Q: I have a fairly balanced portfolio and $20,000 cash in my one of my RRIF accounts. It is invested in TD8150 and currently paying 4.6% interest.
I also hold some shares of ENB in the same account and noticed that the dividend is now ~7.8%
What is your opinion of using the cash to buy ENB... better dividend and opportunity for some capital gain..!
I also hold some shares of ENB in the same account and noticed that the dividend is now ~7.8%
What is your opinion of using the cash to buy ENB... better dividend and opportunity for some capital gain..!
5i Research Answer:
We can't get personal, and of course an investment savings account is very different than a stock so there is not really a good comparison here. There are also tax differences in how interest/dividend is taxed. We do think ENB is 'fine' overall. Its business is largely stable and it has a good record of increasing its dividend. But it has debt, is sensitive to rates, and of course anything carbon-related is not so popular these days. The stock is down 15% this year, so an investor needs to be comfortable with equity vs cash exposure here to make a switch. For an income stock, we think ENB is fine. It is just not risk-free.