQB sounds interesting but I think it would be more of a choice after I boost my shares in the major banks. Sometimes I am undecided as to add to current shares or continue to diversify into more sectors. I like your approach of looking at the percentage owned in each sector.

    Thanks for sharing your thoughts and and your progress.
    Clyde

    Reply
    1. Thanks Clyde! I didn’t know about that Morningstar article. 🙂

      My buddy Mike from The Dividend Guy loves NA bank. I like TD, RY more than NA but NA is good. CNR and CP are both good stocks. I own CNR and will consider CP going forward.

      I use that 5% rule since I figure it’s simply a good diversification method to avoid being overly exposed in any stock or sector. Happy to let VTI and QQQ and other ETFs run up to 10-15% over time. Admittedly EQB is a bit of speculation and a growth play. We’ll see long-term if I am right!

      All my best,
      Mark

      Reply
  6. In retirement (early 70’s) and I sometimes think to myself as to whether I’m doing the right thing by purchasing low yielding dividend growth equities along with the higher yielding one’s (just to diversify into other Canadian sectors).

    I note that some of the dividend growth investors from the past like Josh Peters, Lowell Miller, Daniel Peris and Dale Ennis wouldn’t even look at a stock with a dividend yield of less than 3%. 3% to 6% dividend yield seems to be their sweet spot.

    Not that I’m desperate for the cash for living expenses by any means, but the more cash I have the more I can invest into other higher yielding dividend growth stocks…and then the compounding towards a supplemental income really takes off.

    Reply
    1. I hear ya. Late-40s now, and wondering how much I push for 3-5% yield vs. growth. I figure a blend of both is good = need yield/income and growth as I age.

      Compounding is great: money that makes money, can make more money 🙂
      Mark

      Reply
    2. I think it depends where you are in the investing cycle. Accumulation years probably want more growth, but when retired more income. We still have some low or non divided paying investments that can be changed to dividend payers if needed. But for now don’t need them. As for favorite banks, the one with the most gain is CM. It is the largest percentage holding, but I don’t rebalance just because you should. When you hold good companies you hold (or I do anyway). Good to read all this input, thanks.

      Reply
      1. That’s fair. I know for the foreseeable future I want a blend of growth and income. Maybe in my 50s and 60s I’ll want just income but I doubt it 🙂

        For the record, I own all big-6 banks, big-3 lifecos and now some small EBQ. I of course own many other dividend paying stocks as well.

        I assume you’re still largely “living off dividends”?
        Mark

        Reply
  7. Hi Mark,
    Buying/bought AQN, FTS and BCE but note I’m no longer accumulating (32 days into retirement) so long term growth is not the #1 priority, income + income growth is.

    Your picks are great companies (no US picks?) but most are a bit expensive IMO. EQB is a no I have too much in financials as it is. WCN seems to be eternally pricey, no idea why fundamentals do not support a PE of 56 but guess that’s how it is. I shy away from low yielding “fast” div growers because that growth likely doesn’t last and even +15% of next to nothing is still not a lot. Then again cash does not make money either so if you have the capital and time then they could make a great investment. TD is great and pricey after the recent run up but then again most stocks are. 10 years from now would you really care if you paid a buck or two too much?

    SMU is interesting and in the right market real estate wise. It’s also a low yield/slow grower vs i.e. high yield/slow grower FCD which I bought as well this month prior it’s upcoming upgrade to the TSX. Might look to swap in some SMU as I have some leftover HR garbage.

    Cheers,
    Ben

    Reply
    1. You know Ben, I thought about more U.S. assets but I’m OK to buy some QQQ if it dips more. I figure that and VTI are easy ways to play the U.S. market – no guesswork.

      Yes, WCN is/seems expensive but I still feel it could excel this year. If not, it will, eventually. I mean, it returned 130%+ in the last 5-years. I don’t think that will repeat but you never know….

      “10 years from now would you really care if you paid a buck or two too much?”

      I think you probably know my answer!
      Happy investing and let me know what you buy.
      Mark

      Reply
  8. Great picks, Mark. I am sure your picks will multiply many folds over the years.
    For me, I would like to buy the followings:
    -Google, Microsoft, Facebook, CNQ and Amazon. Although I have them in my ETF’s, owning them individually would be great!!
    Good luck with your other picks.

    Reply
    1. Those tech picks are likely smart for years to come. I own them via VTI and QQQ myself since I feel so much can change in tech – but are these “too big to fail” now? 🙂

      Will report back later this year what I bought, when and why!
      Mark

      Reply
  9. Hey Mark,

    Nice picks here. I am going to have to do more research on WCN, as I can’t say I’m overly familiar. I’ve been in WM since 2011 and that has been one of my best performers. As you said, the trash needs to keep moving no matter what happens in the economy. Glad to be a part of that business.

    Take care,
    Ryan

    Reply
    1. Yes, WM in the U.S. is a good company too. I have considered buying that one as well. The garbage business will be important going foward I believe.

      All the best Ryan and chat again soon.
      Mark

      Reply
  10. Mark, with you on AQN and TD, picked up both recently with the market weakness. Anytime a bank is trading at a P/E of 10-11 times, its a buy. Hoping for another pull back.

    WCN, dividend increases has been good recently, but does it deserve a P/E of 56 ? With such a low yield, 0.74%, there are other companies that follow the 10/10 rule with better yields. And yes, garbage collection is helpful in today’s world (think a few cities, looking at you T.O. that have suffered under waste disposal problems/strikes in recent memory) Can changes in regulations derail company profits, much to consider.

    My preference is anything yielding greater than 1.5%, min. market cap of $5B, and double digit dividend growth. That said there are companies under 1% that have 20 – 30% growth for many years running. If you don’t need the income now, the math can work out.

    David

    Reply
    1. Yeah, I like AQN and TD and have liked them for many years – owned them for 10+ years now.
      EQB is a relatively new holding for growth vs. yield.
      WCN, maybe you are right, P/E is high right but it was only high in 2021 and it has done well over the last 10 years…so I expect (rightly or wrongly) more gains for the next 10 years.

      I don’t need the income for a few years, just a few 🙂
      Mark

      Reply
      1. Mark, value investing is a challenge, and it would seem (?) the game has changed. Is a P/E of 56 a normal multiple in the waste management industry, is it excessive (?) What are the head winds for the industry, certainly not going away by any stretch. Many metrics to look at, return on capital, eps growth etc.

        Might be an interesting article to write up, beyond P/E, dividend yield and growth. What does a person look at, and how has this changed from 50 years ago. Can what was applied in the past work in today’s market, or …

        David

        Reply
          1. Good question Mark, what does one make of it, each case is different. Viewed over time changes in overall market P/E what does that tell us. Back when I finished school first company that hired me (was the 12th employee) went on to be listed on the TSX, grew to approx 200, and now is no longer with us. This all leading up to the dot com bubble. Left before it all blew up, still made my first 100K with them on employee stock options, got a new vehicle out of it, otherwise the money vanished. Lesson learned. Know a few that had ‘millions’ on paper with stocks in that time, only to see it all go.

            This story has played out before. The human element remains the same, do the changes to our monetary system change how we should measure things. The questions are asked out of genuine interest. Since I last mentioned in the fall concerns regarding MMT, QE etc, our dividend income has grown by multiple 1000s per month. The numbers are starting to line up a bit better with the recent pull back, does that mean its over, or is there more downside(?)

            David

            Reply
            1. “This story has played out before.”

              For sure David, but worse I think now? I think we need another 10% correction or so in 2022 to get back to normal per se. It’s been a wild ride up for the last 10 years and I don’t think any QE and low rates are helping – things are out of whack and most investors know that or should 🙂

              I appreciate your insightful comments!
              Mark

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