I Asked 3,468 People on Twitter For Their Best TFSA Ideas for 2022. Here's What They Said

Amid all the terrible jokes and half-baked stock ideas I do on the ol’ Twitter.com, every now and again I do something valuable. We’ll get to that in a second. But first, my best ever tweet.

Are you ready, kids?

That was almost NINE years ago. I’ve wasted my life ever since.

Also only two retweets is a crime worse than anything Hitler ever did.

Amid some of the jokes is some actual serious content, since I do mostly go on Twitter for the idea exchange. I’ve met dozens of other investors off Twitter, and I haven’t had a single bad experience. I’ve likely interacted with thousands of people on the platform itself over the past decade, and 95% of those experiences were positive. I used to tolerate negative people on there a lot more than I do today. Now I make good use of the mute/block button.

Since Twitter is mostly about idea exchange, every now and again I’ll ask people what they think about stocks/books/whatever. And usually the response is much better than I deserve. This is exactly what happened when I asked my followers what I should do with my TFSA contribution. I got tons of good ideas.

I’m going to share some, as well as a quick opinion on each company. Let’s get to it.

Equitable Bank

Equitable Bank of Canada (TSX:EQB) was a popular choice. Probably a full half dozen people had it as a top pick for 2022. It’s easy to see why - EQB is growing faster than its most established peers, trades at a puny valuation (just 8.5x trailing earnings and about 7x 2022’s projected earnings), and sports a 17% ROE, which also puts it atop all its peers.

With just a 1% dividend yield (which works out to about a 10% payout ratio) EQB is poised to grow the dividend by 20%+ per year for a decade or more.

It’s easy to see why most folks are bullish, and I’ll likely buy more at some point over the next few months.

Corus

I bought Corus (TSX:CJR.B) back in 2013 and I’m sitting on a 50%+ loss. I thought about selling but I just can’t punt a stock that trades at 4x FCF (yes, really) and that is executing on its debt payoff strategy. Investors are worried the company — which owns cable TV channels in Canada — is a melting ice cube, but revenue was actually up 2% in 2021. And its recently launched streaming service already has 725,000 subscribers.

Debt has been a problem ever since the company borrowed aggressively to buy out Shaw’s cable assets. The balance sheet is in better shape today, leaving the company with a little more flexibility going forward. It’s using some of its newly discovered liquidity to buy back stock.

If you’re into the deep value stuff, Corus is definitely worth a second look.

Couche-Tard

I’m a big fan of Alain Bedard and the management team over at Alimentation Couche-Tard (TSX:ATD.B). They grew a single convenience store in Quebec into a worldwide empire through dozens of different acquisitions. It’s a great company that trades at about 16x 2022’s expected earnings — which is a very reasonable valuation.

My day job is in the retail industry, so I know the struggles of the sector intimately. I’d much rather wait until a stock like ATD is ridiculously cheap before buying. Couche-Tard dipped below $40 when news leaked of an ill-fated partnership with French supermarket giant Carrefour, which turned out to be a great entry point I missed. I’ll be paying attention the next time such a move happens. But for now, I’m comfortably on the sidelines.

Manulife

Manulife (TSX:MFC) is a cheap life insurance company that was cheap last year… and the year before. It never really breaks out of the slump. The good news is it should benefit as interest rates go higher. The stock yields more than 5% after the big dividend hike in November and it sports a payout ratio well under 50% of earnings.

Manulife is one of those stocks you add to your portfolio and hopefully over the next decade or so management can turn it from the dud of the sector into something much more respectable. If that happens, you’ll compound your money at a 12-15% clip. However, there is certainly a non-zero chance management continues to underperform and you’re looking at an 8-10% return.

Canadian Apartment Properties REIT

Canadian Apartment Properties REIT (TSX:CAR.UN) or CAPREIT for short, owns apartments all across Canada (but mostly in the Toronto area), and also in Ireland and the Netherlands. Shares have struggled for the last little while as investors get nervous about higher interest rates.

If you’re looking to buy cheap Toronto apartments, Morguard North American Residential REIT (TSX:MRG.un) is the way to go. Tyler wrote about it, so I won’t rehash it. Just go read that.

New Flyer

Bus manufacturer New Flyer (TSX:NFI) came up a few times as well. It seems expensive on the surface (the P/E ratio is something like 350x) and earns about 3% operating margins. I’ve never been a fan of building cars, either. And it issues a lot of stock.

I must be missing something if multiple people like this stock and I don’t, but I just don’t get it.

Intertape Polymer

Intertape Polymer (TSX:ITP) makes things like packing tape, house wrap, shingle wraps, packaging supplies, and so forth. It has enjoyed two big trends buoying the business over the last decade as both housing and e-commerce have done exceptionally well.

What I like about the stock is it just quietly grows between 7-10% per year with big acquisitions sometimes juicing those numbers. It’s currently digesting one of those deals, but once it does the company should be able to grow annual earnings to comfortably above the $2 per share range. Shares are reasonably valued today at $25 each.

Fun fact: I bought this stock at just over $2 back in 2007 as the housing market was imploding. Held all the way down to penny stock status and ended up selling most of the position in the $11 range. In hindsight I probably should have held on.

Goeasy

For those of you unaware of Goeasy (TSX:GSY), it’s essentially replaced the payday loan business in Canada. As governments heavily regulated the short-term loan industry, Goeasy swooped in and offered a competing product that weighs in at about a 50% interest rate. Growth has been strong since most borrowers don’t have any other choice.

There’s always the risk Goeasy gets legislated out of business. You could also argue that risk is well priced in — shares trade at about 10x trailing earnings with the bottom line expected to grow by about 15% in 2022. The dividend yield is close to 2% after a big 25% sell-off in the name.

I own this in a family member’s TFSA and I’m happy I cashed out some of the position in the $200 range. It’s a volatile stock.

Mullen

Mullen Corp (TSX:MTL) is a trucking company with an oilfield services division it acquired at precisely the wrong time in 2014. With seemingly every investor bullish on energy (this one included), suddenly that albatross is looking a whole lot better.

Mullen just raised its annual dividend to $0.60 per share — or a 5% plus yield — and told investors it plans to earn $100M in FCF in 2022. The market cap today is approximately $1.1B.

The company also owns a whole bunch of its warehouse space, an asset likely undervalued because its hidden on the balance sheet. Mullen values the real estate at more than $600M. I’m not exactly sure what the catalyst is for unlocking that value, but good things tend to happen when you buy undervalued assets.

Exchange Income

This one is interesting. Exchange Income Corp (TSX:EIF) owns a collection of different manufacturing businesses and airline service businesses. It trades at 12x analysts’ expectations of FCF this year and it should see a boost as the airline business recovers. I don’t have much more to say about this one besides I’m going to research further.

Transcontinental 

You might remember Transcontinental (TSX:TCL.A) as a newspaper provider. It has transformed itself over the last few years, moving bigly into processed food packaging. It gushes FCF and trades at a cheap valuation. It’ll easily earn $300M in FCF in 2022 (more likely closer to $400M) and has a market cap of just $1.8B.

The dividend has been raised consistently throughout its history of a publicly traded company with the yield currently at 4.4%. The payout ratio is well under 50% of cash flow, giving the company plenty of excess cash to use for paying down debt or for new potential acquisitions.

I owned this in the past and sold it after one too many disappointing earnings. I’ll revisit that decision soon.

Algonquin

After years of steady returns and being one of the darlings in the sector (with a valuation to match), Algonquin Power & Utilities Corp (TSX:AQN) has come back to earth. Shares are down more than 20% over the last year. It’s cheap on a P/E basis and its Kentucky acquisition should boost the bottom line. I’ll do a much deeper dive on AQN in the near future, but the short version is I like it today. It’s probably my favourite pick in the sector.

Enbridge

Enbridge (TSX:ENB) is simple. If you’re bullish on energy, you should be bullish on the pipelines that transport the stuff. I’d be buying more today if it wasn’t already a top three position. Wouldn’t mind a little more dividend growth though.

Telus

Big fan of Telus (TSX:T) and own a bunch of it. I really like how they’ve diversified away from telecom with more interesting assets than BCE or Rogers did. But it’s also fully valued today and I don’t think there’s much near-term upside. Happy to hold but not buying more.

Molson Coors

Molson Coors (TSX:TAP) is a little like Transcontinental a couple of years ago. It gushed FCF but nobody really cared because the top line struggled. It took a big write-down, cut the dividend, and has really struggled as bars remain either closed or under-utilized. Bears seem to think beer is a slowly dying business. I prefer Corby Spirits and Wine today.

Just buy RBC

That’s a direct quote from one of the replies, and probably isn’t such a bad idea.

I’m not sure which one of the Canadian banks is my favourite today. I’m a big fan of all six of the largest, and have a position in all of them. And we talked about Equitable above, which I also own (although it’s a smaller position than the other banks in my portfolio).

I used to be the most bullish on CIBC and Scotiabank based on a valuation basis alone. Buy cheap stocks, I like to say, and let the rest sort itself out eventually. Both delivered excellent returns in 2021, and both outpaced the sector as a whole. The two higher quality names — TD and RBC — underperformed. Thus, I’d likely buy them if I were buying bank stocks in 2022.

But I’m not, so it’s all a moot point. Nothing against the banks, but I already own a whole bunch.

Viacom

I don’t know much about Viacom (NASDAQ:VIAC) but I do know it’s a favourite of Fintwit. Might do more research, might not.

Let’s end this

I think this one might have went on a little too long. Sorry guys.

Let me sum it all up for you:

Stocks I’m interested in: EQB, AQN, EIF, TCL, MRG.un, MTL, ITP

Stocks I’m neutral about: Banks, T, ENB, VIAC, GSY, MFC, ATD.B, CJR.B

Stocks I wouldn’t touch: NFI, TPX.B, CAR.UN