Investment Q&A

Q: The last line in the recent article on bonds that you sent members reads, “In our minds, the better place to be within fixed income is higher-quality, shorter-dated fixed income, where you’re not taking on as much risk.” Assuming you concur with this statement, what investments do you recommend that align with "higher-quality, shorter-dated fixed income"?

Q: Peter, among the Canadian small cap and microcap stocks that have been indiscriminately sold off over the past year or so, which ones do you think stand the best chance of bringing substantial returns when the markets recover?

Q: An interview with the Globe & Mail about ten days ago, David LePoidevin of Canaccord Genuity said "Our most exciting trade right now is the reset, fixed-floating preferred shares, which we’re buying at an average price of about 60 cents on the dollar. The dividends were reset about three years ago when rates were 0.5 per cent. The five-year is above 3.5 per cent, so the dividend increases are stunning. Not enough people are doing the math, but you can buy something that looks like it’s unattractive today, but in two years, you’re going to have a yield that might be approaching 9 or 10 per cent." Elsewhere he clarified that he is buying only non-bank preferreds.
What is your view on this? If you agree, what rate reset preferreds would suggest? Mr. LePoidevin mentioned BCE, TRP and ENB but no specific series. The tickers above are just my guesses.

Q: safe to say this will be dumped from the income portfolio. its no longer an income stock, thoughts

Thx

Q: What do you think about GoEasy diluting shares?

Q: SeekingAlpha sent an email update on NWH today stating:

“NorthWest Healthcare reported Q3-2022 results and updated on a few key initiatives.

Adjusted funds from operations dropped sharply and dividend payout ratio hit 133%.

Dividend cut looks highly probable in 2-4 quarters.”

The share price of NWH has been weak as of late, but the reaction to the quarter wasn’t terrible; ending the trading day down 1.01%.

What would be 5i’s assessment of the quarter and SA’s prognosis?

Would you view this as a hold or a sell? I had purchased NWH for income going into retirement thinking that the dividend should be relatively stable.

Q: What is the date of when the new Brookfield symbols will trade? If not known, guesstimate? I remember when BIPC was split out, the share price cratered as some people received shares they didn’t want to hold. Do you think the same will happen with either BN or BAM after the split?

Q: Its been a busy earnins seasons.
A few dividend increases you missed on your wonderful dividend change site
GRT.UN Nov 9th 3.20% increase
AD.UN Nov 9th 3.00% increase
CTC,A Nov 10th .6.25% increase
DIV Nov 14th 2.10% increase
Thanks a bunch

Q: I’ve trimmed some winners and stocks that have run up in the reverb rally and I’ve had some good energy names. Can you suggest any laggards that might come up on your screens? They could be growth , cyclical or value, etc but just some names that have upside but might play catch up.

Q: Can you please give me two top picks for the materials sector in both Canada and the US. Also a few thoughts on the reasons for your choices. Thank you.

Q: I see in a news item that Brian Hill, founder and Exec Chair of ATZ, is selling $70M in shares for estate planning purposes. No price identified. The stock did sell off a bit but isn’t this insignificant? There is no dilution of returns among shareholders as no new shares are issued by the company.

Q: The only energy holding I have currently is SU at 5% of my total portfolio. Given conflicting economic predictions for the next 12-18 months, would you suggest I increase my energy holdings or stand pat? If increase, by what % and could you provide 2 or 3 names with some growth and dividends >2%? Thank you.

Q: Hi guys...great service. Any thoughts on this company? more upside? balance sheet looks quite solid. Step energy.

Q: Hi Peter, Ryan, and Team,

Your last answer to a 5i member (Peter) regarding the sustainability of AQN’s dividend is more positive than David Berman’s piece in today’s Globe & Mail.

In light of his article, where he repeated a comment by a Scotiabank analyst: “We have taken all dividend growth out of our model and, even still, the payout ratio remains 103 per cent of earnings per share in 2023 and 97 per cent in 2024,” Robert Hope, an analyst at Bank of Nova Scotia, said in a note.

Algonquin’s management said last week that it was targeting a dividend payout ratio of 80 per cent to 90 per cent, meaning that the company expects to distribute no more than 90 per cent of its profits as dividends over the longer term.

“This payout ratio target would be above its peers and, in general, makes growing the business without external equity more difficult. If the company does pursue a full reset, we could see a reduction in the dividend,” Mr. Hope said.

Is 5i still of the opinion that the dividend won’t be cut? My feeling is that if in fact the dividend is cut, the stock will decline even further, and as always, welcome your thoughts.

Q: What is your opinion about its recent quarterly results? I have it in margin account due to its high yield. Do you think distribution is safe?

Q: After seeing my bond etc holdings loosing value at every rate increase, I am considering buying some higher yielding individual bonds to hold to maturity. My trading account has available bonds issued by these two companies. Around 30 months duration and about 6% yield, including capital gains, as they are available at discount to par. would they make sense as a 1- 2% part of portfolio of retired 60 year old? How risky are these companies? Brookfield PTY,Callaway REIT,Ford Credit

Q: of these two companies, which would be your favorite? Could you please compare these two companies. Thank you

Q: I have heard it said that "the first dividend cut" will not be the last. Is this the case for SYZ? Would you recommend a HOLD or a SELL?

Thanks for your service!

Q: Sold half my position in VET in the mid $33 back in summer and I wish I would have sold the whole part. Looked at VET's Q3 report and it seems that it is the threat of a European "excess profit tax" that has pummeled the stock lately and I understand why and think the sell down is warranted. But the way I understand it there could be a unseen upside in VET in Q1 of 2023 when the VET's purchase of Shell's portion of the Corrib gas plant is completed. According to VET all of the 2022 Cash flow from Corrib should go to VET. When that cash flow is added to VET's income statement could they restate their 2022 earnings to the upside? I am not sure how this works but it seems to me that there is some 'hidden' earnings in VET that can not be realized until the sale of Shell's position to VET is officially completed. One thing we know is that Corrib definitely made money in 2022. Could the increased earnings from Corrib be enough to counter the Euroean excess profit tax. Long question and I hope you understand what I am trying to get at.

Q: New Tax Formula forETFs.?
Have tou seen this?
Looks like a good reason to only buy ETFs in registered accounts,
Just to avoid the tax calculations nightmare,
https://www.advisor.ca/news/etfs/new-taxation-formula-for-etfs-to-take-effect-this-year