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Investment Q&A

Not investment advice or solicitation to buy/sell securities. Do your own due diligence and/or consult an advisor.

Q: I have a question about CGI, which I've held since 2013, so I've done very well with them, but they don't have a dividend policy, so I'm feeling that the capital gain that I have is being lazy and not working for me without any divvy income to offset. If I was going to sell half, what would you suggest would be a good 3 to 5 year replacement to consider? I tend to favour medium to large caps, and mostly dividend payers. I also have Open Text and Syzlogist as other tech holdings, in a fairly diversified portfolio that includes international and US etf's. I currently do not have any resource/energy (I was thinking Vermillion) or consumer (I was thinking Loblaws or Metro, Dollarama looks expensive still)holdings.

thank you,
Read Answer Asked by g on August 02, 2018
Q: Hello 5i,
Sorry for another ECI/BIP question, but the questions to date that I have seen haven't addressed my question.
Given the dividend that ECI currently pays out of cash flow, and that BIP will ultimately receive that cash flow, and the nature of the funding, might it be reasonable to expect that BIP would increase their dividend in one of the first two quarters of 2019? Or, would their acquisition make debt re-payment a priority do you think?
Obviously, I know you cannot read the minds of BIP's Board and Executive team, but given their financial ratios, I though you might have some insight.
Thanks!!
Cheers,
Mike
Read Answer Asked by Mike on August 01, 2018
Q: Hi 5i,
Just a comment in relation to BIP.UN’s buy-out of ECI. I have held both of the securities for a number of years. ECI shareholders who have not previously held BIP.UN should take a careful look at it to determine if it is appropriate for their needs. ECI pays a fully eligible Canadian dividend on a monthly basis at a higher yield, relative to the recent past price range of ECI. It may be that the takeover premium makes BIP’s yield higher but only by dramatically lowering ECI’s. In contrast, BIP pays a quarterly distribution that is not an eligible dividend, is broken into three categories for tax purposes, and is paid in $US. Depending on one’s brokerage account set-up, some people may find that they are paying a currency transaction fee on each BIP distribution. It is important to be sure that BIP is really the kind of vehicle one wants to own. I hold BIP in an RSP account and it works well for me in that context but I would probably not want to have it in another kind of account. In regard to tendering to the cash and shares offer, people may want to consider how many BIP shares they would expect to end up with. If one’s ECI holding is relatively modest in the first place and one is likely to receive only 25% or less of the value in shares, a person could end up with a BIP holding that 5i would advise selling as “too small to have a meaningful impact on the portfolio.” If that is the case, it may be better to go for all cash (or sell it all at once in the meantime) and avoid paying a transaction fee later on an unnecessary tag end.
Cheers!
Read Answer Asked by Lance on August 01, 2018
Q: you have had multiple questions on this stock, i own 10,000 shares, for me a small position and the stock keeps getting creamed, divvy near15% monthly, all my 30 years of investing experience tells me something is wrong, but 5i says nothings wrong, even has it in its portfolio, the company says nothings wrong, but the markets saying everythings wrong. please comment. dave
Read Answer Asked by david on August 01, 2018
Q: Hi Peter,

Currently own CHE.UN - have been following your comments/answers & appreciate your answer to my previous question re: 4.6% drop on Aug 8

Your comments "stock not cheap" (P/E is 15 = not bad?), dividend not increased in 10 yrs (but currently 8% = pretty good & sustainable), downgraded by Desjardins from $19 > $17 (but currently trading at $14.7 = undervalued?) with 3 yr price range between $15-$20

That said, what is your outlook for CHE.UN and would you consider a BUY (more for income vs. growth perhaps?) - if not, why?

BTW - have made money on most of your insights - THANK YOU
Read Answer Asked by Todd on August 01, 2018
Q: I am a fan of renewable energy and have positions in the following - NPI - 4%, BEP.UN - 3% and INE - 3%. I would like to add to either BEP or INE to bring one of them up to 4%.
What would your preference be for a long term holding considering dividend safety and dividend growth as well as capital appreciation over the long term - 5 years +?
When I look at BEP on Morningstar I see a long term debt / equity ratio of 2.3. INE shows the same ratio at 7. Revenue growth at INE seems better. Is INE's debt level a concern?
Thank you
Read Answer Asked by Robert on July 31, 2018
Q: I would like to purchase some dividend paying stocks for a non-registered account. What would be your top five recommendations for dividend paying stocks (minimum 3.5 % payout) that are also likely to have some capital appreciation over the next 3 years. Please do not include pipeline or financial stocks as I all ready have these two areas well covered. Also, are your recommendations good buys at this time.

Thanks
Read Answer Asked by Glen on July 31, 2018
Q: FOR CASH PART OF PORTOFOLIO YOU SUGGEST BONDS AND SOME MMF OR GIC
IN MY PORTOFOLIO I HAVE :
CDP-5 YEARS RETURN - 13.19% ( MINUS )
VAB 5 YEARS RETURN +1.35 % (PLUS )
TD MMF (165 ) 5 YEAR RETURN 3.54% (PLUS )
THESE ARE FIGURES FRON GLOBE AND MAIL 5 YEAR RETURN.
IT SEEMS MONEY MARKET FUND HAS BETER RETURN AN NO LOSS (EXCEPT INFLATION ) AND LESS WORRY.
I APPRECIATE YOUR COMMENT.EBRAHIM
Read Answer Asked by ebrahim on July 30, 2018
Q: Good Afternoon,
I don't follow the US market that closely, I'm looking for a handful of safer blue chip dividend payers ? Such as AT&T , perhaps you can list a few other names in various sectors you feel are well managed companies with good yield.
Thank-you
Read Answer Asked by Chris on July 30, 2018
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