Investment Q&A

Q: Thank you 5i for your excellent service!!!

I have divided up my portfolio into thirds.
One third is a diverse group of ETFs.
One third is cash and a group fluid group of stocks made up primarily from stocks you recommend. SJ, CCL, SIS, KXS... etc.
One third is made up of the seven stocks listed above. Do you have any concerns about any of these being a long term hold. I know Magna is cyclical but is that a concern?
Cheers,
Bryan

Q: Peter

I am working with a friend to restructure her portfolio It is criminal that the broker of a large bank investment division put all her accounts in high fee mutual funds The TFSA had 89 % in one mutual fund

My question is what is your opinion on holding short term ETF bond funds as opposed to holding interest sensitive stocks I do not see any reason to be in a bond fund

Could you recommend half a dozen Canadian stocks that would serve aws bond proxies

Could you also recommend some of the new rate reset preferreds with a floor on the rate reset

Thanks for your response and great service

Paul

Q: 9:53 AM 6/29/2016

Hello Peter:

Today you made this distinction between "Safe" and "Secure" dividends in your answer to Grant asking about Superior Plus : "We would consider the dividend 'secure'. 'Safe' is a different category completely".

1. I am looking to concentrate on companies whose dividends you consider to be in the "safe" category, and which yield over 3.5% as these should/must be at least the main core of any pensioner's holdings for reliable income. This can be confusing to sort out since I presume that you will not consider all banks, utilities, telcos, REITS, Pipelines, etc. qualify as "safe".

2. So if you could sort out a short list of the few that qualify for the "Safe Dividend" category it would be most appreciated. I do understand that disasters do occasionally happen, and any company no matter how safe can get into trouble.

2. This brings up the problem of portfolio concentration caused by owning only a few names or sectors. Is it better or "ok" to just own a portfolio of only "Safe" dividend stocks, or are we advised to dilute the quality of our portfolios and own some less safe dividend stocks to supposedly "diversify" risk? This harks back to the people whose portfolio consists of only the big five Canadian Banks and who have done brilliantly for the past 50 years!

Your considered opinion on this issue will be most appreciated........ Paul K.

Q: Hi guys, I'm wanting to start a position in pipelines, which of the three do you favor for growth.

Thanks as always
Rob

Q: Can you please discuss and rank these pipelines for a 3+ year hold from a growth perspective?

thanks

Q: I would like to add a pipeline to my portfolio. Which one (or two) would you recommend.

Ray

Q: Hello 5i Team,
Utilities and pipeline companies are counted as 'blue chips' in many retirees' portfolio due to 'safe' dividends and some growth opportunities.
With the current thesis of the decline of fossil fuel in the context of low carbon future, what are your thoughts on these companies? Would there be a change of guards with these industries being replaced by renewable energy and clean tech energy in the next decade?
I have the following names which I am concerned about where they will stand few years from now? Which are the weaker ones that I should sell?
PPL, KEY, AQN, TRP, FTS, ENB.
Are there Cdn or US companies that you can suggest as future 'blue chip' in the renewable energy and clean tech energy industries? I already owned BEP.UN. Thanks.

Q: If purchased in US $ on a US exchange, do these companies pay their dividends in US$ Take as many credits as necessary.

Q: What is your opinion of the new TRP preferred series 13 for part of an income portfolio.

TRP.PR.J

Many Thanks

Paul

Q: Any reason you know of why TRP is rising ( up 10% last few days) while ENB is dropping. I own TRP, is now a time to sell TRP and buy another pipeline such as ENB?

Q: I am a retired, conservative dividend-income investor looking to add to the stocks I hold in the telecom-pipeline-utility sector. My current holdings are ALA, AQN, BCE and those contained within ZLB.

The candidates include ENB, FTS, IPL, KEY, PPL, TRP. I then filtered these down by using the following criteria = Beta < 1.0, Dividend yield > 5.0%, P/CF < 10.0, P/BV < 2.0. The result is TRP.

I am looking for a blue-chip, stable, dividend-payer, dividend grower, with obviously some capital growth potential.

Do you agree with my methodology? Any other filters to use? For diversity within the sector, should I included other candidate stocks?

Thanks for your help,
Steve

Q: I am looking to both reduce both my exposure in the energy infrastructure portion of my portfolio and also materialize the capital loses. Holdings consist of ENB PPL and IPL with a total sector weight of 7.8%. Current thinking is to sell PPL and IPL purchasing either TRP of KEY with half of the proceeds. Assuming my thinging is sound would you concur with keeping ENB and which of TRP of KEY would you purchase.

Q: Looking to bolster my income names. The pipelines/util are languishing near there lows and the price targets on the names are much higher not to mention the juicy dividends. They look really good on the surface.I have modest positions in TRP,ALA,VNR. ENB, BEPand IPL are also on my watch list. VNR is the one that has held up the best. All solid companies, But are these names good value at these levels, some still trading at high teen p/e . Or do the banks offer better risk reward?

Q: Please comment on where 5i stands as a whole in regards to the needs for pipelines and on the Fed environment department giving a green light to build an LNG plant on Lelu island (Petronas). In regards to pipelines, specifically on ‘Energy East’ and ‘Trans Mountain’. There certainly is a lot of red tape with the Fed/Prov, Environmentalists, FN’s, etc; but isn’t it time Canada “became whole” on important infrastructure (ie. pipelines/LNG) issues to move our “trapped” resource to tide water/abroad? 5i has a very savvy investor base, a moderated forum would be a good thing to “open the floor” so to speak to hear all views on a variety of issues...

Thanks and regards,
Evan

Q: What is your opinion on TRP in the short term? Should I expect some Tax Loss selling before the end of the year? Jeff

Q: I currently hold ENB IPL and PPL for a total weighting of 8.4% each having a capital loss. I am considering selling IPL outright and reinvesting an other sectors. Am also considering selling either ENB of PPL replacing with TRP. Is this a reasonable strategy and witch of ENB or IPL would you sell. Thanks!!!

Q: Been thinking about making an investment in the pipeline sector. Do you have a preference between Transcanada and Pembina Pipelines?

Q: Would you recommend either selling this stock or holding it for the 4.80% dividend. Thanks, Bill

Q: Peter, while I have several energy companies in my well-diversified portfolio, as well as some utilities, the only pipeline company I own is Enbridge (1% of total portfolio). With some cash to put to work, do you think that adding a second pipeline company makes sense - or perhaps just add to Enbridge. If so, which company would you suggest (for a 'forever' hold period)? Thanks, James

Q: I have traded a number of investment-grade preferred shares (fixed-resets and floating-resets) over the past 9 - 12 months, and have generally done quite well despite the BoC rate cut in January. One major exception however has been the ENB preferreds, where I have lost quite a bit of money.

When ENB announced their plans to drop down assets into Enbridge Income Fund and US entities, the credit agencies put ENB on negative review, leading to a big drop in ENB.PR prices (they trade now like Pf-3(high)/Pf-3 rated prefs).

This is very disheartening: I buy investment grade prefs in order to avoid such non-interest-rate-related losses.
In your view, what is the danger that other "utilities", such as TRP, FTS, etc., might also institute similar changes to their capital structure (and hence credit ratings), leading to precipitous drops in their pref shares?

Thanks!