The 3 best Canadian dividend stocks to buy in 2022

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With rising volatility in the market, it may be a good time to shop for some dividend shares. Despite S & P / TSX composite index strong results last year, there is plenty of uncertainty in the stock market today, which has been a significant contributor to the recent volatility.

The pandemic, which does not appear to be slowing down in Canada, has been a wild card for equities since early 2020. Last year’s results proved that growth is still possible, even in the midst of a pandemic, but not without high volatility.

Rising interest rates and inflation are two other question marks for the stock market in 2022. Higher interest rates appear to be helping to curb inflation, which we have already begun to see reach levels.

Heading into another year full of uncertainty, I seek to stabilize my portfolio with a few reliable dividend stocks. The passive income generated from dividends may help offset some of the expected volatility in the market this year.

Here is a list of three pay-as-you-go companies that you can add to your watch list this year.

A high-performing defensive stock

As a market-leading supply stock, Algonquin Power (TSX: AQN)(NYSE: AQN) is a perfect business to own during volatile market periods. Revenue flows tend to be quite predictable for utilities, keeping volatility to a minimum.

At today’s stock price, Algonquin Power is the highest yielding choice on this list. The company’s annual dividend of $ 0.86 per share is approaching a whopping 5% return.

What sets Algonquin Power apart from other supply stocks is its long-term growth potential. The shares are approaching a market increase of 60% over the past five years. Once you have recognized dividends, it is good enough to more than double the return on the Canadian market.

And if you needed another reason to start a position in this top-yield stock, stocks are now trading at an opportunistic value discount. The stock has fallen 20% from record highs set in early 2021.

Investing in a Canadian bank is a wise choice

There are a few good reasons why a Canadian investor wants to own shares in one of the five major Canadian banks.

Growth, passive income and diversification are three reasons for this Toronto-Dominion Bank (TSX: TD)(NYSE: TD) is on my own watch list this year.

The shares of the dividend stock have risen by 50% in the market over the past five years. On top of that growth, the company’s dividend is currently close to 4 per cent.

But what puts TD Bank on my watch list is the bank’s presence in the United States. With an ever-growing footprint south of the border, owning shares in TD Bank provides a portfolio of much-needed diversification from the Canadian economy.

A dividend stock for growth-oriented investors

The last choice on my list has possibly the greatest growth potential among the three companies. Shares of Telus (TSX: T)(NYSE: TU) has only risen 35% over the past five years, but the company definitely has the potential to become a stock beating the market over the next decade.

The company’s growth potential comes from two growing trends: 5G technology and telemedicine. As a major telecommunications provider in the country, Telus will certainly benefit from the expansion of 5G technology.

Telus’ growing presence in the telemedicine field is why I’m so optimistic about the dividend stock over the next decade. The company serves both healthcare professionals and the general public and offers its customers a variety of virtual telehealth support.

The telemedicine field is still largely in its early days, which is why I would suggest picking up shares in Telus sooner rather than later.

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