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Life & Banc Split Corp. Class A Shares (LBS $10.85)
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Brompton Split Banc Corp. Class A Shares (SBC $11.85)
Q: I am primarily a income investor with in a RRIF account. I would like your opinion on these 2 securities - both are promoted in adds during BNN programs
Thank you
SG
Thank you
SG
5i Research Answer:
We are not huge fans of split corps. WE generally prefer to keep it simple and just own the underlying equities in stead (i.e. a few banks and/or insurers). For an investor with a very specific need for outsized income, they can make sense but typically we would just prefer to own the underlying companies themselves. Still, SBC does have a good record on dividends, and its 5-year return is 26.63%. It is one of the better split-share corps. LBS is 34.03% but note it has omitted its dividend in the past. Both use leverage (via the preferred shares) and dividends get suspended if NAV falls below a certain level.