Investment Q&A

Q: I am pretty sure you have answered this before but I could not find anything with the search option, so here goes.

Brookfield companies have a complex structure and I was wondering in which category exactly their distributions fall with regards to taxation. For example I read that sometimes distributions from shares of BIP held in a TFSA were subject to the 15% witholding tax, while some other times they were not.

Could you please clarify the situation and also state your prefered account in which to hold BEP, BIP and BAM? I have them on my radar, so I want to make sure I maximize returns when the time comes to own them.

Thank you very much as always.

Q: I have a loss on Power Corporation.
I intend to sell the stock to take the capital loss.
Can you recommend a replacement?
Of course I like dividend and growth! But I could live with a smaller dividend and some growth,
65 an retired.
Thanks!

Q: I was a bit surprised to see SPB in your answer to a question about your top 5 utility companies to buy today. Why are you so positive about this company?

Q: Greetings,
Given that we should be "running towards quality" during a downturn , I cannot help but to be tempted by EXE for having more of a short term upside that CSH or SIA.

As long as the dividend is safe, would you agree with me EXE could be viewed as a contrarian purchase?
Cheers

Q: At current price levels ITP at $14.80 and UNS at $19.38 would you buy more to average down, currently both are at a loss, hold or sell. Not required for tax loss. Please give reason for answer. Are dividends safe?

John

Q: Recently, I asked about adding to ECN.PR.C at $21 and you replied it was fine to hold but not to add (thanks). Now it's $17 and paying 9%. It is a rate reset preferred and I thought the guaranteed floor was 6.25% upon reset but you recently said otherwise in another reply.
Should I buy it now and what is the reset minimum?
Thanks.

Q: Morning,
Thought has it that the Fed will raise interest rates tomorrow and then in a more dovish manner restrict the number of rates hikes next year ... possibly to 1. How would you think TLT would react under this scenario?
Thanks,
Dave

Q: Hello 5i - If we have fewer interest rate hikes going forward, or as some expect, 2019 may bring a recession, what could be the effect on bond fund ETFs such as ZAG, VAB or HAB for example? If investors have reduced equity exposure (to reduce risk) and increased "bond investments", are they in for an unpleasant surprise? Thanks, Ron

Q: Hello Team,
Could you please analyse this company for me? What is the payout ratio, safety of dividend, quality of company etc.
Kind Regards,
Barry

Q: Can I get your three top Canadian dividend picks, with regard to dividend safety, dividend growth and value. I am looking to add these names to my TFSA in Jan.

Q: Hi Guys.
You like ENB, what is your opinion on ET. I have a fairly
diversify portfolios including ENB . Im looking for USA
income, but have never dealt LP before, should a OLD
MAN you think stay away [ probably hold for 3 years]

Q: Looking to add to my RRSP account - your opinion please, AQN or BEP.UN. I was going to add AQN but they just issued 12.5 million shares at $13.76 which is below current market value. Should this sway me towards BEP.UN ?

Q: I have a question about the conv debs in this co. their price has taken
a severe hit- trading below 80. Is this a sign of serious trouble or just
a lack of buyers while the stock is down? would you consider them
a buy here for aggressive investors

Q: Hello, according to the company profile of TCL.A, the price-to-cash-flow ratio (P/CF) is 4.70. When one looks at the P/CF ratio of any company, above what ratio would you say that this is a good P/CF? In your opinion, what would be the top 5 utilities company right now? Thanks, Gervais

Q: Hello
Is ALA.PR.U in danger of a dividend cut? Do preferreds cut ?
I like the dividend tax credit on such a high USD yielding pref.
Any comments or warnings are welcome..
Thanks

Q: Regarding EFN.PR.C - assuming interest rates stay the same would you expect, all things being equal, that the price will go up or down on the re-set in March 2019?
Thanks

Q: Hello -
There are two recent articles on Seeking Alpha regarding each of BEP.UN and BPY.UN by the same respected contributor.

Although I wouldn't expect you to necessarily read the whole articles, do you generally agree with their bullet points?

Three other points within the articles that jump out at me for both are:
- long runway / future growth - BEP.UN (good),
- good current valuation - BPY.UN (good)
- large amount of debt - Both (not so good).

He states however that much of the debt for both is non-recourse which he claims is less concerning. Would you agree with that statement -especially if we were to run into some sort of global debt crisis?

https://seekingalpha.com/article/4228344-brookfield-renewable-partners-king-global-green-energy?ifp=0

https://seekingalpha.com/article/4227404-brookfield-property-partners-berkshire-real-estate?ifp=0

Thanks.

Q: I have a question about 1213 ..

With the dividend yield now over 8%, is this a danger signal for ZCL?
I know it has been on and off your favourites list and you had indicated a couple of months ago that you are not expecting a big turnaround.

But the yield is tempting....

What is ZCL's free cash flow and payout %.?
Is the balance sheet in good shape by your standards.?

I can be patient with a stock offering an 8% yield .... as long as it is not likely to be another ALA.

Thanks for your help.

Q: Hi 5i, Greetings . I am holding CPD etf and some BIP.Pr.D and BEP.Pr.K as part of fixed income allocation. I always considered these to be held forever, but times seem to be changing and interest rate outlook is uncertain., Should these be held and wait it out or bail now and assess later? Thanks for the service. Ted

Q: Hi 5i Team

I'm primarily an income oriented investor. I'm uncertain about where interest rates will go over the next year. I think we're close to a plateau but who knows. I don't currently own any fixed rate preferreds but am thinking of buying some (maybe up to 10% made up of 5 holdings with different reset dates). I like the dividends and see them as a kind of interest rate hedge against the dividend paying commons. My thinking is that, all else being equal, resets are supposed to increase in price with rising interest rates while dividend payers tend to decline (subject to their ability to increase their dividend).

I understand that other company/market influences may move both preferreds and common in the same direction, I'm just thinking of the interest rate issue at this point. Your thoughts?

Thanks, as always
Peter