Investment Q&A

Q: Good day gentlemen,
Does this company still have a viable business model? So much has been made about this potential take over but I believe the market has discounted this possibility for quite some time. What I’m more concerned about is what’s wrong with the fundamental business? They have been around for some time. Can they no longer produce returns? I know you mentioned that perhaps you would consider selling due to lack of takeover news. Would you consider holding for yield and a solid business, with potential upside?
Thx

Q: Good day gentlemen,
Given the recent market sell off some dividend stocks seem to be sporting juicy yields. Can you compile a list of your top 10 high dividend payers.
Thx

Q: I have a reasonable balance of these stocks in my TFSA. With the pullback, should I add to a laggard or introduce a new one? Open to ETF as well. Long term.
Have great weekend.
Paul

Q: Hello Peter,

I am a long time 5i Member and happily own the Balanced portfolio and 5 names from the growth portfolio across my TFSA, RRSP, LIRA and Non-Registered accounts.

Recently I have taken on a small business loan and excess cash to invest. Given that the business loan is tax deductible, I am looking to invest the excess cash in my Non-Registered account.

Can you recommend 5 steady blue-chip Canadian dividend payers to help mitigate the interest costs on the loan? I already had T, ENB, SLF and BNS in mind.

Given that I would only be leveraged 10% in equity, and the latest sector rotation away from non-cyclical stocks (Telco's, pipelines) should I consider more growthier names for my equity picks? That would mean adding to my already owned positions in the 5i Balanced portfolio.

Of course, the last option is to pay the business loan and call it a day. I will however be in equites for the next 30 years and know that in the long-run it is a equity markets is a great wealth creator.

Lastly, great foresight and homework done (not luck) on the AVO selection!

Thanks for your continued support and wisdom!

Q: Good Morning
I will appreciate your comments on EMA
Emera's debt to equity ratio is 69.43% (my broker's figures)
Can you please comment whether EMA will be able to pay down this debt with the rising trend in interest rates?
Is the dividend sustainable?
I am down 10% as of today. I am planning to average down if it drops below $40. Is this advisable? Or should I sell?
EMA is in my RIF account.
Thanks again for your insight.

Q: Hello
Can you comment on Saputo earnings?

Thank you
Stephane

Q: Hi 5i Team,
Can you please comment on Rogers Sugar's earnings release today? There are so many adjustments to their numbers that I find it difficult to gauge how good a quarter it was. I hold this stock primarily for income. Can you please comment on the safety/ability to grow the dividend, and free cash flow trend over the past few quarters?
Many thanks,
Brian

Q: together these 5 stocks make up 10% of my portfolio. not a terribly large weighting but enough that i have felt the recent decline. I understand the correlation between interest rates and these companies that are viewed as bond proxies. Since Jan 1 2018 BCE is down 5.5%, BEP is down 7%, BIP is down 8%, TRP down over 9%, ENB down over 10% (all return % are excluding dividends). ENB is now yielding over 6% if their Q1 2018 dividend is extrapolated for the FY 2018. my question is at what point does one consider the decline overdone and step into one or a few of these? a 6% yield on ENB is looking attractive to me but do you think there is still more downside risk in these names?

Q: Hello team,

Do you think the sell off on these fine dividend payers is done? I want to buy some blue chip dividend payers (I have none) but I wonder if the impact of future rate hikes is already/completely priced in for these types of stocks. What do you recommend: wait a bit longer or just buy now? I am afraid of buying now and watch them go much lower than their current price. At what price(or multiple) each of these would be a pounding-the-table buy? Would you please order them in terms of your preference for a very long-term hold.

Thank you very much indeed!

Q: Hi:
I'm currently underweight in bonds, and all my current bond holdings are in Canadian dollars. I am considering the iShares TIP. Could you please give my your opinion on this ETF? Thanks

Q: So many questions related to income and share prices as interest rates increase: here’s one more.
Could one justify selectively adding to the ENB-BCE- KWH- FTS - TRP -T types of stocks as share prices drop... and we therefore see higher dividend rates?

The strategy is to own these companies almost forever (unless something unforeseen or disastrous happened) and enjoy the dividends.

From my vantage point this seems to make more sense than buying bonds or low rate gic’s for income.

Your thoughts please with this dilemma. We of course have already seen the share prices drop and are wondering what to do with cash on the sidelines currently.

Q: I have Sherritt bonds 8% coupon in my TFSA expiring Nov. 2018. I got a proposal from the company to buy them back. Here is the proposal:

Option 1: Auction tender - The company is offering to purchase their debentures of SHERRITT INTERNATIONAL CORPORATION at a purchase price not greater than CAD $950.00 nor less than CAD $752.00 in cash increments of CAD $1.00, for a maximum of CAD $75,000,000 in value of its shares. All shareholders tendering at or below the purchase price will receive the same amount. If more than CAD $75,000,000 were to be paid, shares will be paid on a pro rata basis. Subject to proration. Tax consequences: Disposition

Option 2: Purchase price tender - The company is offering to purchase its 8.00% Senior Unsecured Debentures due 2021 of SHERRITT INTERNATIONAL CORPORATION. The purchase price for its 8.00% Senior Unsecured Debentures due 2021 of SHERRITT INTERNATIONAL CORPORATION will be the lowest price which will enable the company to purchase common shares for a maximum of CAD $75,000,000 in value of its shares. If more than CAD $75,000,000 were to be paid, shares will be paid on a pro rata basis. Subject to proration. Tax consequences: Disposition.

Option 3: Do Not Participate. (Default Option)

What would you advise?

Q: Hi Team, I realize that dividends are an important part of any portfolio and I know that 5I regards "Drips" very highly and I agree. Since I have no recollection of the investment world with high interest rate, how is "Dripping" affected in a rising rate market in the long run? Especially the utilities and the Bond Proxies.In the past how have names like TRP, FTS, EME performed. The higher yielding names in my portfolio in the utilities space are T and AQN. Should I keep dripping them? I am not worried about the other sectors stocks with dividends just the utilities.Thank-you in advance! Sam

Q: Other than the year 2009, the chart on this company appears to grind up to the right. Would consider this stock to be a good candidate for long term income? It does appear to have a low trade volume, so would that indicate difficulty in selling the stock if you wanted to get out?

Q: I'd appreciate your updated opinion on the company. Would you rate it a buy at current levels?

Q: Can you recommend 2 or 3 bond funds in Canadian $ that would be the least volatile and offer a return for a 3 to 5 year hold? I would prefer one Canadian and one U.S. or international. This would be my sole fixed income holding. Thanx

Q: I am slightly overweight the semi-pipeline sector with TRP, ENB, IPL and KEY, totalling just under 20%. I am thinking about selling KEY and either holding the cash or putting part of it into IPL given IPL's recent price and yield. KEY and IPL total about 5.5% of my portfolio. I also intend to sell some TRP when it gets back over $60. I am a patient investor with no need for funds (ever) but I will be 70 this year. How would you compare IPL and KEY in this scenario? Thanks. Great service and I've tried a lot of others.

Q: What's your favourite Canadian value stock that yields at least 4% ? Thanks

Q: Hi 5i, I would appreciate your advise/evaluation of lbs and lcs (Lifeco Split Corp.). Also, please tell me what is the actual fee I would pay if Management fee is .60%,Managment expense ratio is .95% (exluding preferred distribution) a service fee of .40% (paid quarterly). Many thanks, J.A.P. Burlington

Q: Because I cannot contribute new funds to my LIRA, I have a number of high-yield stocks to generate income that can be reinvested in growth. Full position in PDC for diversification and smoothing effect, half position in everything else. How safe are these utility and REITs dividends with 7-9.5 % yields? Alternative suggestions for 10 year plus strategy? (Please deduct as many credits as required)