Investment Q&A

Q: Re Jason question March 22 regarding metrics for downside support for telcos, utilities and reits. . What cos would you recommend which meet a sufficient number of the metrics? Thanks

Q: With the drop of share price I have less than a full position in these stocks. I can top-off only two, which would you choose and why? Thanks!

Q: Gentlemen,
Another comment on ENB & ATD.b
NBF has a strong buy on ATD.b (the stock is a darling by most analysts).
EBN has 5 stars by MS and many analysts on BNN recommended it.
Disclosure, I have both manes on my PF
No one has a Crystal ball !!
BR

Q: Hi,
Lets say Enbridge does what a few analysts are thinking and drops from its current 40ish to 33ish. Does this really have an effect on anything besides presenting a great long term buying opportunity? If dividends are covered by cash flow, and cash flow is under contract, does a lower share price change anything besides market cap? What other consequences do you forsee there? Im thinking about buying in now (I have many years to sit on it, so short term drops dont bother me), then watching it and averaging down if the opportunity presents itself. Since dividends are covered almost 3 to 1 by cash flow, even if the share price drops to 33, could they still not afford to continue raising the dividend to encourage more buying and therefore help re raise the share price? Maybe Im oversimplifying this, thanks.

Q: This is not a question, it is a statement!
As one of your members states ENB is in free fall ! Very reputable Advisers stated as I mentioned that ENB will drop to 33 plus dollars ! But you keep defending this Company for its dividend! The stock has dropped from 58 dollars to 38 dollars now while you maintained a buy rating! How many years of dividends you have to receive to make up for the capital loss if you own 1000 shares at 58 ?
I think that a moving stop at a 5% loss from a new height is a much better choice at the prevailing energy markets!!!

Q: This article claims impact on ENB:
http://business.financialpost.com/commodities/energy/pipeline-selloff-deepens-as-dbrs-warns-enbridge-subsidiarys-credit-rating-could-significantly-weaken

Your comment please

Q: Clearly the stock is in the doghouse and is getting no love whatsoever. Reading the Q&A's I keep reading that the dividend is covered by cash flow. There is no disputing that fact when looking at the cash flow statement. But the dividend pales in comparison to the other huge use of cash which is capital projects. What do you think it's going to take to turn the share price around? The market does not like something regardless of all the handholding and reassuring management has done. Maybe the company needs to come out and say they are stopping all future dividend increases (it yields well over 6% now) and that cash will go directly to pay down debt. Do you think that would be a catalyst to stop the freefall?

Q: Hello 5i team,
I hold 3 stocks in the energy sector: ENB since 2012, KEY since 2010 and PKI since 2006.
With an average total return of 5% per year (which basically equals the yield) ENB is, by far, the worst performer.
That begs the question: granted ENB is a good company, but it does not seem to be a good stock to own.
Thank you,
Antoine

Q: ENB is yielding close to 6.5%. I have been hearing about an MLP announcement and it's lack of material impact on the company.
Is the dividend of 2.68 on EPS of 1.65 sustainable (even taking in to account significant amortization of infrastructure)?

Q: How much debt does Enbridge have? If interest rates go up 1% in the next 12 months what is the additional cost to them and how does this impact free cash flow? Thank you as always.

Q: Reading the answers given to inquiries on ENB, would it not be prudent to counsel some patience until fact gathering step can be performed before attempting to respond? As more information comes available, it is becoming clear that the impact may not be that significant and that it may trigger a number of regulatory rate reviews that could diminish the impact of the announcement yesterday. It is also clear that only gas and not oil pipelines are at this time impacted. Seems to me that some value should be attached to the quality of management to cope with regulatory pronouncements in such instances. The quest by members for immediate opinions may not assist in making wise investment decisions.

Q: Other than ENB. what other Canadian stocks could be effected by the MLP ruling and to what degree. also if and when would this come into effect.

Q: With re balancing in my cash account I have a capital gain of $25,000 in 2018. If I were to sell my CGX, ENB and GUD I would have a loss of $14,000. My thinking is that this loss would offset the capital gains.

I intend to re buy these 3 stocks after the 30 day period,

Does this make sense?

Thank you

Sincerely

Mike

Q: One of the BNN guest mentioned that his calculation shows that ENB could drop to 33.84 where it would be a buy. For now he staying away from this stock! Also this morning another advisor strongly suggested to stay away from ENB !
Could I have your opinion please.

Q: If you had to pick one out of those two stocks for 1 to 2 year outlook, which one would you pick? I realized that ENB is more of a utility and more interest rate sensitive, but still is related to the oil industry. Both stocks have been beaten down, but wandering which one in your opinion would have more upside if oil starts moving up? Thanks for the great service.

Q: Please let us know what you find out about ENB as far as it being involved with master limited partnerships. My quick search tells me Enbridge is a normal corporation rather than an MLP. Enbridge Energy Partners, EEP, is an MLP. My information concerns the U.S. stocks. I don't know if there would be different considerations for Canadian shares of ENB. Thank you for your ongoing information, education, and guidance.

Q: Rates dropping by 5-9% is going to make ENB's debt worse, of course. Is that getting to be a worry? When does it come into effect? Thank you.

Q: OK so if the ruling is enforced what is the implication for ENB?

Q: Good morning. Looking to add a few stocks (services, financial, utilities) for 5+yr hold with growth and income. EFN, AD & ENB are my front runners, respectively. Could you suggest one other alternative to each of those three that you would recommend? especially interested in your opinion on EFN today with their earnings news. And what is EFN payout ratio? great service thx. I am 35 years of age with higher-risk tolerance.

Q: Never mind my question as I have the reason for the decline:
FERC Revises Polices, Will Disallow Income Tax Allowance Cost Recovery in MLP Pipeline Rates

The Federal Energy Regulatory Commission (FERC) today responded to a federal court remand by stating it no longer will allow master limited partnership (MLP) interstate natural gas and oil pipelines to recover an income tax allowance in cost of service rates.

The U.S. Court of Appeals for the District of Columbia Circuit in United Airlines, Inc. v. FERC, (827 F.3d 122 (D.C. Cir. 2016) held that FERC failed to demonstrate there was no double recovery of income tax costs when permitting SFPP, L.P., an MLP, to recover both an income tax allowance and a return on equity determined by the discounted cash flow methodology.

The Commission today acted in response both to the court remand and comments filed in response to an inquiry issued after the court ruling. FERC will now revise its 2005 Policy Statement for Recovery of Income Tax Costs so that it no longer will allow MLPs to recover an income tax allowance in the cost of service.

The revised policy statement explains that, while all partnerships seeking to recover an income tax allowance will need to address the double-recovery concern, the application of the United Airlines court case to non-MLP partnerships will be addressed as those issues arise in subsequent proceedings.