Investment Q&A

Q: I’ve owned WCP for about 4 years now and am down about 65%. It has become such a small position that I am inclined to either cut it loose or top it back up to a full position. My total energy holdings stand at about 5% so there is room to add a bit. What would you suggest?

Q: Hello, in a recent question by "sunday" regarding your top 5 o&g picks you listed VET, SU, HES, PXT, ARX. I notice the exclusion of WCP which you have been a proponent of for quite some time and have listed HES and ARX which have been much less mentioned by your team as top o&g picks. Has something changed with WCP that caused you to not consider it a top pick anymore? I personally think WCP has become even more attractive with mgmt showing its cautiousness and protecting of the downside risk.

Q: At $50ish WTI, if all I cared about was the DIV. sustainability and no bankruptcy, which of the above would you list as best.
thanks
Yossi

Q: Good Morning 5i,

So on this fine Friday long weekend morning, I'd like to pick the brains of people who've "been there and done that" much longer and more successfully than I, and have seen some things in the financial world first hand that I have not.

I want your opinion on oil and gas. Are we not watching one of these classic "blood in the streets" scenarios you always read about as investors and wish you'd had the fortitude to plug your nose and dive in? The shares of almost every publicly traded company in the space are being thrown away for nothing. The good ones, the bad ones, the ones making money, the ones losing money, good balance sheets, bad balance sheets - it's almost irrelevant. If they're in the space they're being slaughtered.

So if the thesis is:

a) it will take a lot longer to power the world with worm casings, pixie dust, and unicorn farts than some would have us believe (i.e. hydrocarbons are not going anywhere in the foreseeable future)

b) a surprising number of these companies have solid balance sheets

c) a surprising number of these companies are earning profits hand over fist, doom and gloom aside

If a, b, and c are indeed true, you'd have to believe a lot of these companies trading at historic lows will eventually make investors a lot of money. Like buying Florida real estate in 2009.

What am I missing? What holes can be shot in this thesis, looking at it objectively?

I take the point that there is no catalyst to change things or excite investors in this space (although I do get surprised from time to time that the fact that a company can throw off ridiculous amounts of profit and return it to shareholders via dividends and buybacks doesn't itself become a catalyst, but I digress...)

I also take the point that these scenarios can persist for a lot longer than people think they can before things change.

Single-company risk is always there, I understand that, but I reject the idea that all of these companies are headed for bankruptcy.

Aside from patience and the stomach to watch your investment get hammered in the short term - where exactly are the risks?? This seems like such a great buying opportunity that I feel I have to be missing something.

Thank you for whatever insight you can share, and happy long weekend to you and your families!

Ryan

Q: Hi,

I am thinking of swapping my VET position for a position in WCP, mainly from a dividend sustainability perspective and also a future growth potential perspective.

Does this sound like a constructive move or am I misguided or missing something? Are there any other energy opportunities that you would point out instead of WCP for income and growth potential?

Thanks,
Derek

Q: Eric Nutall at Ninepoint keeps on saying he is buying heavy into energy space companies that are trading around 2.5 EV to Cashflow. Just wondering what some of the better names he’d be buying into may be. Any idea or suggestions?

Q: If you were to be buying one of these today, which one and why?
Thx

Q: Would you comment on news today. Does preserving capital mean concern over dividend payout?

Q: CIBC is referring to an 82% payout ratio for WCP in 2019, which is different from the 35% payout ratio you referred to below....which is the correct number and do you view their dividend as sustainable?

Q: Hi folks, can please ask your opinion on Q2 results for Whitecap,last Thursday. Looks like they posted a profit,and seemed upbeat in their commentary going forward. Also, is the addition of ex-Saskatchewan Premier, Brad Wall significant appointment? Started a position today at $3.82 and willing to hold with dividend. Thanks as always, jb Piedmont Quebec

Q: Could you comment on wcp’s August earnings ? Fund flows decreased but so did net debt. Also the payout ratio is low which is positive with respect to dividends.

Thanks in advance

Daniel

Q: Hello Team,

Is WCP safe? is the dividend safe? Do you have a better oil name pays dividend?

Thanks,
Issak

Q: I hold VET and PXT as my exposure to energy in a non registered account. (I also hold ENB and PPL but consider them more utility). I am thinking of replacing VET with WCP for the following reasons: 1) I get a big tax loss but keep my energy exposure the same. 2) I do not lose much on the dividend and, although I think it unlikely for both, VET is more likely to cut than WCP nad 3) if oil finally recovers, WCP has more torque. Does this make sense?

Q: Good morning. I sold these company for tax-loss selling purposes and are wondering if I should buy them back or is there better options? they are all small positions in my well diversified portfolio . wcp and vet are my only oil and gas holdings. i'm a long term investor and can wait but not if any are loss causes. you can deduct as many question as u like .

Thx

Q: Which of these companies do you think has the highest dividend safety? Regarding VET, I am reminded that yield is a function of price and not directly related to performance - a company does not reduce its dividend just because the yield jumps - more likely a buyback if the fundamentals are reasonable.

Q: A good chunk of my TFSA was chugging along nicely to the tune of KWH and its nice dividend, but ... alas ... no more!

Thinking of redistributing the money into WCP ... or any of the others in the energy sector mentioned above. Your thoughts?

I've also been toying with avoiding the sector altogether in this account (since I hold Enbridge and Algonquin Power in an RSP) ... and stepping over to Savaria?

The crystal ball question (without holding anybody to account is!) ... is ... which is likely to do better ... the energy picks, or Savaria? (I'm looking for a dividend with some growth in this account.)

If I should avoid ALL of these at the moment, any other thoughts on "growth with dividend"?

Thanks, as always!

Q: WCP has a price to cash flow of 3.5, meaning a cash flow of about 1.20/y , but latest earnings are 0.06 and pays a div of 0.34/y (8%), since the dividend is higher than the earnings, from which funds is the company paying the dividend ?, is it sustainable ?, I like the cash flow, and the dividend , but are not dividends paid from earnings normally ?

Q: These 4 equities are my top 4 poor performers with a 50-57% unrealized loss. CFP is a 1% position, TSGI is 2%, WCP is 0.5%, COV also 0.5%. I am debating going to a half position on TSGI and pick up AQN. Or maybe dump TSGI all together. I'm not sure what to do with the rest to try and regain some losses here. That said, it seems COV and TSGI have potential as a long term holding but for me it would be to recover losses. Anything you guys can recommend? Thanks

Q: I am considering adding a few long-term positions to my registered accounts and looking for ideas in oil & gas - income and growth. A few names are noted above, however, looking for your top 5 recommendations.

Q: If you had to own one of these which would you pick? Why? I have a full position in VET right now.

Thanks