Investment Q&A

Q: I have POW in my TFSA and though it lacks any growth the dividend yield is ok. Wondering if I should think about a switch to IFC to get a bit more growth, though that will reduce the dividend.

(I am recently retired; no DB plan but hopefully more than sufficient assets to see me through to a ripe old age.)

Q: Hello 5i,
I just sold POW to take a small profit as it always seemed that as soon as it stuck its head out of the sand it burped and slid back down. Now it appears that POW is on an increase due to sector advance. Is this sector advance strong enough to jump back in to POW now or wait until POW crawls back into the sand? The funds are sitting in Oaken savings at 2.3%.
Thank you for the great service,
Stanley

Q: POW seems to have awoken from its slumber. Your comments on its recent rise in share price, please. Thank you.

Q: Your thoughts on Power Corp for income and growth.

Q: My wife and I own POW and PWF respectively in our taxable accounts, both purchased earlier this year. There was an article in the Globe & Mail a couple of days ago about shareholder dissatisfaction with corporate governance, specifically referring to members of the Desmarais family.

https://www.theglobeandmail.com/business/article-power-corp-faces-shareholder-dissatisfaction-with-company-governance/

Any thoughts on this article? I get the feeling that this is not a new issue. Thanks.

Q: I am a bit light on Financial companies; 12% of my portfolio I want to go up to 15%. I own TD, BNS, SLF and GSY in about equal amounts. Do you have any suggestions to add another financial company. I am retired and do not want to add a high risk company.

Q: The various parts of the Power Financial conglomerate are coming back to life after languishing since 2008. Which companies would be the best choice for a buy and hold strategy lasting at least 2-3 years? Thank you.

Walter

Q: Hi Peter:
Sorry to beleaguer questions on this one. With POW trading around $32 today, what do you think are the probabilities that it can sustain this level after the Dutch auction is over? Will the 11% purchase of shares (if successful) make that much of a difference going forward?
Thank you.

Q: is it possible that the price received will be trated almost all in dividend? (less than 1$ in capital). Not really good in a taxable account.
thanks

Q: These companies are all now the subject of an active open Dutch Auction / share buyback offer to purchase for cash. I am interested in your thoughts on the merits of entering these auctions, and if entered at what price point (the offers are between $29 - $35 depending on the company). The shares have all risen with the release of the offer. Will they fall back after the offer closes? What is the longer term outlook for these companies?

Q: Can you explain the 2.75 % rise in this stock on Mar 21? Quarterly results don't seem that impressive. Is it another reaction to the share buyback ? Thanks, Joe

Q: Do you think what is going on at Power Corporation is to set themselves up to spin off some of their assets? Why would they want to buy our shares. There must be something brewing.

Q: Hi 5i and Peter:
POW has announced a Dutch Auction for some shares.
Would your answer be the same for POW as your answer on a Dutch Auction question regarding BPY.UN on February 22nd?
Your answer - "Companies do these when the believe their stock is undervalued, and want to cancel a block of shares at the same time, as opposed to doing a normal course issuer bid (which does not have to be completed). Generally, we are of the view that the company knows its own business better than investors, so almost always advise not to participate. A lower number of shares increased per share earnings and cash flow leverage down the road. In an auction, the company sets a price range. Investors tender with their price desired, or agree to tender at a clearing price. Typically, more shares are tendered, and the company pays the lowest price of the range that will fill its required amount of shares it wants to buy. Shareholders typically get pro rationed and only sell a portion of what they tender (it depends on the popularity of the offer)."
Thank you.

Q: Hello 5i,
I am down 11% in each Power Corp (POW.TO) and Power Financial (PWF.TO) I am holding each for the dividend as a value investor at 72 years with a 10 year outlook. You had suggested replacing them with BCE or something else in answer to someone else's question. Would that apply in my circumstance or should I just keep holding for dividend?
thank you
Stanley

Q: I have been a long term holder of POW and have become frustrated with the performance of the share price and dividend increases. I am interested in replacing it with ENB, BIP.UN, or IPL ? I accept that these companies are in different sectors. It seems the Demarais family cannot enhance shareholder value despite the multiple voting shares they hold. Thanks. Joe

Q: Hi there: What is the different between these 2 stocks? They have an attractive yield of around 6% , with a P/E <10, P/B < 1, and P/S < 1. Would that make this a bargain then, or is there something I overlook. Thank you.

Q: I'm wondering if (part of) my investment philosophy is wrong? I have some income stocks & ETFs in my RSP (and about to RIF), not because I necessarily need or needed the income on a current basis, but on the basis that the dividends get reinvested in a DRIP for an eventual payoff. Yet even after 5+ years, these two "safe" (?) stocks in particular are down 15 - 20% even after all reinvested dividends?! I'd hate to calculate how much they'd be down if I had taken the dividends and spent them. While they didn't suffer as much in 2018Q4 as some others, they have been a disappointment. Do I need a rethink of my philosophy? Should I continue to hold these two/three? Thanks.

Q: Good Morning,

Currently hold the following in my TFSA ($30,000): BNS, SLF, AQN, AW.UN, AD, SPB, BEP.UN, GSY, SIS, TOY, TSGI, PBH, MX.

Looking to deploy $3,000 and add one or two of the companies addressed in this question. What would be your order of preference in terms of combination of dividend and some growth. Feel free to suggest others.

Thank you.

Larry

Q: Q: As part of the financial sector of an income portfolio of a retiree would prefer POW or LB for "reliable" income with some (inflation) growth? Thanks.

Asked by David on September 10, 2018
5I RESEARCH ANSWER:
We would far prefer POW here.

Regarding the above question, I would to understand the business fundamentals for why you answered as strongly about LB vs POW.

The purpose of the question is improving my investor education / smarts.

To the naive / superficial investor; they look like stable financial sector businesses with strong track records at paying their dividends.

thanks for trying to educate me;)

Ernie

Q: POW has a 6+% dividend, is at a 6 year low and trending down. Is this a place to hang out for a year or avoid until we have a market leveling. It has been a bit of a market icon for decades but can it continue to survive in this market? Is the dividend in jeopardy?
G...