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  5. DFN.PR.A: hello 5i [Dividend 15 Split Corp. Preferred Shares]
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Q: hello 5i:
last question on this preferred over a year ago. Can you give me an update and do you consider it buyable? Safety rating would be beneficial.
thanks
Paul L
Asked by Paul on April 18, 2024
5i Research Answer:

DFN class A shares did not declare a dividend for May, as net asset value slipped below the required level of $15.00 (it is $14.90). The dividends remain far safer than Class A shares, but there is not a lot to 'analyze' here. The corporation owns 15 of the highest yielding TSX stocks, and that's pretty much it. RY is the biggest holding at 8.6%. Considering its holdings, their dividends, and the likelihood of lower rates in Canada, we would consider the preferred shares as buyable for income investors. We generally do not like the Class A shares of split share corporations, due to the 'start/stop' nature of their dividends. But the preferreds here we think are OK. Assets are $358M. The preferreds have never missed a dividend payment. Risk we think would be at the 'B' level. It is still an all-equity portfolio, and in a stepp market decline the asset protection to the preferreds would still decline.