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Investment Q&A

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

Q: IPL pays an juicy dividend yield of over 8 per cent at the current share price. The dividend is covered and they have growth potential with their proposed in service date of 2021 for their propane to plastic processing plant. It looks like a safe stock with some good upside in a couple of years. But it makes me a little nervous that it is a little like the old Canexus in that IPL is getting a little bit out of their wheelhouse of expertise (shipping stuff around in pipelines or storing those products) and they are entering into more of a manufacturing business line. Is that diversification or worsefication? Is it a stretch for a pipeline company to think they can build and operator a propane-to-plastic "factory"? Canexus was a chemical company that thought they could build a oil-by-rail loading facility and in their case diversification was definitely worsefication!! I am still interested in IPL but I would appreciate you thoughts about IPL growth plans.
Read Answer Asked by Paul on February 04, 2019
Q: Hello. On Jan 31/19 I purchased DRG.UN in an RRSP account. I have a couple of questions:

1) A recent article by Globe & Mail columnist Eric Reguly (Jan 31/19 "Italy is back in recession, and Germany might not be far behind") has me wondering whether this REIT would be adversely affected if a recession happened in Germany, as this REIT’s "German office properties represent the majority of its holdings in terms of total square footage" and "derives nearly all of its revenue in the form of rental income" (per Morningstars description)

2) You responded to a previous query that this REIT would be better held outside an RRSP. Could you please explain why.

Thanks for your guidance.
Cheryl
Read Answer Asked by Cheryl on February 04, 2019
Q: Hello 5iR Team, Many brokerage houses have developed the portfolio structure of identifying a short list of their "Highest Conviction" stock picks. Then they separate them from all of their other "BUY" rated stocks and/or stocks they have selected to put in a portfolio.
Yes, I know you have your three model portfolios but choosing a few stocks from these portfolios or something different forces everyone to concentrate and co-operate to develop the ultimate 5iR focus list.
Is this a concept the 5iR team has considered?
Would it be possible to ask at this time can the team give me what 5iR thinks are its' Highest Conviction ideas for 2019? Thanks Team. Cheers, Chris

Read Answer Asked by Chris on February 04, 2019
Q: Good morning crew.

A general observation that you can feeel free to correct. Having been a member for two plus years I notice that your patience with picks that do not have a dividend, or a small one, seem to have a shorter leash that say a stock that has a healthy dividend.

Would that be accurate or are the prospects for growth what really matters. Like GUD for example.

I know this is a simplistic observation, but my own patience is somewhat relaxed when in receipt of a dividend like an ENB or PBH.

Thanks. Appreciated.

KC
Read Answer Asked by Kelly on February 04, 2019
Q: Please comment on PPL's announcement pertaining to the building of a new petrochemical plant. In December 2017 IPL announced a similar project and since then the share price of IPL has noticeably under performed their Canadian pipeline peers. How different is PPL's project from IPL? Do you know much about their Kuwait based partner? How will this impact the PPL balance sheet? Do you expect they will need to issue more shares to finance this project? PPL is one of my largest holdings and I invest in it because they have shown to have good management and have the steady cash flow from the pipeline businesses. Does this transaction change that thesis in any way? The project feels like an unnecessary bet and all of a sudden a riskier holding for a conservative income investor.
Thanks
Rob
Read Answer Asked by Robert on February 04, 2019
Q: What are your thoughts on the partnership with with Petrochemical Industries ("PIC") of Kuwait, to construct a 550,000 tonne per annum integrated propane dehydrogenation ("PDH") plant and polypropylene ("PP") upgrading facility, expected to be in-service in mid-2023 and expected to generate annual run-rate Adjusted EBITDA of $275 to $350 million, net to Pembina?

Impact to balance sheet, cash flow, and growth? Thanks.

Read Answer Asked by Robert on February 04, 2019
Q: Is there an etf that can be purchased in Canadian $$ which gives an investor broad international exposure except to Europe? Thank you, Bill
Read Answer Asked by Bill on February 04, 2019
Q: Good afternoon 5i,
On Dec 5 Terry asked this question:
Which company would you recommend for a proxy to SLF tax loss selling? IAG or GWO? I dont like MFC because they cut their dividend in 2008.
Thanks

I don't mind mfc that much and besides, I will only be holding it for a month. Can I get your updated view on what would be a good placeholder for Slf, no conditions of any kind applied?
thanks
Read Answer Asked by joseph on February 04, 2019
Q: Can i get your opinion on plus, it trades on the cse around 6 dollars thanks harris.
Read Answer Asked by Harris on February 04, 2019
Q: Hi 5i team,
I would like to purchase a US equity ETF in C$ fund for my TFSA. For a conservative investor, would a dividend growth ETF be more suitable? What would be your top pick ETF for this purpose, hedged and unhedged? Is the dividend income subject to tax withholding? Or should I be looking at HXS, though the swap fee may cancel out the tax advantage? Thanks
Read Answer Asked by Willie on February 04, 2019
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