Q: In need of income over growth as security would be held in a RRIF.
Would FTN be a good income candidate?
Thnx for the great service!!
Would FTN be a good income candidate?
Thnx for the great service!!
5i Research Answer:
FTN is a split share company, and as such offers a high income but should not be considered conservative. If net asset value declines a certain amount, dividends stop completely. FTN stopped dividends for a period of time in 2019, 2018, 2011, 2009 and 2008. That being said, its past performance is stellar (5 year annualized 32.50%). It owns 15 financial stocks. We generally are cautious on split shares because of their leveraged structure. We think it is OK for income but it has to be considered higher risk, even with its quality holdings, and investors need to understand the structure.