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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: Several months ago, you had a list of about ten companies (including CSU, X, KXS, CAE, BYD, ENB, ADW) that you felt had a unique opportunity to flourish under these special circumstances.
Asking the same question today, what would your updated list look like?
Read Answer Asked by Rick on August 27, 2020
Q: Given the recent corporate actions, I now own BEPC (100 shares) in addition to the BEP.UN shares (400 shares) I have owned previously. Going forward, which is the better investment to add to in my Canadian non-registered taxable account, BEP.UN or BEPC? Can you provide a brief rationale for your choice? Does it make sense to sell off the less attractive stock and add those proceeds to the more attractive position, or just carry both of them? Thanks.
Read Answer Asked by Randy on August 27, 2020
Q: Can I get your opinion and analysis of Trulieve.
Thanks.
Read Answer Asked by Christopher on August 27, 2020
Q: Hi, I have some cash sitting in non-registered account and would like to buy some stocks. both RRSP and TFSA are maxed out. Can you give me 10 names that you feel are good to have for a while ? Thank you very much.
Read Answer Asked by Yasushi on August 27, 2020
Q: Hello 5i Team
Publish as needed or as a start to a blog entry.
I performed a simplified after tax analysis of BEP.UN vs BEPC and BIP.UN vs BIPC.
Basis of Calculation
I used the 2019 distribution and related tax information from Brookfield website for BEP.UN and BIP.UN in Canadian dollars. I used the highest marginal tax bracket for Alberta for taxation rates.
BEP.UN / BIP.UN receive T-5013 tax form
BEPC / BIPC receive T-5 tax form
Results
BEP.UN you will receive 71.4% of income after tax if you assume ROC taxed each year (taxation of ROC is deferred until you sell the units and results in capital gains tax).
BIP.UN you will receive 82.1 % of income after tax if you defer ROC tax each year.
BEPC you will receive 68.3 % of income after tax.
BIP.UN you will receive 60.2 % of income after tax if you assume ROC taxed each year (taxation of ROC is deferred until you sell the units and results in capital gains tax).
BIP.UN you will receive 67.7 % of income after tax if you defer ROC tax each year.
BIPC you will receive 68.3 % of income after tax.
Going forward, BEP.UN will probably receive more foreign income (as a result of the Terraform merger) and will pay a higher overall tax rate.
BEP.UN and BIP.UN allow deferral of income tax due to Return of Capital, however this complicates an individual’s tax return when held in a taxable account.
It is difficult to truly estimate the taxes payable on BEP.UN / BIP.UN as the allocation to various tax components is not known until March of the following year. If ROC drops significantly (from 30 – 40 % of total income), the overall tax paid will increase. With BEPC/BIPC the tax percentage is known as BEPC/BIPC issue “eligible dividends” and no ROC is assumed.
All things being equal, I think it is best to hold BEP.UN / BIP.UN in a RRSP / TFSA where the slightly higher distribution yield, if re-invested in units, will result in a higher total return. In a taxable account it is probably best to hold BEPC / BIPC to avoid the headaches of tracking Return of Capital and the inclusion of a T-5013 form in an individual’s income tax form.
Each person’s results will vary as a result of province residence and marginal tax rates (13 province/territories x 5 tax brackets = 65 potential different tax rates).
Thanks
Read Answer Asked by Stephen on August 27, 2020
Q: Hi guys, what a day for Roku. Thanks for recommending that one. I currently hold roku, square, nvda, and docu. I was contemplating taking profits on a few of those winners and moving into other USA growth stocks. Can you give me your top pics at this time? I have a long term timeframe in mind. Thanks as always for your valuable advice.

Jason
Read Answer Asked by Jason on August 27, 2020
Q: Hi 5i,

For my experience, once the bank had an issue with the U.S. Department of Justice, it will become in big big trouble for the coming ten to twenty years! Please see how the HSBC:US behave, and you will understand. It has been dropped from US$91 to US$21 from the past history, and the price now is even worst than the crisis 2008.
Read Answer Asked by kwokwai on August 27, 2020
Q: good morning,

I'm reading a lot of rather breathless prose about the potential of 5G and am interested on your thoughts for the potential of this technology. The names that pop up include Apple, Qualcomm, Nokia, Siemens, Skyworks, Crown Castle ( I believe that may have been a 5i suggestion) and even ( gasp) Blackberry. What companies would you suggest are best positioned to take advantage of the projected growth, both US and Canadian. Thanks.
Read Answer Asked by alex on August 27, 2020
Q: Hello Peter, I am intrigued after reading that a Canadian can earn about $50,000 per year of dividend income without paying any income tax. I know about your income portfolio of course, but with a view to maximizing just Canadian eligible dividend income, what would you think of the following portfolio of 14 stocks. Equal weighted, the stocks would yield 5.3%. (Disregard lack of market diversification; this can be achieved in one’s registered accounts.) Also, if one wanted to pare down the list to 10, which 4 would you delete?
BCE, CM, ENB, FTS, CNQ, AQN, CPD, FSZ, MG, KBL, POW, ALA, BIPC and NTR. Thanks!
Read Answer Asked by James on August 27, 2020
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