Investment Q&A

Q: POW has now fallen to a price giving a similar yield to ENB, around 8%. For a senior living on dividend income, which of the two has the safer dividend for a long term hold? You have tended to favour SLF in the insurance/financial space, so would you still recommend SLF over POW for dividend safety and growth, despite its lower yield? If you don't like any of these three stocks, what's your top Canadian pick for a senior looking for a decent safe yield, with some potential for long term growth?

Q: The current volatility and fear in the market has lead me to believe there will be some companies that will unnecessarily be punished/caught in the crossfire and therefore offer a great risk/return
could you please list out companies in your mind that have decreased significantly unfairly and/or offer a compelling risk/return in the US or Canadian Markets
thank you

Q: I am aiming to have a portfolio with 2 solid companies in each of the 11 sectors. Do you feel SLF and X would be sufficient for allocation to the financial sector? Or would you suggest adding a bank (RY) to provide better diversification? Thanks in advance.

Q: Hello 5i, if you had to choose 10 companies out of the USA or Canada for a 5 year hold what would you choose?

There is no need for additional comments, the money isn’t needed in 5 years that’s just a timeframe that should hopefully allow for success vs the virus and recovery economically and adapting to the changed world ( going cashless, online shopping, deliveries, remote work etc) Risk is not an issue and neither is sector diversification. thank you !

Q: Assuming markets will tank again, which would you suggest be purchased for a long-term hold at that time: BAM.A, SLF or TRI? Retired investor looking for dividends with some growth.

Many thanks to the entire 5i team for your collective efforts to provide us with timely, thoughtful information and a much-needed balanced perspective during this most challenging of times.

Q: Would you add to SLF at $37?
Any reason for the recent weakness outside a bad market? Would they have higher than usual insurance liability in this environment? (Such as business interruption clause or other). Thank you!

Q: Why are all the insurance companies getting slaughtered? Because of ultralow interest rates? Good buy at these prices? Think the dividends are safe?

What would be your favourite?

Q: I am a buy and hold investor with 5 to 10 years of time horizon.
Have the following 7 stocks in Canadian financials in the order of their weights in our portfolio. Financials makeup roughly 7.5% of the total portfolio including cash positions and we like their dividend. TD, RY, BNS, BMO, SLF, CM, and MFC. I like to reduce exposure to financials and also like to reduce number of different shares. Two questions:
1. Is 7.5% a reasonable weight considering the current situation?
2. Which one of these I should sell to reduce financial weight and to reduce the number of shares in financials?

Q: Hi- you mentioned SLF was one to pick at being signficant value. Why lifeco over a bank? What are the risks associated so say a BNS verus SLF and why do you prefer SLF.

Q: Hi 5i Research Team:

I have traded Forex before and am new to stock trading. 90% of my RRSP, RESP and TFSA is in cash and I'd like to avail the current market conditions by "gradually" buying the dips.. and holding it over the long term, 5 to 10 years. I understand that no one can time the market or its bottom.

After exploring the reports and questions on your site, I have identified the enclosed 29 stocks based on following criteria:
- Current Retracements of > 75% over 52 week high & low
- Dividend Yield > 5% (in some cases, like WEED, which is a bit risky, I understand there's no dividend in the near term.. and I am simply going for the upside swing over the next 2 years... same for CRON and Air Canada)

Considering my 90% cash position and strategy to partially buy in on dips over the next few weeks, can you please advise if my stock selection is sound. In addition to my stock picks, please advise anything else that I should keep in mind.

Thanks for everything you do. Much appreciate.

Q: In an earlier answer today you compared slf and bam and concluded that bam would be a better buy today. This comparison seemed odd to me as they seem to be very different types of companies. That aside, however, if you could only buy one of these two today, sector not an issue, which one would you choose and why
Thanks again

Q: Good afternoon.

I’m interested in which you prefer (1 and 2) in each category below.

ATD.B, PBH, MRU, L

SLF, TD, BAM.A, TRI

WSP, SIS, CAE

CSU, SHOP, ENGH, KXS

BEP.UN, FTS, AQN

Thank you.

Q: I’m confused by why you often suggest Sun Life as a suitable long term investment choice. Sun Life will be negatively impacted by lower interest rates and I haven’t understood what makes SLF so different from GWO or MFC. Can you expand a bit on the uniqueness of this pick?

Q: Hi, I was thinking of adding to Sun Life with its current low valuation and high dividend. This sounds morbid but a friend of mine suggested if there is a high death rate from COVID-19, then SLF might have to make out higher than normal payouts affecting its profitability. I realize this is not its only business. What say you sage folks?

Thank you, Michael

Q: I hear you when you say that we shouldn't be too involved in playing the exchange rate between the Canadian and American dollar. But would this not be a reasonable way: buy sunlife in American dollars, since i have them. If the Canadian dollar goes up i sell in canadian dollars. If it goes down, i still have my American dollars in Sunlife that i had before
Looks good but am i missing anything?
Thanks

Q: After the "blood in the streets" kind of day we have had today, March 12, was I "crazy" to add to my holdings of the aforementioned? Are their dividends as reliable as I perceive them to be? FYI, I am a year away from retirement at age 60 and value dividend income for a portion of my portfolio.

Q: HI Guys
I have never used any margin to do any investing but thinking of when I was around in 2009 and some CDN banks were yielding over 10% and wondering afterwards why I did not but more of these, suddenly, high yield "safe" investments. Afterwards it stuck myself how nice it would be to have that yield for life! So this time around I have no debt, a house paid off, and considerable assets, so was thinking of borrowing a bit to see if we could take advantage of this unfortunate downturn. So wondering if you could suggest 5 CDN companies to invest in, in 5 different sectors, and whose stock value has dropped considerably. Companies that have great risk management, have rock solid balance sheets, that are now yielding above 5%, and whose stock you could see substantially higher when the market swings up again, or at least will maintain their dividend. Thinking in terms of time - at least a year or two here.
Much thanks for all your guidance through these tough times.

Stuart

Q: I currently own BNS, BAM and GSY in my Canadian equity portfolio for a total weight in the financial space of about 12%. I am wondering if you would currently favour a switch to SLF from BNS, especially if I could crystallize a taxable loss?

Also a comment about the questions on market timing that you have recently received. If you are reacting to volatile markets it may simply be that you are not as risk tolerant as you believe!

Q: Top 5 picks for a Smith Maneuver portfolio of dividend paying stocks for someone in their late 30's?

Q: I know you really like BNS but with TD at a 52 weeks low, would you pick it over BNS for a long term holding. (Building a position for dividend income)

Also, can you explain me if there is an advantage to own 2 full positions of banks vs 1 of bank and 1 of SLF (knowing that its your top insurance company pick)