Investment Q&A

Q: Good morning Peter and Team,

Sorry for another question about the changes to the mortgage business! The new rules will undoubtedly disqualify a number of people from obtaining mortgages, thus relegating them to renting instead of buying real estate. I'm wondering if this is a buying opportunity for "apartment" type REITs like CAR.UN and IIP.UN. If so, what REITs do you find most compelling, and is there any preference as to where should they be held? (RRSP, RRIF, TFSA, Non-registered investment account.)

Thanks as always for your valued advice.

Q: WOULD YOU BUY HCG TODAY? THANKS

Q: Would you recommend buying this name on the dip today amid housing concerns?

Q: With recent news that Germany's largest lender, Deutsche Bank, is in serious trouble,
is this a bad time to be taking a 5% position in DRG.UN?

Q: 10:25 AM 10/2/2016
Hello Peter
........an addendum to the question I asked yesterday [repeated below]
Maybe Sienna SIA is a better choice for income and some growth than either EXE or KMP.UN. SIA seems to have a better dividend history. I already have a full position in CSH.UN. Your advice?
Thank you.... Paul K.

9:33 AM 10/1/2016
Hello Peter
I recently purchased a small position in Killam Apartment REIT in my TFSA. It was chosen as an income investment. I am now having second thoughts that maybe Extendicare would have made a better choice.
Both have about the same dividend yield now but I think now maybe EXE has more chance of growth. However I see KMP have skipped 2 monthly dividend payments in 2015 and one so far in 2016. Is this a real concern? But then EXE cut their dividend over 40% in 2013.
Also in tough times vacancy rates at KMP might be much greater than at EXE. It is easy to sell KMP and switch to EXE with my discount broker. What is your opinion of these two companies and what would you advise me to do? I am just looking for reliable income and maybe a bit of growth.
Thank you........ Paul K

Q: I have had an 8% weighting in INO for more than 2 years with no growth but with a steady 8+% dividend. As my income portfolio is primarily in Canadian ETFs and stocks, I saw INO as a form of diversification into Europe. Can you suggest a Canadian ETF that invests outside Canada with some growth prospects and a decent yield?

Q: Yesterday, is was reported that Artis is "looking to sell retail and industrial assets in Alberta worth about C$300 million ($227 million) to diversify away from the oil-producing province"

This was not a corporate release. As an investor would have prefered to hear they had sold, rather than they are trying to get out of Alberta. In fact, I hate the idea that they are trying to unload Alberta assets now -- sounds like 'buy high sell low'.

Do you believe that they are is such a precarious state that they must unload these assets now? Would you be a buyer or seller of AX.UN now?

Q: My friends who invest in the housing I.e rental apartments/townhouses seem to be making outsize returns...I personally feel this is because their purchases are highly leveraged. They require only a 20 to 25% down payment to buy a rental property. I personally think it is much safer and easier using a diversified groups of stocks.. especially with the great advise from 5i.but to make outsized returns one needs to borrow money..Banks give preferential rates for home purchases.whereas equity purchases are treated as riskier investments.What are your thoughts on this? I would also like it if your members weigh in on this subject.

Q: Over the past year HCG is down ~ 15% while FN is up ~ 45%. FN has an attractive yield and low PE ratio ~ 13 according to TMX. I hold most stocks in your balanced portfolio so wonder if it would be time to sell HCG and replace with FN.
Appreciate your comments on this trade. Thanks to your recommendations in BE portfolio I own many profitable stocksI would not have bought otherwise.
Steve

Q: I don't really understand the term " cap rate" as applied to Reits. Is it better to have a high or low cap rate when one buys a Reit. Thanks

Q: would you be kind enough to give me your opinion on this trust after their recent transaction...please and thank you...

Q: Your thoughts on a portfolio in a non registered account consisting simply of these 3 etf's (ZRE,ZPR,ZDV) to hold forever. Dividends received put into VIG.US, I'm 45 years old, I have no mortgage and no debts looking to borrow and bring my accounts to 100k for each of these 3 etf's totalling 300k, in retirement will use only dividends. (This would act as my deferred annuity but I get to keep my money) is my thinking clear?

Q: I have no REITS in my portfolio and since I do my own taxes I like to keep things simple and did read that it better to hold REITS in an RRSP account if you don't want to be bother with return on capital, etc. I am wondering if I have no room in my RRSP would it be okay to put in my TFSA? I am looking at ZRE and XRE which one you prefer and CSH.UN or is just one index fund good enough.

Thanks
Dolores

Q: A point of information.
RUF holds only US properties which, like MST, differentiates it from other Canadian REITS.

Q: On September 9 you said that DRG.UN's payout ratio was 55%. Previously on Feb16 you said it was close to 100% and yesterday on September 20 you said it's effectively 100%. I'm confused ? What changed between September 9 and September 20 ? Looking at Morningstar I see a payout ratio of 58.7%. What is the correct payout ratio ? Also if Morningstar's figure is correct or in the vicinity of correct and the PE is 7.3 this seems to me like a company with an ample cushion for the dividend. But I realize nothing is secure when looking at a dividend in the region of 9% so what would be your concerns regarding an investment in DRG.UN ?

Q: When they say have Reits with a high valuation,do you look at cash flow,pe ratio ,debt or all of the above.Could you give examples of some high and low Reit valuations ?

Q: Which one of these two would you invest in at this time? If you would have a different choice, please provide

Q: What makes Artis REIT a good buy here?

Q: Are there any self storage companies in Canada that you think may be good investments? Do you like PSA on the NYSE as a long term investment?

Q: Have to choose between HR reit and Car.un what do you think or is there a yet better choice ?