Q: US .42 quarterly dividend = ~ Cdn 10% yield right?
resets in 2028 I think
How can you go wrong with a 10% yield?
Is the dividend tax credit applicable in a cash account
Are there any tax implications in a tfsa
What are the cons of this investment?
Thank you so much
resets in 2028 I think
How can you go wrong with a 10% yield?
Is the dividend tax credit applicable in a cash account
Are there any tax implications in a tfsa
What are the cons of this investment?
Thank you so much
5i Research Answer:
This preferred had the good-timing benefit of being re-set in 2023, after interest rate rose (it resets again Sept 2028). Yes, the yield is just under 10% now. ENB is Canadian and the full tax credit applies. There are no tax issues in a TFSA even with a US dollar dividend. We would see it as attractive for income. Note, preferreds will move primarily with rates. We would not expect much capital appreciation here. It is not risk-free, as in a high inflation environment the stock could still decline, perhaps a lot. Preferreds can go in and out of favour. The preferred hit a low of $18.30 in 2023.