Investment Q&A

Q: I hold the above companies (pretty much at equal weights) in my Utilities portfolio. I need to trim because I am overweight in the sector. Perhaps I should reduce the number of holdings by 1 full position. May I please have your opinion. Thank you.

Q: Hello Peter, I have full positions in FTS, BIP and EMA, and a long-held triple position in BAM. With some new money, I'm tempted by ALA for its good yield and steadiness. Do you think this is too much duplication (considering the fact that I probably already own too many individual stocks, probably 60-70 if I include my RRSP, TFSA and non-registered). Or is the excellent yield enough to justify the addition.

Q: Could you rank these companies for me EMA , FTS , H , and AQN

Q: Good afternoon:
I am underweight in pure utility equities and would like to add. My primary holding is AQN with a lesser position in EMA. Would you recommend switching EMA to FTS and then adding to that position. Or do you consider that unnecessary?
Thank you for your advice.

Q: EMA just sold its holdings in AQN (about 5% of AQN). I have holdings in both. Is this a positive or negative signal for either company? Do you know whether the purchaser(s) were institutional, mutual funds or retail investors?

Q: Comments on Emera's bought deal. Seemed like a really small discount to the previous closing price and the stock is trading below that today. $300 million dollar proceeds are going to be used for general corporate purposes. I don't generally like when companies dilute shareholders for no specific purpose. Is this to reduce debt or just to cover themselves in case their share price decreases substantially in the current environment?

Thanks,
Jason

Q: Hi 5i: I have two questions - please charge as appropriate.
(1) I have been holding CU in a dividend reinvestment account for about three years. The account focusses on stocks that provide a good dividend that is increased regularly (the usual Canadian suspects). CU has consistently underperformed the other stocks, and I'm wondering what the future holds, in particular given the changes in Alberta's approach to coal-based electricity generation.
(2) Could you give me data on dividend growth rates for EMA and BEP.UN?
Many thanks for your great advice and service.

Q: I currently hold ALA and RNW .Would like to add AQN or EMA , which would you add ? Or would you add NWC instead.Please Place in order of preference. Thanks.

Q: Hello 5i team,
I would like to purchase a utility stock (maybe 2) and was wondering what are the best for what is out there. I already have BEP.UN.

Thank You,
Andrew

Q: I want to drop one of these from my portfolio. Which do you think I should keep (if either)? I have Fortis in another portfolio.

Q: Hello 5i
Thought I would ask Investor portfolio management and psychology/behaviour question.

As I watch my profits in companies like Emera drain away 2% per day ( down $5/share since August), I wonder what the statement to investors should be when the question comes up, why did we not get out seeing clearly this stock is in a down trend and with rates moving up, is going to be out of favour and see price declines?

Waiting for an annual dividend of $2 when in four months $5 of capital disappears, just does not make good math sense or a profitable stance.

In September this was a good investment. What are your thoughts on this today with debt high, rates moving and short sellers pointing at companies like this?

Should we not have been selling at $50 instead of holding at $45.....and watch the price tick lower?

As you can imagine, it is tough watching long term paper profits in REITs, Telcos and utilities drain away.

Would you please offer your thoughts on the emotions that arise in this situation and with the stated company and sectors?

Thanks
Dave

Q: I have a small position in Emera. No other exposure to utilities. Just went over their Q3 earnings release. Negative current ratio, $14 billion dollars in debt, rising 10 yr bond yield, some free cash flow, but not sufficient to pay down the debt rapidly and net debt to total capitalization of close to 70%. Aside from the yield, I don't see many positives. Should I sell and move the funds into a more cyclical name?

Thanks,
Jason

Q: Hi Peter, Ryan, and team,

In a recent BNN "Top Picks", Daniel Lloyd recommended shorting EMA because of their high debt. He states: "Emera, having recently purchased TECO, is now saddled with $14.7 billion in debt which represents a roughly 13x debt/cash flow ratio on a stock that trades an excessive 18x earnings multiple." Not that I'm contemplating shorting EMA, but looking at a gain of 21%, would you recommend staying the course with EMA, or switching to something like FTS which you seem to like more? Or, assuming appropriate balance among the sectors, would you recommend something else entirely? EMA is presently held in a TFSA, along with CAR.UN, DHX.B, KXS, GUD, PBH, and SIS. All except DHX.B are up, and SIS is up 108%. :) Thank you for your terrific recommendations and on-going advice and insight.

Q: Hi Peter,
Reits, Telecoms and Utilities have not been participating in the market rallies for a while now. Just wondering when you think that the yields on these types of stocks will start to hold up the stock prices. (a few of mine are starting to get come nice yields on them now.

Thank you,
Charlie

Q: Hi,
You seem to favour FTS over EMA in your answers to member questions - I am wondering why. The P/E for EMA is lower (14 vs 20) and the dividend is higher (4.6 vs 3.9%). Would you please explain your preference? Have you any plans to do reports on these stocks?
Thanks!

Q: Planning to add 2 of the suggested utilities to a growth portfolio or alternates that you might suggest & the rationale. Thank you.

Q: good morning:
just wondering if you would classify bep.un, bip.un , ala,
Enbridge in the same sector as emera.
I own all these stocks but am looking at emera.
the rest make up about 15% of my portfolio.
thanks

Q: What is happening with Emera? I have made good profit, but is it time to sell?
Margita

Q: Peter - would be great to hear about your thoughts on emera. As the FED looks to move over the next few months where could this take the emera stock price. I've had some reasonable gains and wonder if I should take profit and run. thx Steve

Q: I have zero exposure to utilities at the present time. I believe that you advocate having exposure to all sectors of the market because you never can know for certain what the market will do. While most people expect interest rates to rise and utilities to under perform, the same could have been said in 2013. Which is your favourite utility and which utility offers the best dividend growth to potentially offset future interest rate increases. I am looking for low volatility, good dividend yield and good dividend growth.

Thank you,
Jason