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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: Hi 5i: I have two questions - please charge as appropriate.
(1) I have been holding CU in a dividend reinvestment account for about three years. The account focusses on stocks that provide a good dividend that is increased regularly (the usual Canadian suspects). CU has consistently underperformed the other stocks, and I'm wondering what the future holds, in particular given the changes in Alberta's approach to coal-based electricity generation.
(2) Could you give me data on dividend growth rates for EMA and BEP.UN?
Many thanks for your great advice and service.
Read Answer Asked by Roland on November 28, 2016
Q: Although I am using CRH in the heading this question is really applicable to any number of situations where a share price drops on an analyst's "downgrade", especially when there is no material news on the company e.g. - management malfeasance, loss of a contract etc.

I am not particularly concerned here about the company's future and fully expect the share price to go back to where it was relatively soon, especially in light of the fact that the target price is higher that what it was trading at and that the consensus price is much lower that the new target.


But I am left wondering why this or any other stock would have dropped so much. Is it because it was an RBC analyst and as a matter of course, all RBC brokers are instructed to put in sell orders (their clients are probably all up given the recent share price increases) to show clients the value of their firm's research (and then start buying it back when the price drops) or are there trading programs that always sell on downgrades or is this a particularly "good" analyst with a wide following or am I just being too cynical?

As I said, this isn't just about CRH and RBC. Or is every situation so different that you can't generalize and this is just "noise" that should be taken with a grain of salt?

Appreciate your insight?

Paul F.
Read Answer Asked by Paul on November 28, 2016
Q: Hi great team!
Know you do not cover US stocks specifically but you may be able to assist me.
I have a 4 yr. old grandson leaving in the US. His Mom would like to have me help her start a long term saving investment plan along the lines of the "Lazy Investor", with mthly contributions ( not too large) in preparation for his future education.
Would you have any suggestions as to the stocks she should invest in,those having a DRIP and OCP and with good history of dividends. This would be done in the US so no complications re Canada.
Many thanks for this and all the great work you do for us!

Casey
Read Answer Asked by Harold on November 28, 2016
Q: Hello 5i:
looking for "best" ideas for an income stock or stocks, to stay away from bonds. Growth is not a factor; I'm looking for real stability, both of price and dividend. I hold some ET, AD and could add to them. Have no preferreds and have thought about this space. Your take and ideas please
thanks
Paul L
Read Answer Asked by Paul on November 28, 2016
Q: Hello Folks: I have owned JCI for a few years which has not accomplished much. Would a switch into MMM or HON be worthwhile or should I stay put. Thank you
brian
Read Answer Asked by Brian on November 28, 2016
Q: Good afternoon,

My question pertains to holding US equities in various accounts. Can you please validate or refute the following:

Cash account: US dividends are taxed as interest-50%, and a 15% withholding tax is applied which can be redeemed during tax season.

RRSP: US equities are supposed to be capital gains and divends tax free. However, I have noticed that some equities, such as limited partnerships have their dividend taxed at 38% with an additional 15 % non redeemable withholding tax. Can you confirm this, and are their any other types of US equities that are Exempt from RRSP tax sheltering?

I have also been told that US equity ETFs that are listed in the US are also have their dividends taxed. Is this true? And would this be the same for US equity ETFs that are listed in Canada (ex: those listed on black rock Canada website )?

Thank you for bringing some clarity to the issue. Any other tips you may have would be well appreciated.

Cheers,

KR
Read Answer Asked by Karim on November 28, 2016
Q: Thanks for your answer on Shopify. Another question: is it too late to jump in? Does it have a competitive advantage?
Is the growth there? Is next year's forward p/e reasonable?
I seem to always jump in at the top. Can't figure out how they can compete with Amazon who dominates the market.
Read Answer Asked by Helen on November 28, 2016
Q: In the process of cleaning up the losers in my high risk portfolio. Could you please rank out of the above list which ones you would let go first?
Read Answer Asked by Shawn on November 28, 2016
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