Investment Q&A

Q: I'm not really a preferred share investor because I don't really understand the various nuances of them. I understand the difference between perpetual, reset, etc but not the finer points.... And I only bought them because no one knew what was going to happen with the Covid crash and I happened to be 30% in cash ..... My reasoning was if the blue chips can't cover their preferred dividends it's the end of the world and I may as well head down to the harbour, steal a tugboat { I'm a retired tugboater } a barge full of beer and head north with a fishing pole ..... My preferreds have returned 70% plus dividends for me and I am thinking of exiting . My problem is they keep rising and I don't understand why . BAM.PR.B was over $18 in 2018 and currently yields 3.1% at a considerably lower price ..... ENB.PR.H is not nearly as far off of it's 2018 price so I'm guessing there are differences between the two in spite of the fact they are both " resets " ..... I'm planning on selling both but there is no rush . So the question is why the rise ? Is there current potential to for BAM.PR.B to return to 2018 prices or even rise more at all ? ......And why is there so much of a difference in 2018 to today's prices between the two preferreds ?

Q: There are a lot of different BAM preferred shares that one could choose from to invest. Some have dived yields as high as 8%? What is the difference in each of the issues? Why would one not just choose the one with the highest dividend yield? Can you please clarify? Is there a drawback of choosing one over the other? If you had to choose one which would you pick?

Regards,

Brendan

Q: What is the general feeling about this specific issue relative to the current market and interest rate outlook? How does it stackup against other preferred issues of Brookfield? Thanks for all you do for us in these times of turbulence.

Q: What is your opinion re: Floating Rate Prefs where the interest rate is set quarterly off of the Prime Rate (eg - BAM.PR.B). With the prime rate of 2.45% near the low of the last 20 years (2.25% in March 2009) BAM.PR.B is yielding about 5.75% which looks very attractive since there can't be much more risk of a move down in interest rates. (This assumes that next dividend is based off of the 2.45% and not 3.95% which was the basis for the last dividend that was paid - and is the basis for the indicative yield in Quotes of 9.5%) Ultimately rates will move up as will the dividend....so buying now pretty much sets the floor with quite a bit of upside. Do you agree? Thanks

Q: how often does this pfd reset its dividend ( monthly, quarterly, other) and is it eligible for the Canadian divided tax credit. Also where could I find more specific info on this pfd. Thanks

Q: A few days ago BRF.PR.E was recommended on BNN as a candidate for both a good capital gain and at the time a 7.5% yield. It promptly got a 20% hike in price and now yields 5.8% and has returned to it's normal trading level . So I missed that little opportunity. But as I don't have any fixed income it made me have a look around for other beat up preferreds where I discovered another Brookfield product BAM.PR.B down in price and currently yielding 8.8% .BAM.PR.B is a floating rate preferred and I was unable to find out which kind BRF.PR.E is. I don't really understand which type of preferred is more desirable than others but I do have faith in Brookfield getting through this mess maintaining the dividends on their preferred shares. Please explain the desirability of one over the other of these two preferreds ? There is a considerable difference in both their highs in price and current yield . Thank you for your guidance through these tough market times.

Q: Could you explain why this preferred share is selling such a discount . Would it be a good buying opportunity for income? What would be the possible downside?