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Investment Q&A

Not investment advice or solicitation to buy/sell securities. Do your own due diligence and/or consult an advisor.

Q: hello 5i team

At the end of Sept you mentioned EMA looked better than Fortis offering a better yield plus, it was cheaper... price at the time $35.10.

Today I read an article about EMA being heralded along side of Enbridge as two of the better utility stocks that offer a good yield and realistic equity growth opportunity. Plus, it looks like EMA has established (according to the author) an annual dividend growth target of 6% for the next 5 years.

Right now I have a portfolio position of 4.6% in ENB and this is my only utility.

At the current price ($37.40) what is your opinion (sell/buy/hold) on EMA and do you still consider it "cheap" based on current metrics.

As always, thank you so much for all you do... am sure i would be much poorer without you.

Gord
Read Answer Asked by Gord on November 12, 2014
Q: 12:29 PM 10/6/2014
Hello Peter
I am principally interested in stable low risk higher-yielding stocks for my income portfolio as I depend on the income. I am thinking about taking a small position in one of the smaller higher-yielding Renewable Energy Utilities and am considering Capstone Infrastructure [CSE], Transalta Renewables [RNW], Northland Power [NPI], and Innergex Renewable [INE].

I see you rate both Capstone and Northland as C+, However the other two are unrated. Could you please give provisional ratings for RNW, INE, ENF, EMA, and TA.

I already own large positions [2% to 5% in each, totalling 28% of my portfolio] in these "Utilities" : BIP.UN, BEP.UN, PKI, ENB, ENF, EMA, FTS, PPL, and TRP. Is 28% getting too big? The rest of the portfolio is well diversified in Banks, Gold, Consumer, Infotech, Telecom, Industrials, and Oil stocks.

So my question is should I be "reaching" for yield by buying one of the 4 small renewables which may be much higher risk or should I be content with a somewhat lower yield and just add to one of the strong companies I already own?
Just what would you recommend [large cap or small cap], which one, and why?
Many thanks...... Paul K
Read Answer Asked by Paul on October 07, 2014
Q: Hello Peter and Team,
I need to consolidate my Utilities weighting in an otherwise diversified income portfolio. I need to keep 3 of the four listed, proceeds of the sale being re-invested into the residual holdings. Please rate these four against each other in terms of consideration of my preference for valuation and growth potential over an extended time frame of 5 years As always I appreciate your thoughts on this. Rick.
Read Answer Asked by Rick on September 30, 2014
Q: I have decent gains in Emera (EMA) after buying in the fall. The dividend yield is now getting towards my lower range for a non-growth type company. Would it make any sense to swap EMA for Brookfield Renewable (BEP.UN). This would give me a 1%+ bump in yield but stay within the industry. Which company has the better blend of growth/dividend increase potential going forward? Is the relatively high P/E ratio at Brookfield a concern?

Thank-you
Read Answer Asked by grant on April 16, 2014
Q: Hi 5i Team,
I've read your previous comments on EMA regarding the stability of the company and the safety of the dividend. I noticed the stock did not react favourably (or react at all) to EMA's announcement of their purchase of 3 New England power plants from Capitol Power. What is your take on this purchase, and what will it do for EMA's bottom line?
Read Answer Asked by Brian on September 06, 2013
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