Investment Q&A

Q: Thoughts on this ? Any suggestions for preferred shares in current interest rate enviroment

Q: I own CPD in an OPEN account. I am still trying to understand Preferred Shares, even after watching Ryan's very good presentation about it. I am still trying to figure out why the fluctuations in CPD, outside of bond yields, and interest rate fluctuations i.e. should I sell these now for Tax loss selling or keep and buy more perhaps. It might be helpful for me to understand how I can buy an individual preferred share in my TDInvestor account, then I could see the difference in share price to common? A few questions here....
Thanks
Marilyn

Q: Can I get your take on Dundee Corp. for a 5 year investment.
Thanks for all you do!
B.

Q: Hi,
My question is regarding the EFN.PR.C preferreds. Are they worth holding onto considering the overall company situation? My goal here is to protect capital at this point for this particular account.
Your take on these things is always appreciated.
Dawn

Q: Hi. I own Artis prefs (AX.PR.G). Given their financial results and the dividend cut (with the cut going to buybacks, growth and debt reduction), would you feel better or worse about the prefs today vs yesterday? Thanks

Q: Hi Guys: I hold an Altagas Preferred (ala.pr.e) which is down significantly over the last year. I hold it principally for the yield so I am not too bothered by the drop, unless of course I begin to believe that the company will have to default on its debt obligations. This seems (to me at least) a pretty unlikely scenario, notwithstanding all the current drama with its debt and stock price etc. Please give me your opinion in this regard. With thanks, Don

Q: I purchased ECN.PR.C at $25 because it paid 6.25% and, as a rate reset in a rising interest rate environment, with a guaranteed 6.25% minimum(!), it sounded great.
It has gone down from day one and has little interest. Should I pick up a few more shares at $21 with a juicier dividend or let it go and look elsewhere? If it doesn't go up with increased rates, when will it?
Thanks.

Q: My question relates to the latest type of prefs , the minimum rate test preferred. As a broker who has been retired some time.i am knowable about the rise and fall of prefs as they relate to rising or falling interest rates. But I struggle with understanding the minimum rate reset prefs. For example ECN.PR.A pays a 6.50 % div based on issue price. Given the current 5 yr rate the reset would be above the minimum rate. No matter what you would get 6.5%.
I know that other factors influence the trading price eg quality and the market itself etc.
Is this type of investment , all other things being equal that you would buy for the short as well as long term. I’m a very senior senior.

Q: Hello,
The ALA.PR.U preferred has fallen like all other ALA shares.
If they cut the dividend on the common, could they just as easily cut the dividend on the preferred?
My intentions are to generate USD income and still take advantage of the dividend tax credit.
Would you suggest I hold off from averaging down?
The yield (in USD) is appealing. Thanks

Q: Is this a good time to buy ENB.PR.U ?
Just like ALA.PR.U , the USD income is appealing.

Thanks

Q: Question about preferred shares in general.
I will use a Pembina preferred as an example. PPL.PR.I issued March 31, 2015.
Rate reset date is December 1, 2020.
Issued at 4.75% - therefore initially issued at 3.91% + .85%.
Currently the 5 year government bond yield rate is 2.36% (I'm getting this from iTrade and to reset Pembina will use Bloomberg GCAN5YR. I'm assuming they are the same or close).
Therefore the reset rate will be 6.27% (3.91% + 2.36%).
I am assuming that Pembina will either reset the rate or redeem the preferred at $25.00 on December 1, 2020.
Two questions:
1. Is there anything else they can do other than reset or redeem?
2. If they can only do a reset or redeem then why has the stock decreased in value from above $25.00 to $24.25 this past week? I would have thought with the pending increased reset rate or redemption the preferred would be holding its value.
Am I totally missing something here?
Thanks so much.

Q: Why on earth would preferred shares be tumbling so much over the past couple of days? E.g. see ZPR, CPD, HPR etc. It can't be the threat of lower interest rates? Can it? And if so what does that say about the prospects for the economy and the stock market? Or is this an aberration and an opportunity to buy some preferreds?

Q: Do you have any reasons why all the Pref share ETFs have dropped by 1.5 % or more today - in an upward market; and why they have all dropped 7% or so this month, almost as much down as the common share market?

Q: Hello,
Just wondering why CPD Preferred ETF has been going down in October. I would assume the unit price would be going up in a rising rate environment. In fact the opposite is happening. I know its based on credit quality of the companies but there is a lot of high credit worthy companies in this ETF.

Thanks

Q: Would now be a good time to buy bank preferred shares?

Q: Peter,

Where can I find the credit rating of specific preferred shares. ie PFD1,2,3 etc.?

Thank you

Paul

Q: Good morning.
I am looking to swap out some preferred shares that have dropped in value, for others that are approximately the same price. One that I found was TA-PR-H, however, I show them as not being profitable, and with high debt. You don't seem positive on the stock, according to other questions, but would you invest in their prefs?
Thanks, and enjoy your weekend everyone.

Q: Hi there - looking for a little bit of US income - these both show up on my Rate Reset Preferred Share stock screen as currently undervalued. Your thoughts? KKR A and B

Q: Hi Guys.

I have a question about Rate Reset preferred shares. Where do you think the cutoff point is for a company not to extend their preferred share?

The call will affect my yield to maturity calculation.

As examples, TD Bank has a preferred share with a reset of GOC 5 year plus 1.68% (TD.PR.Y) and another at 4.66% (TD.PF.G). I would assume TD won’t call the 1.68% and will call the 4.66% at maturity.

I will ask the same question in the forums under “preferred shares” to get additional opinions from any member wanting to help another member.

Thanks for your insight.
John

Q: Good Morning,
I am considering adding this preferred share ETF for tax efficient income returns and to potentially cushion the portfolio a bit if (when) there is a downturn in equity markets. I do not hold any other fixed income. How will preferred shares perform in a downturn assuming interest rates may go up for a year or 2 more and then back down during a economic slowdown.