Investment Q&A

Q: I am thinking of adding some Northwest Co. to my portfolio. I have read your comments on NWC's recent quarter and would like any information on insider holdings and any strong institutional interests(s). Appreciate your thoughts on what are the preferred metrics for looking at consumer staple stocks such as L, MRU, EMP.B and ATD.B Thanks for all you do. / Bill

Q: Good Morning: I have been reading some of the recent questions related to bond etfs. I have been avoiding bonds and using preferred shares instead for fixed income in my portfolio, slightly better yield although also struggling through 2015. I notice that the yield for the two bond etfs mentioned is roughly 3.2 (CBO) and 3.1 (XCB). (Taken from BMO Investorline trailing 12 months average payout.) In your opinion, what can I expect in terms of yield from these instruments going forward -- roughly the same, a little more, or a little less? Also, I notice (not surprisingly) that the share price for CBO is near its 5 year low, whereas for XCB it is slightly up over the same period. What would your opinion be in terms of share price direction for each over the next 2 to 3 years as well. Many thanks. Don

Q: My question regarding BCE.PR.S. After a number of years of owing this preferred, is it worth holding any longer. It has lost a lot of value since my purchase, I believe it has a floating rate dividend.
Thanks for your opinion. I was thinking of switching to BCE common share.

Shirley

Q: I have owned this preferred for 3+ years and am getting impatient with it. I purchased it for income, but have lost more in value. I am thinking about selling it and taking my loss and just buy BCE and collect their dividend, and hope for a little growth.
Is this a good idea, what are your thoughts. Any other suggestion would be appreciated.
5i has been very informative, I really enjoy it.
Shirley

Q: Hello Peter, I am looking for safe investment with dividends, I have ZEF in my portfolio, I would appreciate your help to rate the above, perhaps suggesting a couple better ones. Also, how would future interest rate increases effect their prises.
Many thanks, J.A.P. Burlington

Q: Bond ETF: Of all the questions about bond ETFs, XCB is hardly ever mentioned. XCB is one of my core holdings in the fixed income portion of my portfolio. I now have additional cash for corporate bonds, would you buy XCB as a long term (10 years +) holding? I do not need the income, this is simply a portfolio stabilizer. Would you choose a different bond ETF?

Q: Sorry for resubmitting the same question again. It seems that I am doing something wrong. Just realized that the name of the Company didn't appear on my last submission, so I am putting the company name and the symbol in the text, (Capstone Mining CSE.PR.A). My original question was sent two days ago, and probably did the same mistake.

I am in dilemma in choosing between the offer to convert series A to a fixed reset for five years at 3.271%, to convert to the floating rate preferred, initial quarterly rate 3.204% or to just take my losses and sell. What would you suggest, how safe is the dividends on this prefered now it is in the hands of the new company that bought Capstone and considering that the rate of return of over 6% based on current price? What would be a good replacement if income requirement isn't important and would rather have some growth and less dividend?

Thanks.

Q: Covered call ETFs are gaining popularity. Does the technique have risk that isn't being talked about (yet)? It seems too good to be true. You can buy ZWA which owns 30 awesome mega-caps and has a 5.2% yield. Or, you can buy ZRE which contains companies that max their payout to get you that same yield of 5.2%. The first, ZWA, is not exposed to rising interest rates, or, to the housing mania. In that sense, ZWA seems to be a clear winner for income. But something tells me that as more firms make similar ETFs, something will happen. Won't the increase in put/call writing become crowded and a problem? Maybe fees will increase? Have you come across some writing on the subject? I'd like to investigate before putting 3 years of savings on ZWA. Thanks team.

Q: Peter, would you please give me the top three Canadian, American and European stocks with a long history of paying and raising dividends Thanks Ken

Q: Do you have an opinion on this royalty trust?

Thanks
David

Q: Can you tell me the dividend payout ratio on "FAP,TO", also where can I find this information myself?
Thanks,5i,
Ken

Q: I am wondering if you have the 10 year averages for price to book and p/e for Telus. Compared to the current numbers and the expected growth do you consider the current valuation reasonable?
Thanks
Mike

Q: I own HEWJ and ZDM as my International exposure (5% of my portolio). Neither are doing well, especially after the Brexit vote and I'd like to replace them with ETFs with a more positive outlook for the next 2-3 years. Your thoughts and recommendations please!

Q: Hi,
Im looking to pick up some utility sector. Which of these would you recommend for long term continual investment. Dividends will also be reinvested through DRIP if available.

Thanks

Q: Hi Team,
I was hoping you could help explain something. I own a five-year corporate bond ladder. This year to date the value of my bonds have fallen 0.91% (which on its own is fine as I hold the bonds to maturity). I am unclear why my bonds would underperform VAB (up 3.56%) and CBO (down 0.16%) in the same timeframe.

I realize VAB has a longer duration on average than my ladder or CBO. Credit quality may be better in both funds, and mine are typically in the BBB range. But is there any other reason why bond funds should outperform specific bonds in a ladder? Is there a scenario where a bond ladder will outperform the bond funds?

Finally, is there any advantage to owning bonds in a ladder at all?

Thank you. Michael

Q: I have been wanted to diversify my portfolio and I was wondering if this is a good list or a bit of overkill. I have recently bought some XBB. I want these for fairly long positions, my concern is that I might be over paying for these as everyone is fearful and flocking to bonds as a safety net. Would it be wise to let things settle or buy partial positions in these etfs. Also would it worthwhile also owning some us long term treasuries. I am looking to try to cover all possibilities so I am not chasing in the future when market conditions change. I would like diverse group to cover inflation, rising market, recession. I know that I cant take all risk off but I would like have some safety net and not hold all equities.

Q: I am considering selling XRB. Is this a good time to hold or get rid of a real return bond index?

Q: I have shares of AQN and I am in the profit zone, But because of the higher dividend I am looking to switch to BEP.UN
Your Thaughts, thanks

Q: I have transitioned a substantial part of my own RRSP from mutual funds to individual stocks & other investments, with the help of 5i (thanks! Done quite well), over the past 3 years.

My wife is still reluctant to do the same, so we are transitioning her RRSP from mutual funds to ETF's, with only one purchased so far. The specific ETF our advisor put us in was BMO ZDV. At the time, I specifically wanted an ETF with lower exposure to the energy sector.

Unfortunately, we bought in at the August 2014 peak, and are underwater by 20%, even after distributions. Moreover, the distributions have been steadily dropping since we bought in.

Is it time to bail out of this ETF, and if so, what would you replace it with?

Thanks.

Q: This is a company that is not discussed often. It appears to have a reasonable balance sheet and has raised its dividend for 27 straight years. It does operate in a cyclical industry but it has seemed to manage this well, in part, I would think, because of its used equipment and repair operations. Is this a company you would recommend?

Also, refrigeration is a part of its operations. How does that unit fit in with its heavy equipment franchise? Are there resulting synergies, is it a different customer base, thereby offering diversification or are they the same customers and therefore there are reduced sales and marketing costs?

Appreciate your insight.

Paul F.