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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:

Can the Price to Earnings ratio (P/E) be used to determine the valuation of these yield plays or should I be looking at the Net Asset Value (NAV) instead?

Using P/E they rank cheapest to most expensive as: DFN, FIE, ZWC and EIT.UN. Is that accurate and if not, how would you rank them, cheapest to most expensive?

Thanks in advance,
Greg.

Read Answer Asked by Greg on July 28, 2021

Q: Good morning! I note that you've rarely had much to say that is positive about EIT.UN. Most recently you suggested that XIC would be a better choice, and I don't understand why. ( For one thing it seems to be an apples/oranges comparison.) EIT.UN is up almost 40% in 52 weeks. And why should I care too much about the disparity in fees, if the one yields 10% and the other, less than 3%?
Regarding return of capital, I know that is has always been high, but here is the breakdown from my 2020 T3:
R.o.C. 42.7%
Cap. Gains 53.3%
el. Dividends 4.0%

Read Answer Asked by chris on May 12, 2021

Q: I have positions in several ETFs trading on the TSE. I like to keep up to date on major holding changes and weightings within each ETF. Is there a good (one stop shop) source of updated information, other than going on to the separate ETF company websites?

Read Answer Asked by Edward on August 05, 2020

Q: What are your thoughts on EIT? It seems, at the moment, to be trading well below NAV. When I read the list of top 25 holdings, it mostly looks reasonable to me. But I'm not sure I understand their press release:
"[EIT] announces today that it has determined to suspend the Premium Distribution(TM) component and Distribution Reinvestment component of its Premium Distribution(TM), Distribution Reinvestment and Optional Cash Purchase Plan (the "DRIP") ".
I get that they've cancelled the DRIP but what is the Premium Distribution? What is the forward dividend at this time?

Read Answer Asked by Peter on March 25, 2020

Q: Like a few of your previous questions I find myself in the pleasant position of being overweight BIP.UN { 21.4 % for the third time } and BEP.UN { 5.6 % } . The latter is only marginally overweight so I'm good with that. The former will be trimmed to 15 % for the third time. I know that is still too high but I'm comfortable with it. I was planning on deploying the funds taking a 4 % position in EIT.UN and 2 % into cash. But I've noticed that 5 I generally recommends taking at " least " a 5 % position in ETF's. I wouldn't be adverse to that as it has a juicy yield. I realize that weightings are a personal decision so I'll ask it this way. Between what percentage weighting low to high would 5 I recommend I make my decision in a moderately conservative portfolio ? Also I have done my due diligence on EIT.UN... I'm aware of the MER. I'm aware of the energy weighting. And I'm aware of being capped by a covered call strategy.... What I don't know is the return of capital and how much this should affect my decision . On their tax page I see capital gains as a return of 48 % and return of capital as 46 %. To make it meaningful should one be subtracted from the other ? Basically I'd like to know what the number is and " how to ? " and " should I ? " use it in making my investment decision ? Also in the selling of the 6 % BIP.UN should I wait to receive my free shares before doing so ? ... Thank you for your terrific service.....

Read Answer Asked by Garth on November 28, 2019

Q: Would you please give me your current opinion of this stock. The price seems to have stayed in a trading range of $ 8.30 - 8.90 this year, much lower than previous years. However, it still continues to pay the high dividend & has done now for some 15 years or so.

Even with the decline in price it still has a good overall yield.

EIT is another high yield stock. What do you think of it.

Thanks

Read Answer Asked by Ross on September 02, 2019

Q: Never heard of EIT.UN until I saw question here the other day so I had a look at it. As well as looking at previous 5I questions and answers. What 5I doesn't like appears to be the fees and 20% weigthing in energy. Looking at it this is what I see.

1} Over the past five years trading between ten and thirteen dollars. Currently trading at the lower end. I assume because of oil and gas stocks being hammered. Though there is always the possiblity of going lower I have to think that sector is near bottom.... I have no representation in oil and gas so whatever percentage of " energy " they have in oil and gas as 20% of a 4% position in EIT.UN doesn't seem unreasonable.

2} If I were to insert EIT.UN in 5I's income portfolio I would in comparison classify it as lower risk, lower volatility, and higher yield than many in there. So assessing it from a risk point of view doesn't seem any more than other securities in there.

As a covered call ETF I realize up or down swings may be capped. But what I see is the bottom end of the trading range nearby { maybe nine bucks if things go for a tumble setting aside a 2008 2009 scenario where it was somewhere around 7 dollars } and the upside if lucky maybe twelve or thirteen dollars. That seems low risk for an 11.5% yield.....

Please comment on my reasoning ? I trust 5I's opinion way more than mine....Also what are the fees ? On their site they list three numbers ranging from 1% to 2.8%.... And would a 4% weighting be appropriate in a moderately conservative portfolio that is comfortable keeping the odd high yielder in there ?.......Thanks for your great work and advice.

Read Answer Asked by Garth on August 29, 2019