Investment Q&A

Q: I have holdings in BIP and BEP. Should I consider BAM instead?

Q: I am retired and consider safety and a high dividend yield with growth potential important.

I am a fan of the Brookfield companies and hold both BEP.UN and BIP.UN

My concern with BEP.UN is that RBC estimates its 2017 ACFFO payout ratio at 109% and may stay elevated for several years. It believes it to be fully valued and its share price is above target price.

I know you like this stock but should I be concerned? Thanks

DEREK

Q: First of all thank you for putting the "sectors" beside the names in your portfolios - that is much appreciated.

Could you please list the "utility" companies you like best in order or preference and could you state if it is "large" company or a "small" company.
Thank you
Margaret

Q: Do the high p/e ratios on these stocks concern you or does their future growth take care of that? Also, are their dividends sustainable over the long term? Morningstar reports a low ROE on BEP and BIP, yet they are ranked as a high quality investment. AQN,BIP-UN and especially BEP-UN also seem to have high debt levels. Are these still good buys? thanks

Q: I expect to retire in a couple of years. About 80% of my money is managed professionally but I keep a small account to help me stay aware of the markets comings and goings. In my utilities holdings I have a full position in Fortis, about 3/4 position in BEP.UN and a small holding of NPI. I am thinking of adding to NPI as a source of income. Your report of last year was ok, but notes that it should be reviewed in the summer of 2017. Any new thoughts on NPI? Would you add to it, to one of the other two, or avoid them all pending changes in interest rates?

Thanks for all your help - though I don't ask a lot of questions I learn a lot from answers to questions posed by others.

Q: Seems to have corrected recently on a (complex?) financing. Your current opinion, please. Thanks Jim

Q: Brookfield Renewable, and all the other utilities, have been dropping fast since the Bank of Canada decided it wanted to raise rates. Is this an area we should now be avoiding, or is the sector overreacting to what is likely a minor rate hike? What % of a somewhat conservative portfolio should be in utilities?

Q: This whole business about how the distribution is paid has got me confused. I bought BEP in my $us investorline account. Even though I bought it with the ticker BEP, it shows up on my transactions as BEP.UN. I phoned BMO investorline to confirm that there would be no currency exchange for the distributions when I purchased the stock. It does not show any conversion in my transaction history but I called today to confirm Again after reading the Q & A comments. I reside in Canada but my broker says the interest is paid in $US and there is no currency exchange. Am I missing something?

Q: I want to add some stocks to my TFSA and would prefer to have companies with good dividends (approx. 4%) and decent capital appreciation prospects for the next 3 to 5 years. Would you have any names that fit these criteria? Thanks

Q: I currently hold a full position of BPY in a taxable account.
An overweight position of BIP and a half position of BEP in
a non taxable account. The three comprise sixteen percent
of my total portfolio. I have sizable gains in both BPY and BIP.

Too many eggs in Brookfield companies? What would you
suggest as a reasonable percentage and how would you rank
the companies as to quality?

Thank you for considering my question(s)
Gail

Q: With the recent $550mm equity offering, the shares have moved from $44 to $41.

Do you feel that BEP.un at $41 offers good value to new investors in this current market environment?

Thank you.

Q: 5i gives BEP.UN a favorable rating. But Accountability Research (AR), in a report on 12 January 2017, rated it as a SELL with a target of only $33. The AR report suggests the possibilities of conflicts of interest with BAM and fears about the high payout rate. Have you considered your rate in light of AR concerns? A detailed reply would be appreciated since I own BEP.UN and planned to purchase more.

Q: There's no "double exchange" of currency on the distributions. From the BEP website:

Distribution Currency Option

The quarterly distributions payable on the Partnership’s LP Units are declared in U.S. dollars. Beginning with the fourth quarter distribution payable December 31, 2016, unitholders resident in the United States will receive payment in U.S. dollars and unitholders resident in Canada will receive the Canadian dollar equivalent unless they request otherwise. The Canadian dollar equivalent of the quarterly distribution will be based on the Bank of Canada daily average exchange rate on the record date or, if the record date falls on a weekend or holiday, on the Bank of Canada daily average exchange rate of the preceding business day.

Registered unitholders resident in Canada who wish to receive a U.S. dollar distribution and registered unitholders resident in the United States wishing to receive the Canadian dollar distribution equivalent should contact Brookfield Renewable’s transfer agent, Computershare Trust Company of Canada, in writing at 100 University Avenue, 8th Floor, Toronto, Ontario M5J 2Y1 or by phone at 1-800-564-6253. Beneficial unitholders (i.e., those holding their units in street name with their brokerage) should contact the broker with whom their units are held.

Q: Hi Your answer to me re the div on this stock was wrong the div paid to Canadian investors is converted into C$ that is a fact if you wish to hold them in the us side of your account they are converted back to US $ thus the double conversion
Stan

Q: Hi Peter &Ryan
I wished to take a position in this stock on the US side of my cash account due to the div being in US $ I was told by my trading house that although the div is in US$ it must be paid in C$ which would mean a double exchange this is in my opion absurd .
Could you explain the rational for this that Brookfield is using .
Which should be a good stock for a US div is not good due to the double exchange.
Kind Regards
Stan

Q: Thoughts on the company post bought deal?

Q: I am interested in investing in dividend growers that 5-6 years from now would be yielding in the 4 to 5% range. At that time I would change from DRIP to cash payments. Therefore I would accept a lower yield now but would grow to that range. What would you suggest?

Thank you

Paul

Q: What is a good alternative to BEP.UN? Due to the late reporting of tax information from BEP I have chosen to sell my units as I just received two $100 penalties from CRA.

Q: At the beginning of the year I had to liquidate 30% of a taxable portfolio. I managed to sell stocks that minimized my income taxes, however, as a result I sold all of my Financials, Materials, Utilities and Energy stocks. I now have 10% to add back and will be contributing another 20% sometime later this year. I do not think I will be needing these funds anytime in the next 5+ years. I am looking at taking half positions in PKI; GSY; BEP.UN and AEM. Your comments about my stock selections would be appreciated.

Q: I have stayed away from LP stocks due to worries about tax issues. Do you have any general comments on LP stocks? for example, If one holds BEP.UN on the TSX, should one purchase it in a registered or non registered account? Are there tax concerns....or is that only a problem if one purchases on the US stock exchange?

Thank you so much for your comments on this issue.