Investment Q&A

Q: Hello 5i Team
I currently own ALA with a purchase price of $20.80.
I desire to sell the stock at $20.80 or greater before the end of 2019 with a preference after November 25 so I receive the December 15 dividend.
Which is the better option:
1 - Do I enter a limit order ($20.80) with an expiry date of December 27 and wait for the order to fill?
2 - Do I sell a call option (December 20, 2019) with a strike price of $21 which provides about $0.15 per share (before commission) and if the shares are not called away, then sell the shares after December 20? The option premium will further reduce my cost basis.
If I sell a call option with a strike price of $21.00, if the share price rises to $21.00 on November 25 (as an example) are the shares called away immediately or are the shares called away only if the share price on December 20 is equal to or greater than $21.00?
Thanks

Q: 7:02 AM 11/14/2019

There seems to be a lot of confusion. Which of BEP, BIP, BPY are going to be relocated to Toronto and have the 5 for 4 "Stock Split"? Any idea yet of the Ex-Dividend Dates?
Thank you......... Paul K

Q: If you had to pick one stock from the above list using the following criteria:
Capital growth, dividend growth, stability

Which one would you chose ?

Ken

Q: BEP and BIP have each grown to just over 9% of my portfolio. That’s great, but I’m in a quandary. With other stocks I might be tempted to trim and reinvest, but there seems to be momentum here and the spin out sounds interesting. What say you? Trim and reinvest? If trim, then back down to 5% each?

Then.... where to reinvest? I’m well diversified and would look for income stocks with some growth potential. Mainly, I’d want something that is a good replacement for the potential and stability of Brookfield. Perhaps a different Brookfield? Perhaps park it for the potential to pick something sold for a tax loss?

Q: Why the sudden jump in these stocks today? I must have missed something?!

Q: The payout ratio is about 100% of AFFO. What is your view as to the sustainability of the distribution including guidance for increases? Is this level of payout consistent with peers?

Q: Chesswood reported last evening and I would appreciate your feedback on their earnings trend. The dividend (7.77%) and cashflow seem OK. Any concerns? Are there alternatives you would consider?

Thank you

Q: What is your opinion of Corby's Class A for dividend income? The price keeps dropping and it looks interesting at close to $15

Q: In the hopes of confirmed China trade deals on the horizon and easing geopolitical tensions i'm curious about your feelings on INPUT and how they can stand to benefit? With China's ban on Canadian meat products being lifted, could we reasonably expect the Canola ban to follow suit? Any other names you may suggest that would see immediate upside from stronger US/Canada/China relations? Also do you know the payout ratio for INP? Thanks

Q: I found your response to Leonard’s question regarding which accounts international ETFs are best placed quite interesting. I hold large positions in both VE and VEE in a registered account. If I understand your response it means that I am paying a withholding tax twice (on US and International side) with no recourse to claim it back. If staying within a registered account, what two ETF would you recommend to replace VE and VEE for better tax efficiency? Would you endorse immediately switching and would there be any drawbacks to making such a switch?

Q: Hello 5i Team
1 - Please update CSW.A after last week's quarterly results.
2 - From the MD&A, Pernot Ricard owns 51.6 % of the class A (CSW.A).
Are there any other significant (>10%) shareholders of the Class A (CSW.A)?
Are there any significant holders of the Class B (CSW.B)?
3 - Could you speculate on whether Pernot Ricard would eventually take over CSW or is there an obscure provision in the Class B shares prohibiting this?
Thanks for the great service.

Q: Looking for an international dividend ETF for a long term DRIP in my TFSA. Would you recommend ZDI or something else?

Q: May I have your comments on the quarter. Please explain what they are doing with the shares. A split?. Cheers

Q: Hello 5i. I just wondered when is there earnings date? Is there is track for the stock to get up the it’s NAV in value? And lastly is it a buy?

Thanks.

Q: I need to top up my utilities exposure and am considering one of Emera or Fortis. Which of these would you recommend or is there a better choice?

Q: My only holding in the communication sector right now is a half position in Telus and I would like to increase my weighting in the sector. Would you recommend that I top it up to a full position or purchase something else in the sector. I am also underweight US equities right now so I would accept a Canadian and/or US recommendation.

Q: I regretfully bought both of these stocks for the high dividend payouts. At this point Im sitting at a 50% loss on both stocks. They each represent a decent chunk of my total portfolio. Also they’re in my TFSA. Should I take the loss on these now or wait them out for a bit? Thanks!

Q: PZA has been on a steady decline since September and is yielding 9.2%
Is this a good entry point or would you speculate that further price erosion is in the cards? Thank you

Q: Thoughts on results and going forward.

Thanks for your help.
Dale

Q: Hello 5i Team
Further to previous comments this morning and apologies for the length.

Comments on the Brookfield family of companies, US $ dividends and tax implications.

From the Brookfield website:
Please note that the quarterly dividend payable on Brookfield's Class A Limited Voting Shares is declared in U.S. dollars. Registered shareholders who are U.S. residents receive their dividends in U.S. dollars, unless they request the Cdn. dollar equivalent. Registered shareholders who are Canadian residents receive their dividends in the Cdn. dollar equivalent, unless they request to receive dividends in U.S. dollars. Prior to the September 30, 2016 payment date, the Canadian dollar equivalent of the quarterly dividend was based on the Bank of Canada noon exchange rate on the record date.
Beginning with the March 31, 2017 payment date, the Canadian dollar equivalent of the quarterly dividend is based on the Bank of Canada daily average exchange rate exactly two weeks (or 14 days) prior to the payment date for the dividend.

What this means is the Brookfield entities "declare" their dividends/distributions in US$ and the transfer agent (Computerserve) pays the broker in Canadian dollars (as the broker i.e. beneficial holder is a Canadian resident ) regardless of whether the shares are held in a Canadian or US dollar denominated account. If the shares are held in a US$ dollar account the broker then "buys" US$ to pay the share owner's account. This results in a small under or over payment of the actual dividend/distribution depending on how exchange rates have moved. This is how my brokerage (RBC Direct Investing) explained it.

Further to the tax issues:
The limited partnerships (BBU, BEP, BIP, BPY) pay distributions which are recorded on a T-5013 (and not a T-3 or T-5). The distributions are a combination of eligible dividends, interest income, foreign income, return of capital and other items depending on the entity. Companies have until March 31 to issue each years T-5013 (similar to a T-3 issued for REITs) which results in delays in filing annual income tax. Therefore it is better to hold the LPs in a RRSP/LIRA/TFSA if you want to simplify your annual tax return, however if the entities are held in a RRSP/TFSA there may be foreign withholding tax that cannot be recovered. Previous years breakdown of the distributions can be found on the individual LP's web page. Each individual should review their tax situation with a their individual tax expert.

BIP and now BEP move to create a Canadian Corporation which will issue eligible dividends will make life much simpler from a tax perspective.