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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 5i Team

I previously owned TransAlta (TA), when they cut the dividend in 2015/2016 and took the capital loss at the time.

I have owned RNW since 2015, so I currently have a small capital gain.

Upon RNW and TA news release on December 15, it appears the future for RNW is not great and several analysts have stated the best course of action would be for TA to take RNW private (similar to what Enbridge did with Enbridge Income Fund in 2018). Otherwise they indicated no dividend growth and a potential future cut in RNW dividend.

Questions are:

1 - Would it make sense to sell my RNW shares and purchase TA shares (essentially trading dividend income for future stock growth).

2 - Consider the RNW and TA not buyable and finally sell out RNW and buy something else. Any suggestions?

3 - Where does Brookfield fit in with Trans Alta, as they previously made a deal in 2018/2109 for a future purchase of TA hydro assets?

Thanks for all the information in the Q&A portion of 5i.



Read Answer Asked by Stephen on December 21, 2022
Q: As a follow-up to my earlier question since TA owns 60% of RNW and according to the Globe the market cap of RNW is $4.9 billion, TA's share of RNW would be $2.94 billion. TA's total market cap is $3.45 billion. How would you asses the value of TA's other assets. Are any of these assets in renewable energy.
Read Answer Asked by Irwin on March 14, 2022
Q: Could you comment on TA's fourth-quarter and year end results. It seems to trade at approximately 6.5 times free cash flow. How does this compare to other companies in its sector. Does it own 60% of RNW through its ownership of of TransAlta Generation Partnership which owns which owns 23% of RNW(see TransAlta Corporation | 2021 Annual Information Form)and its 37% direct ownership?
Read Answer Asked by Irwin on March 10, 2022
Q: Thinking to sell TA and replace with BEP.UN. This is for an RRSP account, the higher dividend with BEP is nice but not essential, high debt is more of a concern. safety and long term growth opportunities are primary considerations. Do you endorse this switch?
Read Answer Asked by Barbara on November 12, 2021
Q: Greetings 5i team.

Last comparison was back in March/21. Can you review and update based on most recent results of both Co's and stock price action?
RNW still your preferred of the two today and looking forward?
For Alberta specific, any others you might throw in the mix?

Thanks for your help.
Read Answer Asked by Arthur on August 24, 2021
Q: Hello 5i Team
TransAlta (TA) and TransAlta Renewables (RNW) released results March 03.
1 - What are your thoughts on the earnings for both companies?
2 - Which company do you think will provide the best return going forward?
3 - What are your thoughts on purchase price where both companies become interesting?
4 - Why do you think RNW has not raised their dividend for several years, given that they are a "yieldo". Are they receiving a better internal rate of return on drop down projects from TA then the dividend rate?
Thanks
Read Answer Asked by Stephen on March 05, 2021
Q: hi guys i am anew member and i really am happy that i belong to 5i would you recommend these stocks or is there something better thank you
Read Answer Asked by Larry on July 17, 2020
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