Three reasons strategists say Canadian stocks look attractive in 2022

It’s been an epic rally for Canadian equities in 2021 with the S&P/TSX Composite Index reaching record highs, so what does 2022 hold?

It’s been an epic rally for Canadian equities in 2021 with the S&P/TSX Composite Index reaching record highs, so what does 2022 hold? 

Here are three reasons why some strategists still think Canadian stocks look attractive heading into the new year. 

2021 was a year filled with earnings surprises to the upside, and although this may not be as sustainable heading in 2022, BMO Capital Markets Chief Investment Strategist Brian Belski says these broad-based earnings gains are usually followed by a surge in dividend growth. 

“This, according to our work, is likely to generate an impressive, if not ambitious dividend growth cycle that could see overall dividend growth surge well above historical averages over the next 12-24 months,” he wrote in his 2022 market outlook report published in November. 

“As such, we believe investors should begin positioning in areas that are likely to increase dividends and share buybacks, which is likely to be a key theme as we head into 2022 and beyond.”