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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: Hello,
In addition to a savings account, I opened a $10k TFSA to serve that same purpose; I was thinking of buying Bell Aliant.
It has traded within a range between $25 and $28 for the last 5 years; it now sits at the low end of the range.
What do you think? Could you also suggest an alternative?
Thanks,
Tony
Read Answer Asked by Antoine on February 07, 2014
Q: Hello Peter and all at 5i: I hold DCI in a TSFA and it is currently down considerably from my purchase. If this was you would you sell, take your loss and put the proceeds into something with a better risk/return. I have read your comments in your site and listened to you on BNN and know it has a good dividend but it takes a long time for a dividend to make up for the loss in stock price. Thank you Barb
Read Answer Asked by Barbara on February 06, 2014
Q: Good day! I have owned PPL (Pembina Pipeline) for a few years, having bought in when he dividend rate was much higher. As a dividend investor (usually targeting a minimum of 5% or more dividend returns) I subscribe to the theory that capital appreciation runs hand-in-hand with “somewhat” higher dividends – and yes I am aware of a whole mess of caveats with that statement, which hopefully I take fully into consideration. I do consider beta, historical performance of dividends in a “crash” (i.e 2008), and also look for the “moat” or recession proof aspect – amongst other things such as ROE, payout ratios, cash balances, and such. I do look at growth, but a sustainable dividend stream is the primary focus.
That being said as a background, I can see PPL has grown, and projects on the go indicate future increased cash flow, and then assumedly higher dividends. My question pertains to how long I should wait for the dividend rate to go back to the 5 or 6 percent payout. I am unable to get a clear picture from their documentation as to the timeframe of the increased cash flow. Are you able to discern when we should expect the increased cash flow - and matching dividend adjustments - and can you suggest at what point I might consider moving my cash elsewhere (i.e another payer in the 6% - 7% range - i.e such as RSI, STB, MRG.UN, HLP.UN - just for some examples)?
Thanks!
Read Answer Asked by Paul on February 05, 2014
Q: Good Morning! Given the recent issues EIF is facing, would you consider the new EIF convertible debenture with a 6% coupon a safe investement if held to maturity and if so would such investment be best in a TFSA, RRSP or outside. Do you see the debenture possibly sinking bellow par in the near future and would it be better to wait and possibly buy it later at a more favorable valuation.

Thanks for your advice.
Joseph
Read Answer Asked by Joseph on February 04, 2014
Q: IPL.UN is it still a good time to buy?

From Reuters:
'However the company warned that while it will spend less on the expansion this year, costs for the projects are rising. It estimates it will spend a total C$2.9 billion on the lines, 12 percent above earlier estimates, because of higher labor expenses and changes to the scope of the projects.
The higher costs will be recouped from the shippers on the lines.'
Read Answer Asked by Varun on February 04, 2014
Q: 2:58 PM 2/3/2014
Hi Peter:
Today both Liquor Stores LIQ [down over 11% today ] and Rogers Sugar RSI [down over 6% today] have had big declines over the last months. I know that the BC Government have just approved the sale of wines and spirits in corner stores and this extra competition will hit Liquor Stores in BC. As far as Rogers Sugar goes all I can see as a cause is possible higher natural gas costs. Do you know of any other news?
Both companies have had considerable net insider buying as prices fell over the last year which surely is encouraging.
I hold these stocks purely for the dividends and expect little if any capital gain over the years.
Can we reasonably expect both companies to just jog along and continue to pay their dividends and recover over time, and should I just continue to hold them?
Regards........ Paul
Read Answer Asked by Paul on February 03, 2014
Q: What are your thoughts on LIQ at this time?
Read Answer Asked by Vince on February 03, 2014
Q: The pipeline utilities IPL PPL ALA ENF are trading well above their moving averages on lowish volume, some setting new highs in the face of generally higher interest rates and a weak market, while TRP has been quite volatile on high volume. What should a holder read into this? Thanks, J.
Read Answer Asked by Jeff on February 03, 2014
Q: Could I please have an update on Horizon's Floating Rate Bond ETF - HFR? Thanks!
Read Answer Asked by Paul W on February 03, 2014
Q: I would appreciate your thoughts on High Yield Bond ETFs for a long term hold in a registered account. I am looking at HYI, CHB or XHY. Which of those, if any, would you suggest (or something else).
Read Answer Asked by David on February 03, 2014
Q: Hi 5i Team,
Can you please comment on Rogers Sugar's results this quarter? The stock has taken another beating today on disappointing results. Is the cash flow still there, and is the dividend still secure? Many thanks!
Read Answer Asked by Brian on January 31, 2014
Q: Peter,

You should look more closely at STB. It is a great little company that is total misunderstood due to how it finances itself and the seasonality of their revenues. Income, profits and cash flow continue to rise over the years. I am a longterm shareholder and love the dividend.

The following is from their 2013 annual report:

"We finished the year with
a pay out ratio of 79 percent and
forecast that number to decrease further
in fiscal 2014."

Regards
John
Read Answer Asked by John on January 31, 2014
Q: Peter, My question is on Student Transportation. I cannot find the payout ratio anywhere, including the web site. Also, your comments please. Great div. as long as it is dependable. Looking for real long term hold. Thank you Ken
Read Answer Asked by Ken on January 31, 2014
Q: Hello 5i Team,
HPR, HYI, XSB
All are down (slightly). These are the only bond and preferred share funds that I hold, for a total of $80k. My question is, should I replace them with something else or should they be part of a diversified portfolio? Many thanks in advance.
Read Answer Asked by Kathy on January 30, 2014
Q: I notice that Rogers Sugar (RSI) is down again to-day before a conference call to-morrow regarding Q1 results. It is now paying a dividend of 7%. Do you have any insight as to what might be going on, and do you think the dividend is safe? Is the company well managed?
Thanks for your excellent service, Bob.
Read Answer Asked by Lynn on January 29, 2014
Q: Rogers Sugar has dropped significantly in just 2 days, with earnings on Jan 30th.
Besides the possibility of a leak of unimpressive earnings, what other reasons might account for the drop?
Thanks!
Read Answer Asked by Paul on January 29, 2014
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