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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: Retired dividend-income investor. On the company page, Park Lawn in listed as Consumer-Cyclical. On the Monthly Income Portfolio report, it is listed as Consumer-Non-Cyclical. I would assume the latter is correct...one would think that burial services would be considered a staple. Question #1 = Please confirm your view as to the appropriate sector for PLC.

I am light on Consumers and have been wanting to top up this sector, but am thinking of staying away from the Discretionary sub-sector until things attempt to normalize over the next few months or quarters. I currently own PBH and NWC, both food companies. I used to own MG, LNF, AW and I will reconsider them again at some point, especially LNF. Question #2 = What are your thoughts about taking a new position in PLC ? I have read your March 25/20 report which concludes with a B+ rating. Some of the current metrics look ok (P/BV, P/CF, P/S, Beta, forward P/E). However, I calculate the payout ratio to be 175%...am I right? Is the dividend sustainable? I see a ROE of 1% from one source and 8% from a 2nd source. Comments please...thanks.

Q#3 = I actually need two consumer stocks that pay a dividend, ideally over 3.0%, but I'm willing to bring the threshold down to around 2.5%. Would you please rank PLC, LNF, AW, MG and any other consumer stock your filter system could identify for me to consider.

Thanks for your help...much appreciated...take 3 credits...Steve
Read Answer Asked by Stephen on April 14, 2020
Q: Hello 5i Team,
Thank you for all your guidance throughout this type of market. I'm sure all the Canadians are greatly appreciating your impeccable work for us DIY investors.

If you have ~$20k of cash today and your goal is to appreciate this into a much larger amount not too long after coming out of the other side of this market (i.e. after a recession), which 10-15 Canadian equities would you go after with a good sector diversification?

Since I am younger and my nest egg is still small, I'm not too concerned or rely on dividends. I'd much rather have stocks whose valuations may appreciate greatly rather than going for the slow and steady dividend aristocrats and blue-chips.

I have been eyeing the large discounts on Canadian equities such as the following: AC, CAE, SLF, GSY, LSPD, PLC, GIL.
Read Answer Asked by Michael on April 14, 2020
Q: Any concerns on the departing CEO Andrew Clark selling >$4 million worth of shares in the last few days when the share price has taken such a hit? Especially since he stated in the press release containing his departure news that he 'looks forward to participating in its continued success as a shareholder'. Was there a rule that he needed to maintain 'x' amount of $ in the company via common shares and now he is allowed to sell to reduce his position? Any comments you have would be great.

Thanks
Read Answer Asked by Ken on April 06, 2020
Q: HI, thank you for replying "yes" to all. Can you kindly address the second part of the question and rank your favorites to buy today on valuation for long term holds 1 - 4? Thanks.

Q: 1) would you take a half position in PLC today?
2) would you take a half position in SIA today?
3) would you take a half position in WELL today?
4) Would you take a half position in ENGH today?
Read Answer Asked by Jordan on April 01, 2020
Q: 1) would you take a half position in PLC today?
2) would you take a half position in SIA today?
3) would you take a half position in WELL today?
4) Would you take a half position in ENGH today?

If you could just rank your "yes'". No details needed. I am young, have a long term time horizon, don't mind risk, and can add on further market weekness. Thanks.
Read Answer Asked by Jordan on April 01, 2020
Q: Given the current environment, which do you foresee having a good recovery from today's lows. How would you rank these companies listed to purchase today to deploy some cash. Which would you rank this list for risk from high to low. (not considering sector allocation.
Do you have any other recommendations outside of this list that you think might have more potential?
Read Answer Asked by Gigi on March 30, 2020
Q: Hello 5i,
As a pensioner who requires dividends for my income, I have been looking at the above names to potentially add over the next year or so. It is my belief (uneducated guess) that it might take that long before we see any solid bottom and subsequent recovery begin.
In that vein, out of the above, how would you rank these based on the following:
1. Safety of company through a one year to 16 month recession.
2. Safety of the dividend through this same period.
3. Confidence in management team
4. Sector vulnerability
5. Value at current levels
6. Any other considerations, warnings or caveats for any of these ??
i.e. some of these have a decent 5i rating (B or higher), but the rating dates back to 2019, some as early as the summer.
And, finally, are there any suggestions you might have that are not on this list that deserve serious consideration in place of any of the above?
I am in no rush for an answer so take as long as you need to consider this question and deduct as many credits as you see fit - I should have enough to cover it. I hope that this question might also prove beneficial to other 5i members who rely on dividends for income.
All the best to everyone in this very trying and uncertain time!!! Be safe above all!!
Thanks to all at 5i!!
Cheers,
Mike
Read Answer Asked by Mike on March 23, 2020
Q: Hello
I hold both stocks and liked them so far. I am considering back some more stocks with both stocks currently down with this market volatility.
With the corona virus fear and probably a recession, how do you see both companies outlook based on their overall earnings and management.
Do you still consider PKI as a good growth stock?
Do you suggest waiting for more downturn before buying them ?
Thank you
Read Answer Asked by Kristelle on March 09, 2020
Q: I was surprised to see Park Lawn go down over 5 percent today on the announcement of the ceo's departure. When i looked into it a little closer, i saw that Mr. Clark had taken a small company worth 30 million to one evaluated at over 900 million in just seven years. I see Mr. Paul Smith is filling in as chairman while they search for a new ceo. Is it odd that in that time they did not hire someone and groome them for the post? I can see the importance of leadership! Should we be worried with this transition?
Read Answer Asked by joseph on February 18, 2020
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