skip to content
  1. Home
  2. >
  3. Investment Q&A
You can view 3 more answers this month. Sign up for a free trial for unlimited access.

Investment Q&A

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

Q: Which of the above stocks would you consider having the greatest growth potential within the next one to two years with the least amount of downside risk? Can you please provide your rationale for your choice.
Thanks
Read Answer Asked by Thomas on December 04, 2017
Q: I am looking at these two stocks for income and growth, 3-5 year hold. They are different sectors, and either one fits into my portfolio balance wise. ABT seems to be on a downward trend since it was your top pick, would you still recommend? Would you suggest a full position in one or the other, or half in each? Thanks as always.
Read Answer Asked by Kim on December 04, 2017
Q: I would appreciate your take on - The cracks in the Enbridge dividend story by David Milstead in the G&M dated Dec 3, 2017. Some of the key points in the article include (all CAPS from the article):

- ENBRIDGE EMPHASIZES 'AVAILABLE CASH FLOW FROM OPERATIONS' TO INVESTORS WHEN IT TALKS ABOUT THE SUSTAINABILITY OF ITS DIVIDEND. IN CALCULATING THIS MEASURE, IT IGNORES MOST OF ITS CAPITAL EXPENDITURES, DEDUCTING ONLY 'MAINTENANCE' CAPEX TO ARRIVE AT THE NUMBER. THAT HAS LEFT BILLIONS OF DOLLARS OF CAPEX OUT OF THE MEASURE OVER TIME. WHEN ALL OF THE COMPANY'S CAPITAL EXPENDITURES ARE DEDUCTED FROM OPERATING CASH FLOW, ENBRIDGE POSTS NEGATIVE FREE CASH FLOW IN NEARLY EVERY YEAR. STILL, THE COMPANY PAYS DIVIDENDS — AND ISSUES DEBT, AS WELL.
- For the third quarter, Enbridge reported $360-million in maintenance capital expenditures. Total capex was $1.95-billion. Depreciation, a measure of how much of the company's property, plant and equipment was "used up" in the period, was $848-million.
- In the last 10 years, from 2007 on, it was only in 2016 that Enbridge actually posted positive free cash flow, a paltry $83-million. The 10-year total is a staggering $24.1-billion in negative free cash flow. That's before paying out $7.4-billion in dividends. Perhaps not coincidentally, the company issued almost $25.6-billion in net debt over that decade. It now has $65-billion in debt on its books, including the tens of billions it took on in the merger with Spectra Energy Corp. this year.
- https://www.theglobeandmail.com/globe-investor/inside-the-market/the-cracks-in-the-enbridge-dividend-story/article37172663/

I would have expected that maintenance capex would be inline with the depreciation expense. Is Milstead highlighting one of the risks in ENB - ie., that the dividend is solid as long as the market has confidence in the Company and it can raise additional capital each year.

What mid/large-cap companies in this sector would you would recommend that have more conservative financials?

Thank you.
Read Answer Asked by rajiv on December 04, 2017
Q: I am losing faith in this company. The "growth"stock continues to slide yet 5i continues to recommend it. Where is the disconnect? What am I missing?
Read Answer Asked by Paul on December 01, 2017
Looking for more? Sign up for a FREE 14 day trial! No credit card required

We invite you to sign up for a 14 day free trial of 5i Research!
Experience all the benefits and tools we have to offer; stock research, model portfolios, Q&A with our experts, and so much more. Join a community of like-minded investors today!