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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: 5i I need help in Rebalancing my RRIF. Maybe I am too attached to my stocks. I asked about BIP and BEP and you indicated my energy sector at 22% of my RRIF was high and I agree. I need less volatility but do require income. Of the 22% CPG-T =10%, FRU-T =30%, PPL=35%,SGY=8%, VSN=12% and WCP=5%.I like everyone, require your wisdom.

W
Read Answer Asked by Wayne on October 04, 2016
Q: A broker came out with a report on VSN today that put the target price at 12.00 (CIBC is at $14), below the current price of 12.75. Upon further checking it appears most analysts share that view. Their payout ratio seems to be high, and projects are unsure. Time to sell? Move to TRP? BIP.UN?
Read Answer Asked by Kurt W on September 28, 2016
Q: I realize these are all in different sectors but,all have 8% plus dividends; for an RSP account. Diversification not an issue.Which in your view do you like the best and has the best up side as well as maintaining its dividend, mid to long term.
Read Answer Asked by Henry on August 17, 2016
Q: Hello - hope everyone is having a great summer.

The following comments have me a little confused as to how VSN is doing. Your review and interpretation is appreciated.


Aug 3 (Reuters) - Veresen Inc

* Veresen announces enhanced funding strategy through pursuing sale of power business and the suspension of drip, second quarter financial results and increased guidance

* Q2 adjusted earnings per share C$0.04

* Q2 earnings per share view C$0.06 -- Thomson Reuters I/B/E/S

* Has engaged TD Securities inc. As company's sole financial advisor on divestiture of power business

* Veresen's board of directors has confirmed annualized dividend rate of $1.00 per common share

* Has elected to suspend premium dividend and dividend reinvestment plan beginning with august 2016 dividend

* Proceeds will be invested to develop inventory of contracted capital projects in core natural gas and ngl infrastructure business

* Has increased its 2016 distributable cash guidance to be in range of $1.03 per common share to $1.13 per common share Source text for Eikon.
Read Answer Asked by Mike on August 04, 2016
Q: Have read a few of your answers regarding Veresen and some concerns that there may be a dividend cut. I wonder if you realize that 61% of their cash flow (attributable to dividends) is retained for investment in the new Montney gas plants and they issue shares for that amount thru their DRIP. Unlike many capital intensive companies that do separate offerings for new projects Veresen uses the cash saved from the DRIP, same end result though, some dilution associated with each project. Only 39% of their dividend is actually paid out in cash. Actually companies like Inter Pipeline see 50% of their dividends also paid out thru their DRIP as well, but they also do offerings associated with individual projects. If you look thru Veresens 2016 guidance you will see $200 mill a year being reinvested from their DRIP into the $1 bill Montney plants under construction. Whether you do it thru a DRIP or a separate offerings it would seem so long as they are getting an appropriate ROI this may be prudent. It also suggests that there is less risk than might otherwise be considered here given their planning and guidance is based on these facts. They have met guidance three of the last three years if you look at what was said and what has happened. Any thoughts on this information? Of course I realize no dividend is 100% safe, just wanted to point out that the actual cash portion paid out is substantially lower than their annual cash flow.
Read Answer Asked by Wyatt on April 14, 2016
Q: In response to Derek's question regarding Veresen's 2 DRIP's I just point out that they do not have an OCP (Optional Cash Purchase) component.

So he cannot buy more shares via directly within the plans (for no charge).

I have DRIP'd many companies for over a decade, not referring to the synthetic DRIP's financial institutions offer, and have set up many people in Canada. I know a lot of investors like to send in an OCP regularly or occasionally and find it a component they require.

There are many CDN. companies with DRIP's with and without a 2% - 5% discount on reinvested dividends, but that do not have an OCP component.

ALA still has a 5% discount on reinvested dividends for example, ENB 2% and REI.un 3.1% off the top of my head.

There is a site where people exchange (sell) for no fee to each other to set up DRIP's. Only 1 share usually is required except NA which requires 100 as I recall. Cost is usually stock price + a stamp + $10. As opposed to getting a share certificate from one's brokerage account transferred from Street form into the individual's name and charge $50 to $100 typically.

Hope this is of help to Derek or someone.
Read Answer Asked by Stan (1) on January 14, 2016
Q: I am looking at buying some VSN as willing to take a chance on (no) dividend cut.
Can you explain the difference between the Dividend Reinvestment Component and the Premium Dividend Component of the DRIP.I understand the 5% discount but not the 102% cash payment.

Thanks

Derek
Read Answer Asked by Derek on January 14, 2016
Q: Hi Peter & Team: With your reply to Hugh on Nov. 3 I have VSN in TFSA with a big loss, should I still hold or sell? I also have GWO with a good gain, should I sell half of it to invest in something else to make my acct more diversified? I also have ZDV in the acct with a loss! I am not sure if I should take the loss also. Thank you and have a good day!
Read Answer Asked by LOUISA on November 06, 2015
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