Investment Q&A

Q: I am looking for quality "dividend growth" focused ETF (not "high dividend" ETF) in CDA and US , with an optimal balance of sectors ( some of those ETF showing, in my vue,a disproportion of sectors, like an excess of financials (ex. 40-50%) etc..). Could you suggest your 2-3 choices in CDA and US ?

Q: Hello 5i team,
I currently hold Telus and was thinking of switching to BCE since the dividend is larger. It seems telcos are not doing well over the past few years and was wondering what you think may be the cause of this? Also I was thinking that BCE is at a 10 year low and may be hitting a bottom, so there would be a better chance at appreciation as well as the dividend.

This is also to simply having a telco in my portfolio for exposure and it looks like BCE has a better chance of improving than Telus (TIXT is probably dragging it down).

Thank You,
Andrew

Q: Can you give me an opinion on Tier One Capital Limited Partnership.
I note the dividend is very high and the market cap very small Would you consider it for an investment to produce a solid ongoing dividend?
Thanks
Elliott

Q: What are your thoughts on buying some Telus right now ? Also your thoughts on BCE as opposed to Telus?

Q: Hi 5i,

I am slowly converting my TSFA to income. A model holding for me is BNS-T (Bank of Nova Scotia). A +6% dividend and good growth potential. Thank you 5i for the recommendation. Can you. recommend, "as of the prices today" 3-4 more companies that you would add. I do have access to your income portfolio of course, but I am seeking good entry positions for your current "fav's". Thank you.

Q: Could you please suggest 3-5 of the 'safest' products that provide a 7% yield. They could be stocks, preferred shares, corporate bonds, GICs... whatever. No specific time horizon. Could you please list them in order of safety. Thank you very much.

Q: Which of the Canadian Junior oil companies will be the biggest beneficiaries of the new Trans mountain pipeline and will TVE make your list?

Q: I currently hold Enbridge in a taxable account and I am thinking of selling it and purchasing a stock in the same sector that has more growth and likely a smaller yield. While I prefer Canadian companies US listed stocks would be considered if they are more attractive.
With appreciation,
Ed

Q: I own shares of Enerplus (ERF), which is being bought by Chord (CHRD). My questions are: (a) do I need to do something active (i.e., tender the shares) and if so, by what date? (b) since I will receive some CHRD shares as well as cash, does it make sense to have my ERF shares reside in the U.S. side of my brokerage account (while waiting for this transaction to close)?

Ted

Q: Appears interest rates have topped and will likely go down in Canada going forward, historically what sectors outperform in this enviroment? I'd assume the higher dividend payers would benefit,and am considering an out of utility etf in a cash account using debt to fund, for instance ZUW paying a montlhy dividend close to 1% higher than my Home LOC interest cost. I've used my LOC for many years funding this account and am well aware of the pro's and cons. Part of my strategy is the added tax benefit of the interest expense deduction, and would think long term should get a modest capital gain on the beaten up utilitites. Would you have a better idea than utilities, I need roughly an 8% dividend to cover interest? Thoughts?

Q: In any otherwise well diversified RIF portfolio I am considering exiting T and BEP.

I am looking to replace them with a couple of holdings that you feel have far greater upside in the next 3-5 years (realizing that the volatility may increase to some extent but in line with the potential for greater returns).

I have referred to several of your current favourites (which we do not currently hold) as potentials and am open to other suggestions you might have along the same lines.

If you could comment on the elimination of T and BEP and also if you believe any of the listed ones (or others ) would provide a substantially better risk/rewad profile over the next 3-5 years it would be appreciated.

Thanks,

Terry

Q: Your take on Whitecap’s quarter please.

Q: this one is eligible for dividend credit?as with GIC its interest ,correct?
So for tax reasons it would be more preferable?
About Alaris,what is happening with this company?and why is it lagging ?
You think alaris would be a good investment now?

Q: Hello Team,
Which of these two would you prefer and why?
Thank You,
Barry

Q: I am a fan of buying companies that perform the boring, tedious and "un-sexy" jobs. Star would seem to qualify and would also seem to have good cash flow, etc. Despite it's very poor momentum, it seems, otherwise, o.k. What are your thoughts regarding this stock for an income investor?

Q: Would you recommend any small or mid cap US stocks in the utility sector? Or if this is a sector where large cap is preferred? Interested in your thoughts in both cases.

Q: AQN has fallen from grace for quite some time now.
The %Dividend Yield appears to be approx. 7.3%.
Do you see any potential catalysts/positives for this company?
Is there debt any better and can their cash flows support the high
dividend? Many thanks!

Q: I’m an income investor. Basically I live off my dividend stream without the need to touch capital. In this approach, periodically I look for opportunities to bump up my income stream. I see that PPL is pretty close to its highs and that it only raised its dividend marginally last year. This is the sort of situation where I consider perhaps a switch to something paying a higher dividend with a potential of higher stock price appreciation over a longer period of time. I’m thinking of moving into some combination of BNS, ENB, maybe even BCE. what do you think??

Q: My question pertains to the risk associated with BCE. It is often recommended as a good dividend stock (which it definitely is). However, when I buy dividend stocks, I am equally looking for safety in my investment. The following are few notes:

• The share price is lower than it was 10 years ago.

• In a response to Nick on April 3 you mentioned “the dividend in FY2023 was $3.7B, which is covered by a cash flow of $7.9B,” (which aligns with the Operating Cash flow). Looking at the FY2023 report “https://bce.ca/investors/AR-2023/2023-bce-annual-financial-report.pdf” (page 20) they mention that their dividend payout policy is to fall in the range of 65-75% of free cash flow and that their payout in 2022 was 108% and in 2023 111%. I would think that this may be a better gauge as their capital requirements appear to be regularly high, and a number exceeding 100% may not be sustainable for long.

• Their level of debt appears to be very high.

• Their revenues have had minimal increase year over year and their net earnings declined quite dramatically.

• I understand they are trying to turn things around but are heavy regulated.

What is your opinion considering the above, your understanding of the situation and the current share price which appears to be historically low (offering an incredible dividend).

Would you be a buyer of the stock? Thank You!

Q: The dividends alone on these companies are becoming quite alluring. What are the risks of a cut? Or a drop in the share price from where we are today looking out about 5-10 years? From the dividend alone, one could nearly double their investment in that time frame. I don't normally chase yields, but it's hard not to when both of these companies are trading around the same levels as they were in 2016 (or earlier).

What should happen to these companies share prices if/when interest rates get cut in June?

Please deduct as many credits as necessary.