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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: Any update on A&W (AW.UN)? Still a good choice for income? Any growth on the horizon?
Read Answer Asked by Greg on January 21, 2014
Q: Can you recommend a CAD hedged ETF that invests in high yield floating bank loans? Thank you, Rick
Read Answer Asked by Richard on January 20, 2014
Q: CSE
Can you please provide an update on this company
Read Answer Asked by Sharad on January 20, 2014
Q: Thoughts on the recent slide of El Paso Pipeline (EPB)?
Read Answer Asked by Nancy on January 20, 2014
Q: The recent question on BEP.UN caused me to check the Holy Grail of info for this stock, the Investor Relations pages of the company website, which is a far more accurate and often underutilized source than brokers or other services. Distributions, not dividends, of $.3625 US for the last 4 quarters totaled $1.45 US and with their stated goal (from the 2012 Annual Report) of 3 to 5% increase annually, it seems that the next distribution is in line for an increase (proposed record date March 31). All Brookfield companies, to my knowledge, report earnings in US $ and pay out in US $, and differences in currency translation could account for different reports in C$.

Also, as you summarized, in the "Highlights" discussion in the A.R. management states, "The primary reason for this {the reported IFRS net loss} is that we recognize a significantly higher level of depreciation for our assets than we are required to reinvest in the business as sustaining capital expenditures. As a result, we also measure our financial results based on Adjusted EBITDA, funds from operations and net asset value to provide readers with an assessment of the cash flow generated by our assets and the residual cash flow retained to fund distributions and growth initiatives."

When considering these other factors in the financial results, and that the company stated NAV per LPU of $32.35 US is far above the current market price, I understand why 5i recently added to its position in the model portfolio. If memory serves me, I believe it has traded much closer to NAV in years past, so it should be only a matter of time before patient investors are rewarded, while collecting 5.7% to wait. My question is about the discount to NAV: is 21% about normal at this time when comparing similar sized companies in its industry, such as Fortis or Emera? Thanks, J.
Read Answer Asked by Jeff on January 20, 2014
Q: Hi Peter
I know you like Brookfield Renewable Energy Partners [BEP.UN] and the 5.63% dividend is excellent, however I worry that TD Waterhouse only shows earnings of $0.24 per share [with a P/E ratio of 117.3], and the dividend is $1.58.

To add to the confusion Stockhouse show earnings of $0.24, P/E of 46.6 and dividend of $1.516. The data from Morningstar are even more confusing and contradictory.

I know you like to look at the free cash flow, as you wrote to Claude on Dec 13th, which is huge, but I really don't understand how this works. You said "various non-cash accounting charges" need to be taken into account but if the money is spent it isn't there to pay dividends. So what is a "non-cash" charge? Sounds like a shell game or cheque kiting to me!

If all the cash flow covers expenses and capital investment how can there be enough left over to cover the dividend? Surely NET earnings must exceed the dividend if it is to continue on a sustainable basis without the company having to borrow money to pay it.
Thankyou..... Paul
Read Answer Asked by Paul on January 19, 2014
Q: How would you compare cdz.a and xtr as income etf funds ?
Read Answer Asked by terrance on January 19, 2014
Q: Hello 5i
What is your opinion of First Trust Senior Loan ETF "FSL" for fixed income? Do you also have any recommendations for fixed income type investments?
Read Answer Asked by Richard on January 17, 2014