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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: For cash destined for a non-registered account can you suggest categories of stocks that, given their current valuations following the recent market meltdown over the past couple of weeks, you would expect to have the best total returns over the next three years or so, listed in order of expected total return?
1) 6-8 Canadian blue-chip dividend-growth stocks with at least 5 years of consecutive dividend growth (ideally 10 years) and a current dividend yield of ≥ 4.0%, good balance sheets, reasonable/minimal debt, etc. Looking for “best in class” amongst a few different sectors - ie only need one (“best”) bank, one telco, one pipeline, etc
2) 2-3 Canadian blue-chips who may not meet the above dividend yield and growth specifications but whose current valuations make them an appealing possibility
3) 2-3 more growth-oriented stocks, do not have to be traditional “blue-chip” - with or without dividends who would be expected to have the best total return possibilities over the next three years.
Would you be buying now or waiting until there are maybe a couple or three consecutive days of positive market returns and/or when the current market volatility seems to be settling down (however you would define or identify that) or buying in over a period of time? If so, over what period of time and buying at what interval/ frequency?
Thanks for your insight.
Bruce
Read Answer Asked by Bruce on March 16, 2020
Q: I'm interested in the Canadian banks due to the recent drop and the dividend yield which is very attractive. I have remained in cash for most of this crisis and am anxious to buy. However, I'm very concerned that we are in for further shocks to the economy given the fallout of this virus. How much exposure on the downside do you see to the Canadian banks' balance sheets? I know that if the market goes down, everything will move in tandem but what I'm worried about is that we are in for a high number of failed small and large businesses. Also, I've left my money in US dollars for the last number of years because I think it's a better place to have money and will be buying Canadian banks listed on the USA exchange if that makes any difference. Thank you as always for your comments.
Read Answer Asked by Jason on March 16, 2020
Q: Canadian pipelines have suffered along with most of the market during this correction. My understanding is that they are protected by take or pay contracts with the producers. In other words you either take the capacity you agreed to or pay for it. The obvious concern here is that the producers opt to do neither, not having the money and facing bankruptcy. My first question is whether this is even true to any extent. Secondly, what would the response of the pipelines likely be? Do they ultimately become owners of non-producing oilfields?

Secondly my understanding is that shipping by pipeline is cheaper than shipping by rail. Given this scenario the remaining product should shift over time from the rail lines to the pipelines, keeping the pipelines full. The loser becomes the rail lines. Do you consider this to be true?
Read Answer Asked by Larry on March 16, 2020
Q: For someone looking for income, what dividend stocks, in any sector, would you find most appealing?
Read Answer Asked by Michael on March 16, 2020
Q: Hi,
Can you list 5 stocks with 4% yield having a good balance sheets.
Thank you for your support
Read Answer Asked by Edward on March 16, 2020
Q: Hi 5I,

Looking back to 2008 the utilities sector held relative well to the meltdown of the TSX. This time around ZUT is following the TSX down. One would think people still need hydro to heat/cook.

Can you comment on why this is happening? Is there a fear these companies will become insolvent due to their balance sheets?

Thx,
Chris M.
Read Answer Asked by Christopher on March 16, 2020
Q: After the "blood in the streets" kind of day we have had today, March 12, was I "crazy" to add to my holdings of the aforementioned? Are their dividends as reliable as I perceive them to be? FYI, I am a year away from retirement at age 60 and value dividend income for a portion of my portfolio.
Read Answer Asked by David on March 16, 2020
Q: Hi, if we are in a lower for longer or forever energy pricing environment what might be the impact on the above companies? Also, do you think their dividends could conceivably be in jeopardy? Thanks.
Read Answer Asked by Gary on March 13, 2020
Q: Hi folks,looking longer term, Whitecap resources wcp/t had fairly decent Q results with Paying down $100M in debt,lowered payout ratio to 72,and there has been lots of recent insider buying at higher levels. Stock currently crushed to 1.30sh level....aside from problems/negativity of world/wti oil....does Whitecap not seem like a reasonable buy here??? thanks as always, jb
Read Answer Asked by John on March 13, 2020
Q: I'm holding the following since I thought they would be considered safe stocks, however they are going down with all the rest.

1) I made the big mistake that gold miners would actually do well in the current situation, however I know see my mistake that I should have purchased gold directly. Would you, given the situation today, sell the miners and buy gold directly - what has the past crises shown about gold versus gold miners?
2) Do you think the utilities above will stabalize near current levels, or do you see that there will be a reset in all P/E and P/C levels down to lower levels?
Read Answer Asked by Kel on March 13, 2020
Q: These companies are trading at close to 10% yield. The share price is back to where they were ten years ago and the dividends have since doubled. Are these companies not the buy of a generation right now? In my life I will likely never see these valuations again. Or I missing something huge??
Read Answer Asked by Joel on March 13, 2020
Q: Hi 5i - how do these two stocks look for a long term dividend play with some capital upside (once the market stabilizes)? Thanks, Neil
Read Answer Asked by Neil on March 13, 2020
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