Investment Q&A

Q: Hello,

I am a recently retired individual. Over the past few years my wife and I have moved the majority of our investments into various income generating shares and units. (CDN Banks, Utilities, Pipelines and other higher yielding investments). One of our higher yielding investments is a holding in EIT.UN. We currently have about 3.2% of our combined retirement savings invested in EIT.UN. I'm hoping that you might be able to help me better understand how that vehicle is able to pay out an approximately 8.75% yield, on an ongoing basis? The dividend of $1.20 per unit appears to have been paid out continuously, since August of 2009.

I believe that a portion of the $1.20 that is being paid out per unit each year, is a Return of Capital but I have no clear understanding of what that might actually mean? Is an investment that is returning an investor's capital to them able to do so indefinitely? Wouldn't they eventually run out of capital to return to the investors and would that then necessitate a precipitous drop in the annual payout?

While we are enjoying the current dividends we don't wish to be blind to a potential decrease in those distributions and/or an accompanying drop in the principal value of our investment. Lastly, as it may apply to any tax considerations, please be aware that all of our retirement savings are held in various registered plans (RRSPs, LIRAs & TFSAs).

Thank you!

Q: I’d like to start a position in one or more income funds that offer a very high yield, but I’m not sure which ones to choose. As of Wednesday Oct 5th, these are the indicated yields I’ve found:

CLM 23.92%
PDBC 20.65%
SDIV 15.31%
QYLD 14.19%
RYLD 14.05%
XYLD 13.05%
BIGZ 11.01%
JEPI 10.94%
PDO 10.90%
PDI 10.79%
BXMT 10.38%
MPW 10.17%
STWD 9.84%
EIT.UN 9.42%
IDV 8.15%

Would you recommend any of these or do you have other suggestions? Are any of them too risky if the bear market deteriorates from here, or can they all be held long term? Are some of these yields too good to be true, like CLM and PDBC? Thanks for your thoughts.

Q: Hi all,

Please provide your thoughts on HDIF and EIT in terms of income sustainability and safety. Do you see any growth potential?

Thanks

Q: What's your current view on this ETF. Is the 8,52% dividend sustainable for an Rif or TFSA account?

Q: this seems to pay a high dividend and goes up most of the time over the past 14 years . would it be a good buy in a correction ?

Q: Yesterday eit.un announced the following special distribution of 44¢/share

"The estimated special distribution will be paid by issuance of the same class of units of the fund, and immediately thereafter, issued and outstanding units of the fund will be consolidated such that the number of issued and outstanding units of the fund will not change."

Why do they not just pay the unit holder the cash? Do I end up with more units/fewer units? Why do they do it this way?
Many Thanks

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.

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%

Q: In an answer about this fund on March 24 this year you said you thought there were better funds. Could you name a few and explain why please?

Q: Want to know your opinion on this company, do you consider this as a good income for the ling terme?

Q: What are your thoughts on this income fund, I’ve held it for over a year and see its the price has been climbing this year, up from a price in the low $10.00 range last year.
It provides a very healthy yield (+10%) and was a Gordon Pape suggestion over a year ago at this price level. Is it a good steady fund to own for income in one’s RRSP?

Thnx

Q: what is your opinion on canoe - above - is the distribution suststainable? and is any of it RETURN OF CAPITAL THANKS - KAREN

Q: Please comment on the recent news release. Is this just a warning that they may at some point reduce or cut the dividend payment ? How likely is it that the share price decreases as a result of such a new release ?

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?

Q: I would like to know how this fund pays such a large dividend in relation to the yields of its holdings. Secondly, how likely is it to maintain the distribution, especially in respect of the energy holdings. Thanks

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?

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.....

Q: Would you buy this for income and small growth.Thanks Phil

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

Q: Peter could you give me your opion on this stock
Thanks Pat