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  5. LIF: Am retired so my cash portfolio is full of banks, utilities, Brookfield cos, etc. [Labrador Iron Ore Royalty Corporation]
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Investment Q&A

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Q: Am retired so my cash portfolio is full of banks, utilities, Brookfield cos, etc.. No materials , so looking at dipping my toe into this sector with either LIF or WTE. Re LIF : the metrics for iron ore are good ,China slowdown negative, US infrastructure program positive ?
Re WTE : Jimmy Patterson a strong shareholder , well run operator, moving more potash, less coal through its terminal ?
What is your opinion on these two companies ?
Balance sheet strength ? Would you recommend one over the other , both or neither for my purpose ? Thanks. Derek
Asked by Derek on March 15, 2024
5i Research Answer:

LIF is always going to be cyclical but is priced accordingly (8X earnings, 6.3% yield). It has no debt. While the dividend will vary, we think patient investors can own it, collect the dividend, and await a sector recovery. Not risk free, but priced well. WTE is much more expensive, with a lower yield, but might have more growth potential as it adds new products to its system. Very little growth is expected in the medium term, however. It has some debt but hardly a problematic amount. Pattison owns 46%, but he is 95, and, no offense, should probably be discounted as an infuencer here. For an investor looking for higher yield to balance off more conservative stocks, we would be comfortable owning both of these in small amounts rather than one.