Investment Q&A

Q: I am planning to sell my shares in CNR. I have done well holding it for several years but there just appears to be opportunities for better price appreciating than CNR has over the past couple of years. I would prefer to replace it with a Canadian company. It does not need to be an Industrial. I am currently over weight financials. I am ok with some risk. What companies would you consider as a replacement?

Thanks for all your help,

Mike

Q: I’m under water with Bce by about 30%
But under no pressure to sell
Do you still like it for 5 to 10 year hold our
Is it time to cut my losses

Q: rating

Q: I am at a loss in BCE, therefore I plan to sell it and use it for tax loss purposes, then in 30 days rebuy it and now I have a juicy dividend and if the stock remains flat, I'm okay with this and get paid while I wait. Comments on this strategy, please.

Q: Given this morning's announcement and stock reactions, would you consider switching from BCE to either Telus or Rogers?

Q: I am an income investor. I try and purchase equities who raise their dividend by approximately at least the rate of inflation. I hold both BCE and Telus. Given the announcement today by BCE that they will not be raising their dividend in 2025, what are your thoughts on selling Telus and purchasing BCE simply due to the spread in their yields in order to pick up the higher BCE dividend as sort of a proxy to make up for the lack of an expected increase?

Q: Hello,

It seems that BCE is taking a page out of the BNS book by purchasing a US asset and freezing their dividend.

In the case of BNS they enhanced their credibility, in my mind, and I bought more and it is up substantially - thank you.

In the BCE case, this stunt has undermined my faith in their judgement towards dividend holders.

How does any co., let alone a highly indebted co., operating in a very competitive environment sustain a 10% dividend?

They are in the doghouse now - if they bite the bullet and cut the dividend in half they save $2B p.a. to pay towards debt reduction.

I can't see any reason why not at this point.

Q: By my calculations, OTEX is trading at 8X forward earnings and 10% FCF yield. At current price it has a 3.5% dividend yield. According to TD Cowen's analysis the stock could see a 33% return over the next 12 months if it meets the low end of its forecast. So why are all the buy side analysts downgrading the stock or maintaining their hold rating? Isn’t it time to buy when there's blood on the street and you feel sick in your stomach? Has anything changed in its business fundamentals?

Q: I tend to be a dividend growth type and depending on a businesses dependability, dividend income orientated Is BCE a hold or would it be time to move on? I find it crazy that they have made such a big purchase without giving the market some notice.

Q: Given the news today and the share drop, would you be a buyer of Bell today?

Q: Would you buy sell or hold McCormick & Co?

Q: what do you make of bce stating that it will not raise its dividend in 2025 but goes and buys a company for 5 billion dollars instead of working on debt repayment.
do you think this is a good idea?

Q: Could you please comment on the results for Q3?

Q: I own both of these and have a similar loss in each. Want to reduce amount of telcos. Which would you sell for a loss, or would you reduce both by half. Which would you keep for the longer term or some of both. Retired. Like the income but want some growth. I'm OK to hold for longer term.
Thank you.

Q: Question:
When analyzing Total return performance of VDY, RCD, XDIV over the long term. What % is due to price appreciation and what % is due to dividends?
These are ETF's focused on Canadian Dividend Income.

Previous Answer for XIU:

Over the last ten years, XIU’s total return CAGR is around 8.9%, with price appreciation and dividends accounting for 5.8% and 3.1%, respectively.

Over the last five years, XIU’s total return CAGR is around 11.7%, with price appreciation and dividends accounting for 8.3% and 3.4%, respectively.

Q: With the drop in share price last month or so of 20 percent would you invest in it or is it a value trap?

Q: Thought on recent results? Looking to add to my position.

Q: Good morning. This isn't so much a question as it is to follow up on my question yesterday relating to the tax treatment of 1:1 exchange of share of units of AW.UN to AW.TO for the benefit of other 5i members. My original question, 5i's answer and the answer I received subsequently from AW Investor relations appears below.

Question: My AW.UN shares were exchanged 1:1 for AW Newco. As this was an "exchange" should my broker be showing a capital gain? If there is indeed a capital gain what is the share price that should be used?

5i Answer: The transaction is tax-free, providing unitholders make a Section 85 Election. If new shares were received on a fully 1-for-1 basis (no cash received other than the distribution), the ACB should be the same as it was before. Brokers are inherently bad at these things. One can contact them to change it, but it is better to keep one's own records for CRA purposes.

Following 5i's Answer I reached out to both my broker who referred me to AW Investor Relations.

AW Investor Relations Answer:
"The conversion from units to shares is considered a deemed disposition at a value based on the date of settlement, which varied broker to broker. We have been advised that in the context of the acquisition and disposition of listed securities, the CRA has traditionally taken the position that the acquisition/disposition date for tax purposes is the date of settlement since it is only at that time that taxpayers have the use of the property received (i.e. A&W shares) in consideration for the property they disposed of (i.e., the Fund's units). We are recommending that shareholders with concerns that the delay in settlement caused them to realize a capital gain (on the disposition of their units) that was larger than it would have been had the transaction settled more quickly should consult with their tax advisors as to whether they can reasonably take a different position."

Following AW's response, I sold out of our position in AW "Newco" today for a tax loss at $37.36 to reduce our Capital Gain on AW.UN which had reflected a settlement value of $43.08. We will either reinter in 30 days or move on.

AW's structuring of the sale was, in my opinion, very poorly executed.

Q: Income model portfolio: The list of selected stocks seems quite stable with time, are they considered among the safest choices within TSX , or some other reason ? how to interpret the ratings ? I appreciate the choices but I wish to better understand the guidelines..

Q: 1) Which has the highest & lowest 10-yr total return potential according to 5i’s research & data?

2) What other defensive names in the US & Canada might provide similar (or better) risk-adjusted returns over 10 years, given current valuations?
Thank you.