Investment Q&A

Q: Hi 5i - Retired income investor but also interested in growth. I have been holding FFH.PR.K:CDN for a number of years. Decent income but limited growth opportunity. It represents 1% of my portfolio. Portfolio analytics indicates I should increase my exposure to communications services. I've been thinking of selling FFH and buying BCE which I don't hold or adding to my current Telus holding (at 2.5%). Other options could be adding to Fiera (only 1% holding) or to TD (3.6%). Appreciate your thoughts and other options that provide relatively safe income with a greater long term upside. Really appreciate the good work you guys do!

Q: I have all 5 big banks and the 2 telecoms in my Margin Account for income purposes. I sold FRU and IPL because the dividend was reduced significantly. So I have some cash available to top up.
Given the Banks have Yields and Pay Out Ratios as follows (BMO 6.34% - 46.83%; BNS 5.90% - 44.47%; CM 7.49% - 36.67%; RY 5.25% - 44.84%; TD 5.82% - 44.76%) I am considering CM as the best yield and lowest Pay Out. Would you concur?
Thanks

Q: Risk of small business bankruptcys, loan losses - would this be a Material Risk for BNS given the countries they do business in, or would the risk be smaller because of the countries they do business in - or perhaps the loans to small business is a minor part of their over all portfolio (meaning their loans are to larger business with stronger balance sheets).

Q: Thank you again for this great service.
I am down about 25% on BNS (and I have no losses for tax purposes and will have more offsetting gains from other holdings). Thinking of selling BNS and buying POW which in my view has more upside. I would appreciate your advice on what to do with proceeds from BNS sale i.e., other suggestions please (I am very well diversified).

Q: Hi,
Could you please comment on commercial impaired loan growth with respect to the Canadian banks prior to the Cov 19 crisis ? Have they increased their reserves appropriately ?
Thanks

Q: In this covid-19 crisis,BNS & other big 5 can banks have been following the orders/instructions/requests of both OSFI & the Fed.Gov't.For example,deferring mortgage & credit payments,reducing interest rate on their charge cards,lending supported by the backup of the Fed.etc. What will be the impact on BNS especially on its revenue & bottom line? Txs for u usual great services & advices.

Q: I have roughly equal weights in NA, RY and BNS and a half position of TD in a TFSA. Even at the worst point of the decline (so far), I have stayed above water on on all but BNS.

As a retiree who loves his solid dividends, the banks are attractive to me and my total holdings are likely higher than you would recommend. I am wondering if I should use the correction to move out of NA and redistribute the funds into RY and BNS. (No room to add money to the TFSA.)

Your thoughts?

Q: Morning ,
Relative to your recent comments on Canadian Banks and shorts , What % of shorts does it take to make a meaningful impact on the upside. Have benefited in shorts recently in Snap, Shop and ETSY . Cut my investing teeth in the Nortel, Rim , JDSU days and yet my banks have been my best long term move.
Thanks
Greg

Q: Hi 5i Team,
What is the payout ratio for BNS? I would like to enter back into the stock with my TFSA for dividend and appreciation at this point. How safe is the dividend?

Andrew

Q: How much of an influence do American investors have on the price of our banks? Many Canadian investors have bank stocks and rely on their dividends for income.

Steve Eisman of "The Big Short" was talking about how an interesting short he sees is Canadian banks and that he has been short for some time. He says the Canadian banks have not had a credit cycle in 30 years, they are extremely unprepared for it and will have real problems.

What is your opinion?

Thanks!

Q: Can you please provide me your top 6 Canadian financials that you would buy at this time. Please rank:
Thank you

Q: Regarding Gayle’s question today and reference to BOC backstopping the real estate market by purchasing mortgages,etc.

Question: Would knowing this give you more (i.e. me) more confidence in buying Canadian banks now given their current share prices and more importantly attractive dividends?

Call me a “worrier” but I have held off adding to my already losing positions in BNS and CM thinking that dividends might become vulnerable if mortgage defaults start to increase significantly.

Question: I am retired, income oriented and combing the market for yield. Bonds seem unattractive and preferreds have a number of inherent risks as I think you have pointed out. Or am I perceiving your opinion incorrectly.? Hence my looking at banks again.

Thank you in advance for your help with these decisions.

Q: I would like your help putting together a yield portfolio of between 15 and 20 names.
This would be the entire investments for my wife and I. We are both retired and now live full-time in the U.S. And at some point I expect my Canadian newspaper pension to disappear, so I am looking to replace that money.
I would like your opinion of the above names with regard to safety of the income and overall diversification.
I would also appreciate some additional ideas and would like to know if I`m off base on any or all of these names.
I am currently only invested in CM, BNS and BMO and DIR.UN.
Please take 20 credits (or more).
Thank you in advance for your invaluable assistance.

Q: In a recent question asked by Andrew concerning the setting up of a dividend stream of safe and stable Canadian stocks, I was more surprised by some of the stocks you didn't name rather by the stocks you did include - namely bank stocks. The three major banks, for the most part, are paying higher dividends than the ones you included and you have stated in the past you consider them as secure as any. Was the reason for their omission a concern that these dividends are likely to stagnate for a while or is there some other reason(s)?

Appreciate your insight.

Paul F.

Q: Greetings 5i ....I hold RY and BNS in a registered account and I am considering a switch to JPM. Aside from the lower dividend do you think this might be a viable longer term capital appreciation story. Best Regards...Gary

Q: I feel I am to heavily weighted in these financials. Would you please rank them as to which ones you would keep and why. Thank You.

Q: With BNS 's higher exposure in emerging market than the other banks, will this be a concern for the earnings in the next few quarters, or do you think this is still a good buy?
What is an alternative bank in this volatile market. Thank you as always.

Q: Thanks for your flash report. Much appreciated.
Without doing a full review, which of the above would risk being downgraded if you were to do a full review? Thanks. Your service is great!

Q: Hi. I see in many responses related to Canadian banks that when you reply that you prefer bank a, b, c over bank X, is the a, b, c in order of preference? Sometimes the order changes from different responses.
Would you be able to list the Canadian banks in order of preference for a 5-10 year hold. I understand that in 6 or 12 months the order may change, but I'm looking today what it would be. Thanks

Q: Which Of these two banks will bring me the best return in the next six months? Or is there another bank you would prefer?
Thanks