Investment Q&A

Q: Is there a place I can find the yield to call for a particular stock ?

Thanks

Paul

Q: hello 5i:
could you detail the differences between HFP and HPR, please, and what type of interest rate environment would be optimum for each? Would holding BOTH be a strategy and is it necessary?
And, could you include backtest results as to what could be expected in the case of an extreme drawdown?
thanks
Paul L

Q: Brookfield has a new offering - 4.75% rate reset preference shares, Series 48. Would this make a good addition to an RRSP?

Q: Can you please recommend Canadian and US preferred share ETF's as fixed income part of my portfolio. Would rate reset preferreds perform better in a rising interest rate environment?

Q: I hold the above preferred TA.PR.H CUSIP 89346D727
Holders have been given the following conversion privilege option:
Conversion-to convert on a one to one basis any or all of their cumulative redeemable rate reset series E ist pref shares of TA corp INTO Cumulative Redeemable Floating Rate Series F ist pref shares of TA (89346D719)
Is it better to convert or not and an explanation would be helpful
My sincere thanks

Q: Hi 5i,for some reason I didn't get a reply for my yesterday's question. I would like your choice of the above, perhaps suggesting better ones. Can you explain why are they trading substantially below their book value. How will future interest rate increase effect their price. Can you suggest a web site for rate rest prefers. Many thank, J.A.P. Burlington

Q: Hello i5, Please help me to understand why cm.pr.p @$18.26,paying 4.26%div,redeemable @$25.00 with a floating rate feature trading at, in my view, a large discount price? or is it? Please explain how the actual floating is, in terms of %div on this preferred. Also would appreciate receiving a couple more alike rate reset ones at lower than redeem Price. How would the reset preferred be effected by the prime rate change. Many thanks J.A.P. Burlington

Q: What is your take on the safety of the dividend with GMP.PR.B? Why is it poorly rated by the agencies? GMP Capital doesn't seem to have much debt. The dividend yield and chance of a higher reset in a rising interest rate environment seems attractive.

If you don't like it, what rate reset preferred would offer a better combination of risk/return?

Q: I purchased the series E convertible debentures in April, 2017 assuming that they would mature September 30, 2017. They are in my children's RESP. It was going to pay for their tuition this semester. As you know they have made a proposal to extend the maturity date to September 30, 2020. It is in my best interests to receive the funds on September 30, 2017. I will likely vote no to the change. Do you think the debenture holders will still receive their funds if the motion does not pass?

Q: Boyd Group just announced the early redemption of their 2021 CV's. Can you tell me the common share conversion (how many per bond) for this issue.

Thanks

Sheldon

Q: I own AFN.DB.A and CGX.DB.A convertible debentures, both of which reach a "hard call" date on Dec 31, 2017. How likely are they to be called? If called, are they likely to be redeemed with cash or with common shares?

Q: I own a preferred share, BAM.PR.Z which comes up for reset later this year which is currently trading around $24. I bought it for $25 at issue. I have several options available to me including the option to take the reset for another 5 years at a slightly lower interest rate which is still a decent return. I am concerned that, if interest rates rise, albeit probably slowly, that the value of the preferred would fall and my capital would be eroded. At the same time there is also the possibility that, if rates rise, BAM would call the preferred at some point and I would get the original $25 a share back. I could also sell the preferred in the market and accept a fairly small loss now. Can I have your opinion on which you feel is the best course of action.
With thanks, Lynda

Q: I'm stunned by this asset class I had not known about until seeing the link you provided in a recent answer. I had lost interest in preferreds after having them decline in share price upon reset to a low rate of yield.

These seem different. The reset is guaranteed to be a good amount of yield (e.g. 3.5%) no matter what. Which is more than good for me. It looks a lot like the safe bond that I wish existed but doesn't. (I am retired, don't need to touch my investments, just want them to grow a bit more than inflation, and NOT DECLINE, until such time as I need to start taking some income.

So what's the catch?
a) if interest rates rise, the value of the shares will go down? But that may not happen so much with these will it? Since the reset is also based on then-current interest rates plus the guaranteed amount. Plus most of the BNN experts say inflation seems to be the last thing that's going to happen anytime soon so rate increases won't be very rapid or substantial. And suppose they are wrong - as long as these are higher than bonds they wouldn't get sold off too much would they?
b) the company could get into trouble somehow and default. Let's say we pick a company that's stable and that won't happen.
c)..... what else do you think is important to consider.

Q: Hi Peter, Globe has suggested to buy BCE and RY min. rate resets for income and growth, how will they perform in a rate hike? please give me their trading symbols, perhaps your better choice . Also, would appreciate your choice of FB,SHOP,AAPL and or if you have a better one for growth. Many thanks, J.A.P.,Burlington

Q: Thinking about a higher risk investment: DC.PR.E currently pays 8% and is retractable June 2019, yielding another 6% in capital gains.

What are the chances DC can payout the pref? Can you please shed some light on their viability. Thanks.

Q: Hi Peter and team

I was thinking of starting a position in DR after the last Q report (and I wish I had) but I found something in the financials (from morningstar.ca) that gave me pause:

Earnings per share: $.46
Earnings per share (diluted): $.18

The diluted share count did grow by 8,000,000 (or roughly 25%) but that doesn't account for the difference in per share earnings. Was there a share offering? How should I interpret the bigger difference in per share earnings versus share count?

Thanks
Peter

Q: Convertible bonds are obviously not exactly the same as corporate bonds due to the possibility of converting them into common stock. I was wondering if they are treated exactly the same as the other bonds a company may have issued as long as they are still in the bond form? That is are they they still guaranteed to be paid as long as the company is solvent and are they at the same debt obligation level as other bonds issued? Thanks you.

Q: Currently I have CBO, CLF and XHY in my RRSP acct and they represent my entire fixed income investments. I am looking to add CPD to my Non-Registered Investment acct to add to the FI component of my portfolio. CPD provides a good yield which is tax advantaged. I will be adding to this overtime as I rebalance my portfolio. Basically taking from my growthier winners with lower yields. I am retired and looking to add yield and reduce risk to my portfolio.
Given the proliferation of ETFs would CPD still be your choice for Preferred Share ETF if designing your Income portfolio today.

Q: Please advise me if I am better holding my BCE.PR.A preferred shares which come up on Sept 1, 2017 as a fixed quarterly dividend or to convert them to cumulative redeemable floating monthly dividend.

Thank you

Q: Preferred Shares:
Can you explain the difference between Preferred and common shares ?
can they be considered "bond proxies"?
Is now a good time to add to "CPD"

Thanks, Peter