Investment Q&A

Q: Hi 5i:

Can the Price to Earnings ratio (P/E) be used to determine the valuation of these yield plays or should I be looking at the Net Asset Value (NAV) instead?

Using P/E they rank cheapest to most expensive as: DFN, FIE, ZWC and EIT.UN. Is that accurate and if not, how would you rank them, cheapest to most expensive?

Thanks in advance,
Greg.

Q: Good morning! I note that you've rarely had much to say that is positive about EIT.UN. Most recently you suggested that XIC would be a better choice, and I don't understand why. ( For one thing it seems to be an apples/oranges comparison.) EIT.UN is up almost 40% in 52 weeks. And why should I care too much about the disparity in fees, if the one yields 10% and the other, less than 3%?
Regarding return of capital, I know that is has always been high, but here is the breakdown from my 2020 T3:
R.o.C. 42.7%
Cap. Gains 53.3%
el. Dividends 4.0%

Q: In an answer about this fund on March 24 this year you said you thought there were better funds. Could you name a few and explain why please?

Q: Want to know your opinion on this company, do you consider this as a good income for the ling terme?

Q: What are your thoughts on this income fund, I’ve held it for over a year and see its the price has been climbing this year, up from a price in the low $10.00 range last year.
It provides a very healthy yield (+10%) and was a Gordon Pape suggestion over a year ago at this price level. Is it a good steady fund to own for income in one’s RRSP?

Thnx

Q: what is your opinion on canoe - above - is the distribution suststainable? and is any of it RETURN OF CAPITAL THANKS - KAREN

Q: Please comment on the recent news release. Is this just a warning that they may at some point reduce or cut the dividend payment ? How likely is it that the share price decreases as a result of such a new release ?

Q: I have positions in several ETFs trading on the TSE. I like to keep up to date on major holding changes and weightings within each ETF. Is there a good (one stop shop) source of updated information, other than going on to the separate ETF company websites?

Q: I would like to know how this fund pays such a large dividend in relation to the yields of its holdings. Secondly, how likely is it to maintain the distribution, especially in respect of the energy holdings. Thanks

Q: What are your thoughts on EIT? It seems, at the moment, to be trading well below NAV. When I read the list of top 25 holdings, it mostly looks reasonable to me. But I'm not sure I understand their press release:
"[EIT] announces today that it has determined to suspend the Premium Distribution(TM) component and Distribution Reinvestment component of its Premium Distribution(TM), Distribution Reinvestment and Optional Cash Purchase Plan (the "DRIP") ".
I get that they've cancelled the DRIP but what is the Premium Distribution? What is the forward dividend at this time?

Q: Like a few of your previous questions I find myself in the pleasant position of being overweight BIP.UN { 21.4 % for the third time } and BEP.UN { 5.6 % } . The latter is only marginally overweight so I'm good with that. The former will be trimmed to 15 % for the third time. I know that is still too high but I'm comfortable with it. I was planning on deploying the funds taking a 4 % position in EIT.UN and 2 % into cash. But I've noticed that 5 I generally recommends taking at " least " a 5 % position in ETF's. I wouldn't be adverse to that as it has a juicy yield. I realize that weightings are a personal decision so I'll ask it this way. Between what percentage weighting low to high would 5 I recommend I make my decision in a moderately conservative portfolio ? Also I have done my due diligence on EIT.UN... I'm aware of the MER. I'm aware of the energy weighting. And I'm aware of being capped by a covered call strategy.... What I don't know is the return of capital and how much this should affect my decision . On their tax page I see capital gains as a return of 48 % and return of capital as 46 %. To make it meaningful should one be subtracted from the other ? Basically I'd like to know what the number is and " how to ? " and " should I ? " use it in making my investment decision ? Also in the selling of the 6 % BIP.UN should I wait to receive my free shares before doing so ? ... Thank you for your terrific service.....

Q: Would you buy this for income and small growth.Thanks Phil

Q: Would you please give me your current opinion of this stock. The price seems to have stayed in a trading range of $ 8.30 - 8.90 this year, much lower than previous years. However, it still continues to pay the high dividend & has done now for some 15 years or so.

Even with the decline in price it still has a good overall yield.

EIT is another high yield stock. What do you think of it.

Thanks

Q: Peter could you give me your opion on this stock
Thanks Pat

Q: Never heard of EIT.UN until I saw question here the other day so I had a look at it. As well as looking at previous 5I questions and answers. What 5I doesn't like appears to be the fees and 20% weigthing in energy. Looking at it this is what I see.

1} Over the past five years trading between ten and thirteen dollars. Currently trading at the lower end. I assume because of oil and gas stocks being hammered. Though there is always the possiblity of going lower I have to think that sector is near bottom.... I have no representation in oil and gas so whatever percentage of " energy " they have in oil and gas as 20% of a 4% position in EIT.UN doesn't seem unreasonable.

2} If I were to insert EIT.UN in 5I's income portfolio I would in comparison classify it as lower risk, lower volatility, and higher yield than many in there. So assessing it from a risk point of view doesn't seem any more than other securities in there.

As a covered call ETF I realize up or down swings may be capped. But what I see is the bottom end of the trading range nearby { maybe nine bucks if things go for a tumble setting aside a 2008 2009 scenario where it was somewhere around 7 dollars } and the upside if lucky maybe twelve or thirteen dollars. That seems low risk for an 11.5% yield.....

Please comment on my reasoning ? I trust 5I's opinion way more than mine....Also what are the fees ? On their site they list three numbers ranging from 1% to 2.8%.... And would a 4% weighting be appropriate in a moderately conservative portfolio that is comfortable keeping the odd high yielder in there ?.......Thanks for your great work and advice.

Q: What is happening with this fund~keeps dropping lately !

Q: Any reason eit.un is falling lately?

Q: Is an investment in this fund better in a taxable or non taxable account, and does return of capital reduce its adjusted cost base? Thanks. Bill

Q: Because of the usurious rates of tax charged by the federal and provincial governments, I wonder whether you are aware of any entities, apart from REITS and other income trusts, that distribute substantial amounts of their income as ROC. I would very much appreciate any such list. Thank you.

Q: This income fund was recently recommended as a play for its yield currently 10.65%. Do you view this as a safe and sustainable addition to an income investors portfolio ?

Thank you.