Investment Q&A

Q: Hello 5i team. Suspect you've been asked this before, but wasn't able to locate the topic on the Q&A part of your site.

Are you (or any of your subscribers) able to provide a reliable source of information on current payout ratios for Canadian dividend stocks? I've been relying on the Globe Investor 'Watchlist' tool, but sometimes the ratios quoted don't seem right e.g., TransAlta at 27.30% compared to latest edition of Money Magazine at 720%. Lots of dividend-focused websites out there, but the ratios quoted seem all over the map.

Any suggestions would be appreciated. Thanks.

Q: I am contemplating buying some common and preferred shares in utility type companies for dividend income. I understand the Liberals if elected may possibly make changes to taxation of capital gains. Have you heard or have thoughts whether they may also target the favourable tax treatment of dividend income as well?

Q: We are both retired but still eligible to contribute 5000$ to a Quebec sponsored workers fund (FTQ) this year and get a refund on our income tax bill at the end of the year.
The funds have to be held 3 years.
Shall we contribute more or just transfer this holding to our Disnat account?
Thanks,
Serge Lacroix

Q: is this a turn around story?

Q: I currently have the following stocks in my wife's income portfolio
AD
ADW.A
BCE
BEP.UN
ENF
ET
WSP
Currently the portfolio is down 1.44% since purchase.

Of that port I have 17% cash to invest in other income producing stocks. Can you suggest which ones you would reccommend I add to this grouping. Or should I buy more of the same.

All originally had equal weightings.

Thanks

Q: Thanks very much for answering my question on covered calls as it relates to out 5i portfolios.

Your answer raised another question. If, using my example of AYA, you are called away on your call option and you no longer have AYA in your port.

Would you then, sell an at the money put to reesetablish the position using November option expiry ( or further out)?

Is this what you would do using this strategy?

Q: Hello Peter, after 20 years of mediocre-to-poor investing results (despite being an incredibly smart guy ;-)), I've concluded I'm just either a horrible, or a very unlucky, stock picker. With only 5 or so years til retirement, and with no RSP or TFSA room available, I've decided to build out a non-registered account with, eventually, around 10 companies. I know large-caps aren't your focus, but I'm looking for 'blue-chip' companies, preferably mostly dividend payers, and I'm prepared to sacrifice significant growth for a 'reasonable' assurance of capital preservation. I've started with ENB and TELUS (choices I trust you'd agree with, though you may want to run and sell these now). Can you please suggest a further five companies for this account to acquire over the next several months? (I was considering Cdn Tire for one? Your thoughts appreciated.) Finally, if you could add two similar choices from the US, that would be great.

Q: Just a comment.This is MNW's response to Elliott.MNW welcomed Elliott's interest & it shared the fund's view on consolidation in the industry.It does not comment on specific M&A discussion.As always,it look forward to creating value for all MNW'shareholders. Note that MNW management was very deligent in attending roadshows & conferences after release of last Q

Q: I have a well diversified portfolio of 33% global funds, 33% canadian dividend payers and 33% 5i's growth portfolio. I'm 40 years old and I just inherited an amount equivalent to 25% of my portfolio that I would like to invest. I am thinking about adding either BIP.UN or the Venator long/short fund. I don't need the money for twenty years. Which of these would be better? Thanks.

Q: Hi 5i

I have $10,000 to invest for my daughter's RRSP portfolio. She already holds BMO, BNS, TD and BEP.UN What investments do you recommend to round out the portfolio?

Thanks, Henk

Q: Hello 5i
Looking for some help with financial statements. Calians balance sheet shows a decrease of 344k in shares outstanding in the last 5 years. The cash flow statement shows that 9160k shares were bought back during the same period. Is this correct and how would the difference be justified? If I'm reading the statements correctly I only see about 7000k shares outstanding. Thanks for all you do.
Les

Q: I read with great interest your Post article re selling covered calls. A number of the holdings in the 5i portfolios are optionable.

However, question to you is wouldn't you miss a great opportunity if for instance you owned Amaya recently and sold a call on it, and missed most of its latest run up as a result of being called away.

I can see selling covered calls on some of the issues like BCE or IGM but isn't it risky losing out on a big upside move on some of the more volatile stocks?

Please advise.

Q: Can you give an opinion on Clr buying Macduff shellfish today.
Thanks.

Q: Do you see ctc.a as a buy at this level or does it look to continue its fall? Technically it doesn't seem to look good?

Q: Hi Team - I have CNR and WSP and want to add one chem to round out my Industrials. SPB or CHE.un? thanks

Q: Hello 5i,
Recently you mentionned that gic's might do just as well as a bond fund in this environment. I notice that a five year latter is mentionned often. Under current conditions, i have wondered whether, say, a three year ladder wouldn't be better. What are your thoughts on that? I imagine people suggest five years because it gives a bit more income. But, it also locks you in for a longer period
Thanks

Q: I sold Wajax & Transalta. Can you please advise your best picks for replacements for these. Combination of dividend and growth is nice but primarily which have the most future upside in a recovery?

Q: Hi Peter, Can you please comment on the safety of GICs in Achieva Financial Credit Union in Manitoba? The website says its deposits are protected by Manitoba credit union deposit protection. How does that compare with CDIC deposit protection? My accountant swears by it and has money in it.

Q: Hi 5i,

I often hear that the company is possible take over target. If that is the case, wouldn't it be better to be a holder of the "B" shares. "A" shares could be left with no offer. Am I missing something here?

Q: Mitel is up today, ostensibly on news that Eliott Management Corp has initiated a significant investment in MNW and combined with their holding in another similar company is urging the board, I think, to consider merging the two. (please correct me if I am wrong). This type of shareholder agitation is not new but I am wondering what to make of it. While not all cases will be the same, in general it seems to me that these types of action - whether it be calls for mergers, asset sell-offs, special dividends etc. are essentially a condemnation of current management since if these ideas are so good the management should have thought of them.

The market seems to like this latest move as the stock is way up but if it is such a good thing, why didn't the current management initiate it? Should we continue to have confidence in the current management or is someone like Elliott, who seem to have a good reputation, just a smart group that thought of something no one else did?

Your insight is greatly appreciated.

Paul F.