Investment Q&A

Q: On Apr. 1 I sold ENB and PKI for tax-loss purposes and bought, at your suggestion PPL and SPB respectively as proxies. Since then PPL has appreciated 16% vs ENB 5% and PKI is up 20% vs SPB 15%. So thank you very much for those suggestions!
My question is what to do at the end of the month when I can repurchase the original holdings, now that l have a cap gains on both of my "new" purchases (maybe $2,000 total). (I know this is a nice "problem" to have!)
My preference is to buy back PKI because I think it is a better overall company for the long term and less of a commodity type holding. (concur?) My bigger question, I think, is PPL vs ENB. I am a long term investor and while you seem to favour ENB somewhat over PPL you also seem to suggest that PPL has been more oversold than ENB. I'm not one to usually wait and guess for a future price but I am wondering if in this case, I should hold PPL as it may appreciate faster or sell after the 30 day holding period expires regardless because, in the long run, you feel ENB will come out ahead.

Appreciate your insight.

Paul F.

Q: I owned PPL for a few years, and with the sell down of late, I'm interested in adding to my position.

However I'd like your view on: 1. does PPL have sufficient cash flow to maintain the current dividend payout? 2. what about the counter party risk that drove down the share price, how real/or likely is it, or is it just the usual market panic?

Thank you for your insight.

Q: I own ENB and PPL. PPL was purchased for stability and safety of the dividend. The position is now way down. Would you recommend selling PPL and replacing it with TRP? Or is PPL seriously mispriced at this point and better to sit tight and wait for recovery?

Q: I would like to add a mix of income stocks to my portfolio (for a 5-10yr hold) which has been primarily growth oriented and comprised of a number of 5i’s BE Model Portfolio names.
a) Could you please rank the above listed stocks for dividends with preference for long term yoield of at least 4-5%, and growth back to YTD highs over the next year or two. Moderate to high risk is okay.
b) List any particular concerns you see with any of them.
c) Your suggestions for 1-2 better names in the current market to represent sectors such as utilities, financials, Telecoms, Reits, and ndustrials would be much appreciated.
Thanks for your wisdom and guidance over these unprecedented times.

Q: ENB vs PPL.....which would you prefer for a 3 - 5 year hold? Or half a position in each? Are the dividends safe? I'm looking for the dividend plus modest share price appreciation. Any other recommendations in this space?
Thanks for your help.

Q: I am retired and have both a cash and RIF account. In my cash account are the big 5 Banks, T & BCE, FRU & IPL. I see that IPL has cut the dividend & FRU has a "1,437% Pay out Ratio (PoR)!! I have mostly REITs in my RIF & EXE & CHE.
I'm not concerned re the banks or telecoms but the PoR of FRU, CHE & EXE are of concern to me. I also feel that in the longer term, the REITs will survive especially with interest rates so low. Also, to replace IPL would you consider PPL
Your thoughts please.

Q: Hello 5i team. Is this company a buy? Stock just plummeted from an all time high to an all time low in the space of a month. Yes, I know the sector is suffering big time, but Warren Buffet's words keep ringing in my head: “Be fearful when others are greedy and greedy when others are fearful." I just don't see this longstanding energy stalwart fading away, much less fossil fuels (eco crazies be damned). Your views would be greatly appreciated. Thanks as always for your knowledge and analysis. - Asher

Q: Have Key or Ppl ever reduced their dividends?
What do you think the odds are from 1 to 10 of OPEC agreeing to reduce supply by their next meeting this June ?

Q: Hi 5i Team,

What are the payout ratio on ENB and PPL? Are the dividend safe?

Q: So with the pipeline companies yielding between 8 and 20% and factoring in a 50% dividend cut, they would still have a nice yield. I suspect that some might increase, or at least slow price decline if cut.
Please list these companies in order of balance sheet strength and debt % and coverage, and order of preference. Thanks

Q: Hi 5i Research Team:

I have traded Forex before and am new to stock trading. 90% of my RRSP, RESP and TFSA is in cash and I'd like to avail the current market conditions by "gradually" buying the dips.. and holding it over the long term, 5 to 10 years. I understand that no one can time the market or its bottom.

After exploring the reports and questions on your site, I have identified the enclosed 29 stocks based on following criteria:
- Current Retracements of > 75% over 52 week high & low
- Dividend Yield > 5% (in some cases, like WEED, which is a bit risky, I understand there's no dividend in the near term.. and I am simply going for the upside swing over the next 2 years... same for CRON and Air Canada)

Considering my 90% cash position and strategy to partially buy in on dips over the next few weeks, can you please advise if my stock selection is sound. In addition to my stock picks, please advise anything else that I should keep in mind.

Thanks for everything you do. Much appreciate.

Q: Pipelines Enb,PPL,TC,GEI,KEY are the dividends sustainable and how would you rank same ?

Q: just wondering your thoughts on the pipelines right now. are the dividends safe at such high yields. would you be a buyer? also i have held EIF for a long time. is divy safe and would you purchase more?

Q: Pembina seems to have taken a much bigger hit than Enbridge. Why?

Q: Which is a better buy for L.T. hold PPL.PR.A. or PPL.PR.E assuming they are not redeemed at the call date ?
ECN.PR.A-OK for Income for the next 5 years?
Happy St.Patrick's Day
Cec

Q: Are there any companies out there now with an 8% or higher dividend that you would suggest for a long term hold? I say 8, bc it hasn’t been overly hard to find 4-5 before this carnage. I picked up ENB already, and I’m ok if the short/med term div is cut and the price falls further. I’m really looking for stocks that will likely pay a high stable dividend into the future (based on current prices) after things return to normal. No preference on sector.

Q: Canadian pipelines have suffered along with most of the market during this correction. My understanding is that they are protected by take or pay contracts with the producers. In other words you either take the capacity you agreed to or pay for it. The obvious concern here is that the producers opt to do neither, not having the money and facing bankruptcy. My first question is whether this is even true to any extent. Secondly, what would the response of the pipelines likely be? Do they ultimately become owners of non-producing oilfields?

Secondly my understanding is that shipping by pipeline is cheaper than shipping by rail. Given this scenario the remaining product should shift over time from the rail lines to the pipelines, keeping the pipelines full. The loser becomes the rail lines. Do you consider this to be true?

Q: These companies are trading at close to 10% yield. The share price is back to where they were ten years ago and the dividends have since doubled. Are these companies not the buy of a generation right now? In my life I will likely never see these valuations again. Or I missing something huge??

Q: Both of these stocks are getting hammered - yesterday and today. Is the market concerned about counterparty risk here? If so, which company is more exposed to customer default?

Q: In response to questions regarding pipeline companies, you stated that they depended on volumes rather than price but that if E&P companies shut in production or go bankrupt, volumes could suffer. Do you really think that Canada may have excess pipeline capacity?